Paying for Cures: Perspectives on Solutions to the "Affordability Issue"

Coverage with evidence development for medical devices in Europe: Can practice meet theory?

Health economists have written extensively on the design and implementation of coverage with evidence development (CED) schemes and have proposed theoretical frameworks based on cost-effectiveness modeling and value of information analysis. CED may aid decision-makers when there is uncertainty about the (cost-)effectiveness of a new health technology at the time of reimbursement. Medical devices are potential candidates for CED schemes, as regulatory regimes do not usually require the same level of efficacy and safety data normally needed for pharmaceuticals. The purpose of this research is to assess whether the actual practice of CED for medical devices in Europe meets the theoretical principles proposed by health economists and whether theory and practice can be more closely aligned. Based on decision-makers' perceptions of the challenges associated with CED schemes, plus examples from the schemes themselves, we discuss a series of proposals for assessing the desirability of schemes, their design, implementation, and evaluation. These proposals, while reflecting the practical challenges with developing CED programs, embody many of the principles suggested by economists and should support decision-makers in dealing with uncertainty about the real-world performance of devices.

Critical Reflections on Reimbursement and Access of Advanced Therapies

Background: The health economic literature has questioned the cost-effectiveness and affordability of advanced therapies, proposed adjustments to value assessment frameworks, and discussed the use of outcome-based managed entry agreements and staggered payments in the last few years. The aim of this manuscript is to conduct a critical reflection on assessment criteria and access conditions for reimbursement of advanced therapies.

Methods: A narrative review of the peer-reviewed literature and grey literature was conducted in April 2021 by searching PubMed; Google Scholar; policy and legislative documents; websites of health technology assessment agencies, advanced therapy organisations, governmental advanced therapy innovation programmes, consultancy agencies; ISPOR conference abstracts and presentations.

Results: Based on the available evidence, this manuscript argues that: a) advanced therapies can be cost-effective at high prices set by manufacturers; b) the economic evaluation framework adopted by many payers under-values these products; c) advanced therapies can be affordable and may not require spread payments; d) outcome-based managed entry agreements are theoretically attractive, but challenging in practice; e) the cost-effectiveness of advanced therapies depends on the outcome-based managed entry agreement and payment approach; f) there is a role for multinational collaborations to manage reimbursement and access of advanced therapies.

Conclusions: This manuscript shows that there is no single approach to reimbursement and access of advanced therapies. Instead, we support a more tailored assessment of health economic aspects of advanced therapies, which considers the heterogeneity of these products and their target populations.

Challenges in the market access of regenerative medicines, and implications for manufacturers and decision-makers: a systematic review

Aim: Regenerative medicines (RMs) are expected to transform the treatment paradigm of rare, life-threatening diseases, while substantial challenges impede its market access. This study aimed to present these challenges. Materials & methods: Publications identified in the Medline and Embase databases until December 2020 were included. Results: Uncertainties around the relative effectiveness and long-term benefits of RMs are most scrutinized. A new reference case for RMs is questionable, but examining impacts of study perspective, time horizon, discount rate and extrapolation methods on estimates is advised. Establishing reasonable prices of RMs requires increased transparency in the development costs and better values measurements. Outcome-based payments require considerable investments and potential legislative adjustments. Conclusion: Greater flexibility for health technology assessment and economic analyses of RMs is necessary. This comprehensive review may prompt more multi-stakeholder conversations to discuss the optimized strategy for value assessment, pricing and payment in order to accelerate the market access of RMs.

Amortization of gene replacement therapies: A health policy analysis exploring a mechanism for mitigating budget impact of high-cost treatments

With gene replacement therapies (GRTs) increasingly and rapidly reaching the healthcare marketplace, the vast potential for improving patient health is matched by the potential budgetary impact for healthcare payers. GRTs are highly valuable given their potential life-extending or even curative benefits and may provide significant cost-offsets compared with standard of care. Current healthcare systems are, however, struggling to fund such valuable but costly therapies. Some payers have already implemented specific financing models to account for the new treatment paradigms, but these do not address the budget impact in the year of acquisition or administration of these costly technologies. This health policy analysis aimed to assess the rationale and feasibility of amortization, within the context of financing healthcare technologies, and specifically GRTs. Amortization is an accounting concept applied to intangible assets that allows for spreading the cost an intangible asset over time, allowing for repayment to occur via interest and principal payments sufficient to repay the intangible asset in full by its maturity. Our systematic scoping review on the amortization of healthcare technologies found a very small literature base with even that being unclear and inconsistent in its understanding of the issues. Where amortization was proposed as a solution for funding costly, but highly valuable GRTs, the concept was not fully investigated in detail, nor was the feasibility of the approach fully challenged. However, by providing clear definitions of relevant concepts along with an example of amortization models applied to some example GRTs, we propose that amortization can offer a promising method for funding of extraordinarily high-value healthcare technologies, thereby increasing market and patient access for these technologies. Nonetheless, healthcare accounting principles and financing guidelines must evolve to apply amortization to the rapidly developing GRTs.

Coverage with evidence development schemes for medical devices in Europe: characteristics and challenges

OBJECTIVES

Medical devices are potentially good candidates for coverage with evidence development (CED) schemes, as clinical data at market entry are often sparse and (cost-)effectiveness depends on real-world use. The objective of this research was to explore the diffusion of CED schemes for devices in Europe, and the factors that favour or hamper their utilization.

METHODS

We conducted structured interviews with 25 decision-makers from 22 European countries to explore the characteristics of existing CED programmes for devices, and how decision makers perceived 13 pre-identified challenges associated with initiating and operating CED schemes for devices. We also collected data on individual schemes that were either initiated or still ongoing in the last 5 years.

RESULTS

We identified seven countries with CED programmes for devices and 78 ongoing schemes. The characteristics of CED programmes varied across countries, including eligibility criteria, roles and responsibilities of stakeholders, funding arrangements, and type of decisions being contemplated at the outset of each scheme. We observed a high variability in how decision makers perceived CED-related challenges possibly reflecting country-specific arrangements and different experiences with CED. One general finding across all countries was that relatively little attention was paid to the evaluation of schemes, both during and at their completion.

CONCLUSIONS

CED programmes for devices with different characteristics exist in Europe. Decision-makers' perceptions differ on the challenges associated with these schemes. More exchange of knowledge and experience will help decision makers anticipate the likely challenges in CED schemes for devices, and to learn from good practices existing elsewhere.

Stakeholder point of view on prescription drug affordability - a systematic literature review and content analysis

OBJECTIVES

The objectives of this research were to: 1) understand perspectives on affordability of pharmaceutical drugs from the point of view of stakeholders as reported in published peer-reviewed journals and conferences; 2) evaluate if (and how) perspectives on affordability overlapped across stakeholders.

METHODS

The systematic literature review followed Cochrane and PRISMA guidelines. Content analysis with iterative and systematic coding of text was conducted, to identify themes.

RESULTS

A total of 7,372 unique citations were eligible, and 126 articles included for final synthesis. For patients, 6 core themes emerged: financial barriers, adherence, access, patient-provider communication, financial distress, and factors that impact affordability. For payers, 5 core themes: financing schemes, cost-effectiveness, budget impact, private vs. public preferences, and ethics. For providers, 3 themes: patient-provider communication, physician prescribing behavior, and finding alternatives to support patient access. For policymakers, 2 themes: measuring affordability and the role of government. Limited articles representing the manufacturer perspective were identified. Perspectives of decision makers (payers, policymakers) did not overlap with those affected by affordability (patients, providers).

CONCLUSIONS

This research highlights the multi-dimensionality of drug "affordability." Multiple factors beyond cost influence patient affordability implying interventions can help alleviate affordability issues for some patients. The lack of overlap highlights potential hazards that decisions related to out-of-pocket spending, insurance coverage, reimbursement, and rationing occur without explicitly considering patient and provider perspectives.

Barriers and Opportunities for Implementation of Outcome-Based Spread Payments for High-Cost, One-Shot Curative Therapies

Background: The challenging market access of high-cost one-time curative therapies has inspired the development of alternative reimbursement structures, such as outcome-based spread payments, to mitigate their unaffordability and answer remaining uncertainties. This study aimed to provide a broad overview of barriers and possible opportunities for the practical implementation of outcome-based spread payments for the reimbursement of one-shot therapies in European healthcare systems. Methods: A systematic literature review was performed investigating published literature and publicly available documents to identify barriers and implementation opportunities for both spreading payments and for implementing outcome-based agreements. Data was analyzed via qualitative content analysis by extracting data with a reporting template. Results: A total of 1,503 publications were screened and 174 were included. Main identified barriers for the implementation of spread payments are reaching an agreement on financial terms while considering 12-months budget cycles and the possible violation of corresponding international accounting rules. Furthermore, outcome correction of payments is currently hindered by the need for additional data collection, the lack of clear governance structures and the resulting administrative burden and cost. The use of spread payments adjusted by population- or individual-level data collected within automated registries and overseen by a governance committee and external advisory board may alleviate several barriers and may support the reimbursement of highly innovative therapies. Conclusion: High-cost advanced therapy medicinal products pose a substantial affordability challenge on healthcare systems worldwide. Outcome-based spread payments may mitigate the initial budget impact and alleviate existing uncertainties; however, their effective implementation still faces several barriers and will be facilitated by realizing the required organizational changes.

Recalibrating Health Technology Assessment Methods for Cell and Gene Therapies

Recently licensed cell and gene therapies have promising but highly uncertain clinical benefits. They are entering the market at very high prices, with the latest entrants costing hundreds of thousands of dollars. The significant long-term uncertainty posed by these therapies has already complicated the use of conventional economic evaluation approaches such as cost-effectiveness and cost-utility analyses, which are widely used for assessing the value of new health interventions. Cell and gene therapies also risk jeopardising healthcare systems' financial sustainability. As a result, there is a need to recalibrate the current health technology assessment methods used to measure and compensate their value. In this paper, we outline a set of technical adaptations and methodological refinements to address key challenges in the appraisal of cell and gene therapies' value, including the assessment of efficiency and affordability. We also discuss the potential role of alternative financing mechanisms. Ultimately, uncertainties associated with cell and gene therapies can only be meaningfully addressed by improving the evidence base supporting their approval and adoption in healthcare systems.

Application of Managed Entry Agreements for Innovative Therapies in Different Settings and Combinations: A Feasibility Analysis

The reimbursement of expensive, innovative therapies poses a challenge to healthcare systems. This study investigated the feasibility of managed entry agreements (MEAs) for innovative therapies in different settings and combinations. First, a systematic literature review included studies describing used or conceptual agreements between payers and manufacturers (i.e., MEAs). Identical and similar MEAs were clustered and data were extracted on their benefits and limitations. A feasibility assessment was performed for each individual MEA based on how it could be applied (financial/outcome-based), on what level (individual patients/target population), in which payment setting (centralized pricing and reimbursement authority yes/no), for what type of therapies (one-time/chronic), within what payment structures, and whether combinations with other MEAs were feasible. The literature search ultimately included 82 papers describing 117 MEAs. After clustering, 15 unique MEAs remained, each describing one or multiple similar agreements. Four of those entailed payment structures, while eleven entailed agreements between payers and manufacturers regarding price, usage, and/or evidence generation. The feasibility assessment indicated that most agreements could be applied throughout the different settings that were assessed and could be applied in different payment structures and in combination with multiple other agreements. The potential to combine multiple agreements leads to a multitude of different reimbursement mechanisms that may manage the price, usage, payment structure, and additional conditions for an innovative therapy. This overview of the feasibility of combinations of MEAs can help decision-makers construct a reimbursement mechanism most suited to their preferences, the type of therapy under evaluation, and the applicable healthcare system.

The Potential Benefits of Deferred Payment for a Hypothetical Gene Therapy for Congestive Heart Failure: A Cost-Consequence Analysis

BACKGROUND

The emergence of potentially curative pharmacologic treatments that deliver long-term clinical benefits with a limited number of doses may create short-term budget challenges for payers as their unit price can be high.

OBJECTIVE

This paper tests the clinical and financial properties of a deferred payment model (DPM) in hypothetical therapy for congestive heart failure (CHF) from the perspective of payers, manufacturers, and patients.

METHODS

We present an empirical analysis of longitudinal data for cardiovascular admissions and mortality using a Markov transition model for patient progression under different payment scenarios. The model calculates life-years gained and avoided cardiovascular admissions under the status quo and deferred payment and a hypothetical budget constraint. We tracked over 91,000 Medicare fee-for-service beneficiaries over a period of 5 years (2009-2014) using MedPAR 5% data files.

RESULTS

We find that a DPM is associated with earlier treatment and a consequent improvement in clinical outcomes. A 25% down-payment is associated with the highest relative improvement and reduces hospital admissions by 0.52% (by 2611 vs. 2071 cases) and mortality by 0.29% (by 799 vs. 648 cases), both relative to the status quo payment. Deferred payment results in limited financial gains for payers or manufacturers, primarily because of the small share of expected cost savings on the total cost of therapy. Our results are robust to changes in relative risk for cardiovascular admissions and a change in the cost of therapy.

CONCLUSIONS

A DPM may result in faster access to CHF gene therapy and may thus reduce hospital admissions and mortality in contrast to a status quo payment with the same budget constraint. Although the financial benefits of a DPM in CHF gene therapy are limited, it is possible that deferred payments will show greater promise for treatments with higher cost offsets.

The CECMED Office of Innovation: A Core Initiative to Bolster Novel Pharmaceutical Products-The Cuban Approach

Regulatory agencies across the Latin American region have strengthened their activities through the development of new regulatory science-based tools, standards and other approaches to evaluate and assess the safety, efficacy, quality and performance of therapeutics and devices. These processes have been implemented to promote the development and authorization of innovative new drugs and technologies, which pose a challenge to even well-established regulatory frameworks. Furthermore, in today's environment, the regulatory framework to protect public health can create barriers to marketing entry of novel drugs and medical devices. This article describes the pioneering approach that the Cuban regulatory agency (CECMED) has developed with the aim of building a comprehensive regulatory framework geared to accelerated innovation and enable successful transition of novel products from research and development to clinical practice. The Office of Innovation recently established at CECMED is the first flagship initiative of this type in Latin America and the Caribbean region. Its goal is to serve a leading role as a driving force for national and regional biopharmaceutical innovation. Herein, we discuss the conceptualization and management of the Office from the Latin American regional and national Cuban contexts.

Creeping Through the Backdoor: Disruption in Medicine and Health

Can disruption happen when no one notices? Disruptive technologies and processes are fundamentally starting to up-end how medicines and health systems benefit patients but the question is whether health systems are ready for them. This paper will briefly review the business strategy and management literature on topics such as disruption and “black swan” theories of change, before turning to discuss some of the areas where change is affecting medicine and healthcare. Such areas include the emergence of cell and gene therapies, the economics of cures, digital technologies, mobile apps, social media, supply chain technologies such as drones and online distribution, universal health coverage and funding, and consumerisation of healthcare. The question to be asked is whether these sorts of changes are “disruptive” or whether they were coming for a long time and it is just that health systems are slow to change. It could be argued that while perhaps unexpected by day-to-day practitioners in healthcare, in fact, many of the changes now starting to affect the health and medicines sector have been affecting other sectors such as technology, finance and communications for decades.

Are Global Health Systems Ready for Transformative Therapies?

BACKGROUND

We have seen significant advancement in a range of health technologies, some with transformative or curative potential. Nevertheless, it is often unclear how global health systems recognize or reward innovation.

OBJECTIVES

To consider what is transformative, challenges for transformative therapies, and downstream health ecosystem effects.

METHODS

A systematic review of publications in English between 2012 and 2018 was conducted with a focus on value assessment processes and health system effects of a range of breakthrough health technology categories. After screening 9012 records, 222 unique studies were identified. The study also included an analysis of 100 health technology assessments (HTAs) from 5 markets to consider how and in what ways global HTA bodies evaluate transformative therapies. Global sales and technology/procedure utilization data were also evaluated to gain insights into patient access and commercial impact.

RESULTS

This article evaluated uncertainties around evidence of efficacy, safety, and duration of effect, as well as underlying study quality and methodological considerations in the target categories. Although many HTA evaluations had similar approaches to assessing parameters such as safety, there were significant differences across technology categories. Technology-driven trends also surfaced where global HTA and payer systems may not yet be prepared to recognize and reward emerging technology impacts, including use of next-generation diagnostic results to guide care, considering novel impacts on therapy sequencing and clinical pathway management, and changes in payment and health delivery models.

CONCLUSIONS

Some trends stemming from rapid evolution of breakthrough therapies will prompt reconsideration of our conventional value assessment and reward models, because health system measurement and management processes have not fully anticipated their effects.

Uncertainty and Cures: Discontinuation, Irreversibility, and Outcomes-Based Payments: What Is Different About a One-Off Treatment?

Payers are concerned that one-off "cures" bring great uncertainty with the consequential risk of incorrect adoption decisions, and significant budget impact from large one-off payments. Innovators worry about bias against "cures" in favor of repeat treatment, which is not in patients' interests. We find that even in the absence of a difference in uncertainty of outcomes, adverse pay-offs differ. The greater financial risk associated with a cure is related to the issue of treatment discontinuation, driven by irreversibility. This paper uses a stylized example to illustrate the need to separate three different elements of the issue: (i) one-off versus repeat or ongoing treatment, (ii) duration of treatment effect, and (iii) the potential role of financial arrangements or risk sharing to mitigate the financial risk to the payer. It concludes that: (i) prevalence and discontinuation issues mean that the impact on the payer of an incorrect decision is greater with a one-off treatment than a repeat therapy; (ii) with evidence collection this risk diminishes over time (a form of CED or OWR); and (iii) financial arrangements or risk sharing can eliminate differences for the payer as between one-off and repeat therapy. The impact of (iii) also addresses payer concerns about budget impact.

Analytic Considerations in Applying a General Economic Evaluation Reference Case to Gene Therapy

The concept of a reference case, first proposed by the US Panel on Cost-Effectiveness in Health and Medicine, has been used to specify the required methodological features of economic evaluations of healthcare interventions. In the case of gene therapy, there is a difference of opinion on whether a specific methodological reference case is required. The aim of this article was to provide a more detailed analysis of the characteristics of gene therapy and the extent to which these characteristics warrant modifications to the methods suggested in general reference cases for economic evaluation. We argue that a completely new reference case is not required, but propose a tailored checklist that can be used by analysts and decision makers to determine which aspects of economic evaluation should be considered further, given the unique nature of gene therapy.

Clinical and economic outcomes among injection-naïve patients with type 2 diabetes initiating dulaglutide compared with basal insulin in a US real-world setting: the DISPEL Study

AIMS

To report 1-year clinical and economic outcomes from the retrospective DISPEL (Dulaglutide vs Basal InSulin in Injection Naïve Patients with Type 2 Diabetes: Effectiveness in ReaL World) Study.

MATERIALS AND METHODS

This observational claims study included patients with type 2 diabetes (T2D) and ≥1 claim for dulaglutide or basal insulin between November 2014 and April 2017 (index date=earliest fill date). Propensity score matching was used to address treatment selection bias. Change from baseline in hemoglobin A1c (HbA1c) was compared between the matched cohorts using analysis of covariance; diabetes-related costs were analyzed using generalized linear models.

RESULTS

Matched cohorts (903 pairs total; 523 pairs with complete cost data) were balanced in baseline characteristics with mean HbA1c 8.6%, mean age 54 years. At 1 year postindex, dulaglutide patients had significantly greater reduction in HbA1c than basal insulin (-1.12% vs -0.51%, p<0.01), lower medical costs ($3753 vs $7604, p<0.01), higher pharmacy costs ($9809 vs $6175, p<0.01), and similar total costs ($13 562 vs $13 779, p=0.76). Medical and total costs per 1% HbA1c reduction were lower for dulaglutide than basal insulin (medical: $3128 vs $12 673, p<0.01; total: $11 302 vs $22 965, p<0.01), while pharmacy costs per 1% HbA1c reduction were lower without reaching statistical significance ($8174 vs $10 292, p=0.15).

CONCLUSIONS

In this real-world study, patients with T2D initiating dulaglutide demonstrated greater HbA1c reduction compared with those initiating basal insulin. Although total diabetes-related costs were similar, the total diabetes-related costs per HbA1c reduction were lower for dulaglutide, highlighting the importance of evaluating effectiveness along with the economic impact of medications.