Approaches to manage 'affordability' of high budget impact medicines in key EU countries

Towards sustainability and affordability of expensive cell and gene therapies? Applying a cost-based pricing model to estimate prices for Libmeldy and Zolgensma

BACKGROUND AIMS

Drug prices are regarded as one of the most influential factors in determining accessibility and affordability to novel therapies. Cell and gene therapies such as OTL-200 (brand name: Libmeldy) and AVXS-101 (brand name: Zolgensma) with (expected) list prices of 3.0 million EUR and 1.9 million EUR per treatment, respectively, spark a global debate on the affordability of such therapies. The aim of this study was to use a recently published cost-based pricing model to calculate prices for cell and gene therapies, with OTL-200 and AVXS-101 as case study examples.

METHODS

Using the pricing model proposed by Uyl-de Groot and Löwenberg, we estimated a price for both therapies. We searched the literature and online public sources to estimate (i) research and development (R&D) expenses adjusted for risk of failure and cost of capital, (ii) the eligible patient population and (iii) costs of drug manufacturing to calculate a base-case price for OTL-200 and AVXS-101. All model input parameters were varied in a stepwise, deterministic sensitivity analysis and scenario analyses to assess their impact on the calculated prices.

RESULTS

Prices for OTL-200 and AVXS-101 were estimated at 1 048 138 EUR and 380 444 EUR per treatment, respectively. In deterministic sensitivity analyses, varying R&D estimates had the greatest impact on the price for OTL-200, whereas for AVXS-101, changes in the profit margin changed the calculated price substantially. Highest prices in scenario analyses were achieved when assuming the lowest number of patients for OTL-200 and highest R&D expenses for AVXS-101. The lowest R&D expenses scenario resulted in lowest prices for either therapy.

CONCLUSIONS

Our results show that, using the proposed model, prices for both OTL-200 and AVXS-101 lie substantially below the currently (proposed) list prices for both therapies. Nevertheless, the uncertainty of the used model input parameters is considerable, which translates in a wide range of estimated prices. This is mainly because of a lack of transparency from pharmaceutical companies regarding R&D expenses and the costs of drug manufacturing. Simultaneously, the disease indications for both therapies remain heavily understudied in terms of their epidemiological profile. Despite the considerable variation in the estimated prices, our results may support the public debate on value-based and cost-based pricing models, and on "fair" drug prices in general.

[Concepts and application of cost-benefit evaluation in an international overview]

Due to market access of high-priced new drugs, the financial burden on the health care system and the appropriateness of drug prices are often doubted. Is it time for a broader perspective of health technology assessment in Germany, which has so far focused on clinical value? Should cost and benefit aspects of new technologies be given equal weight in future assessments of market access for new technologies? The experiences of European neighbors and the Standing Committee on Vaccination with cost-benefit analyses are encouraging. Introducing cost-benefit analyses as a further decision criterion in the pricing of new technologies naturally creates additional work for the players involved but also offers the opportunity to provide transparent and understandable answers to the question of what a health improvement is worth. In view of the increasing funding challenges facing the statutory health insurance system in Germany, this question will continue to gain importance.

Pricing strategies, executive committee power and negotiation leverage in New Zealand's containment of public spending on pharmaceuticals

This paper explores policy mechanisms behind New Zealand's remarkable track record of cost containment in public pharmaceutical spending, contrasting with most other advanced economies. We drew on a review of official policy documents and 28 semi-structured expert interviews. We found that decision making in pricing and reimbursement policy was dominated by a small group of managers at the Pharmaceutical Management Agency (PHARMAC), the country's drug reimbursement and Health Technology Assessment Agency, who negotiated pharmaceutical prices on behalf of the public payer. In formal negotiation over patented pharmaceutical prices these managers applied an array of pricing strategies, most notably, 'bundling' consisting of discounted package deals for multiple pharmaceuticals, and 'play-off tenders', whereby two or more pharmaceutical companies bid for exclusive contracts. The key pricing strategy for generic drugs, in contrast, was 'blind-tenders' taking the form of an annual bidding process for supply contracts. An additional contextual condition on bargaining over pharmaceutical prices was an indirect strategy that involved the cultivation of the PHARMAC's 'negotiation leverage'. We derived two cost containment mechanisms consisting in the relationship between pricing strategy options and various reimbursement actors. Our findings shed light on aspects of the institutional design of drug reimbursement that may promote the effective use of competitive negotiations of pharmaceutical prices, including specific pricing strategies, by specialist public payer institutions. On this basis, we formulate recommendations for countries seeking to develop or reform policy frameworks to better meet the budgetary challenge posed by pharmaceutical expenditure.

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.

Adoption of new therapies in the treatment of Hepatitis: a verification of the accuracy of budget impact analysis to guide investment decisions

OBJECTIVES

While there are good Budget Impact Analysis (BIA) guidelines, studies still register potential bias. To do this, we compared the results between theoretical and real-world evidence (RWE) expenditures for medicines for Hepatitis C: boceprevir (BOC) and telaprevir (TVR). While both are not currently recommended in treatment guidelines following recent developments, this is an emblematic case because for 4 years these medicines consumed considerable resources.

METHODS

Theoretical results and RWE expenditures were compared regarding the incorporation of BOC and TVR in 2013-2014 into the Brazilian Public Health System. Theoretical values were extracted from Commission for Technology Incorporation Report and RWE expenditures were extracted from the administrative data records using deterministic-probabilistic linkage.

RESULTS

The estimated number of patients treated (BOC+TVR) was 13,012 versus 7,641 (real). The estimated purchase price for BOC was US$6.20 versus US$11.07 (real) and for TVR was US$42.21 versus US$84.09 (average/real). The estimated budget impact was US$285.16 million versus US$128.58 million (real).

CONCLUSION

This study demonstrates appreciable divergence (US$156.58 million) between the theoretical budget impact and RWE expenditures due to underestimated purchase prices and overestimated populations. The greater the degree of accuracy the more reliable and usable BIAs become for decision-making.

The ethics of aggregation in cost-effectiveness analysis or, "on books, bookshelves, and budget impact"

In deciding how to allocate resources, healthcare priority-setters are increasingly paying attention to an intervention's budget impact alongside its cost-effectiveness. Some argue that approaches that use budget impact as a substantive consideration unfairly disadvantage individuals who belong to large patient groups. Others reject such claims of "numerical discrimination" on the grounds that consideration of the full budget impact of an intervention's adoption is necessary to properly estimate opportunity cost. This paper summarizes this debate and advances a new argument against modifying the cost-effectiveness threshold used for decision-making based on a technology's anticipated budget impact. In making this argument, the paper sets out how the apparent link between budget impact and opportunity cost is largely broken if the effects of a technology's adoption are disaggregated, while highlighting that the theoretical aggregation of effects during cost-effectiveness analysis likely only poorly reflects the operation of the health system in practice. As such, it identifies a need for healthcare priority-setters to be cognizant of the ethical implications associated with aggregating the effects of a technology's adoption for the purpose of decision-making. Throughout the paper, these arguments are illustrated with reference to a "bookshelf" analogy borrowed from previous work.

Assessing the Accuracy of Sales Forecasts Submitted by Pharmaceutical Companies Applying for Reimbursement in Austria

Objectives: Reimbursement decisions on new medicines require an assessment of their value. In Austria, when applying for reimbursement of new medicines, pharmaceutical companies are also obliged to submit forecasts of future sales. We systematically examined the accuracy of these pharmaceutical sales forecasts and hence the usefulness of these forecasts for reimbursement evaluations. Methods: We retrospectively analyzed reimbursement applications of 102 new drugs submitted between 2005 and 2014, which were accepted for reimbursement outside of hospitals, and for which actual reimbursed sales were available for at least 3 years. The main outcome variable was the accuracy ratio, defined as the ratio of forecasted sales submitted by pharmaceutical companies when applying for reimbursement to actual sales from reimbursement data. Results: The median accuracy ratio [95% confidence interval] was 1.33 [1.03; 1.74, range 0.15–37.5], corresponding to a median overestimation of actual sales by 33%. Forecasts of actual sales for 55.9% of all examined products either overestimated actual sales by more than 100% or underestimated them by more than 50%. The accuracy of sales forecasts did not show systematic change over the analyzed decade nor was it discernibly influenced by reimbursement status (restricted or unrestricted), the degree of therapeutic benefit, or the therapeutic area of the pharmaceutical product. Sales forecasts of drugs with a higher degree of innovation and those within a dynamic market tended to be slightly more accurate. Conclusions: The majority of sales forecasts provided by applicants for reimbursement evaluations in Austria were highly inaccurate and were on average too optimistic. This is in line with published results for other jurisdictions and highlights the need for caution when using such forecasts for reimbursement procedures.

HTA Reshaping: Rethinking the Health Technology Assessment Framework in Portugal

<b><i>Introduction:</i></b> Health technology assessment (HTA) aims to provide decision makers with relevant data to make informed choices. Recent changes in the Portuguese HTA framework have altered substantially the assessment methodology with regard to economic evaluation, with potential impacts on access and process efficiency. The HTA Reshaping Project had as its main objective informing the debate on HTA in Portugal, thereby identifying improvement opportunities and solutions to the HTA framework that address future challenges. <b><i>Methods:</i></b> The project comprised several phases, i.e., (1) mapping and evaluation of different HTA frameworks across Europe, identifying best practices and key variables to consider in future frameworks; (2) conduction of in-depth interviews with relevant stakeholders (<i>n</i> = 11); and (3) development of 2 workshops – one with young professionals (<i>n</i> = 12) and another with relevant HTA stakeholders (<i>n</i> = 19) – to consolidate and further explore vital elements of HTA, aimed at brainstorming ideas and developing solutions to improve some of the most critical points, with a view to addressing future challenges. <b><i>Results:</i></b> The comparison of HTA frameworks showed that their purpose and sophistication vary across European countries. For example, the need for economic evidence is not unanimous, and reimbursement agreements vary considerably. Among the stakeholders interviewed there was a high level of agreement on priorities that should be addressed, e.g., expanding and creating national level registries and assuring patient participation throughout the HTA process. The possibility of using managed entry agreements to enhance patients’ access, applying multi-indication pricing for medicines with different therapeutic values per indication, and improvement of registry/system interoperability gathered a moderate level of agreement. <b><i>Conclusions:</i></b> The Portuguese HTA framework might be further adapted to upcoming challenges and should evolve to improve access to innovative therapies. There is still a long path towards the convergence of HTA frameworks in EU member states.

A novel method for predicting the budget impact of innovative medicines: validation study for oncolytics

BACKGROUND

High budget impact (BI) estimates of new drugs have led to decision-making challenges potentially resulting in restrictions in patient access. However, current BI predictions are rather inaccurate and short term. We therefore developed a new approach for BI prediction. Here, we describe the validation of our BI prediction approach using oncology drugs as a case study.

METHODS

We used Dutch population-level data to estimate BI where BI is defined as list price multiplied by volume. We included drugs in the antineoplastic agents ATC category which the European Medicines Agency (EMA) considered a New Active Substance and received EMA marketing authorization (MA) between 2000 and 2017. A mixed-effects model was used for prediction and included tumor site, orphan, first in class or conditional approval designation as covariates. Data from 2000 to 2012 were the training set. BI was predicted monthly from 0 to 45 months after MA. Cross-validation was performed using a rolling forecasting origin with e^|Ln(observed BI/predicted BI)| as outcome.

RESULTS

The training set and validation set included 25 and 44 products, respectively. Mean error, composed of all validation outcomes, was 2.94 (median 1.57). Errors are higher with less available data and at more future predictions. Highest errors occur without any prior data. From 10 months onward, error remains constant.

CONCLUSIONS

The validation shows that the method can relatively accurately predict BI. For payers or policymakers, this approach can yield a valuable addition to current BI predictions due to its ease of use, independence of indications and ability to update predictions to the most recent data.

Sacubitril/valsartan (Entresto) utilisation and prescribing patterns in the context of a reimbursement application system

AIMS

Entresto (sacubitril/valsartan) is used to treat symptomatic chronic heart failure with reduced ejection fraction. Given its high potential budget impact, the Health Services Executive introduced a reimbursement application system (RAS) to ensure its appropriate use. The aim of this study was to evaluate the utilisation of Entresto in Ireland and compare patient characteristics to those of the pivotal PARADIGM-HF trial.

METHODS

We used dispensed claims data from the Primary Care Reimbursement Services, clinical data obtained from the RAS, and data from published studies of Entresto utilisation. Differences in the baseline characteristics in the study populations vs the Entresto arm of the PARADIGM-HF trial were analysed. We also investigated cardiovascular medication use in the 6 months pre- and post-Entresto initiation.

RESULTS

In 2018, there were 1043 individuals receiving Entresto, corresponding to an expenditure of €1.2 million. Patients prescribed Entresto in Ireland were older, had lower left ventricular ejection fraction and were more symptomatic than those in the PARADIGM-HF trial. Irish patient characteristics were reflective of Entresto-treated populations in other real-world studies. More than 63% of patients were commenced on the lowest Entresto dose. Entresto initiation was associated with a reduction in the use of other medications for heart failure.

CONCLUSION

The utilisation of Entresto has been steadily increasing in Ireland since its reimbursement approval. The expenditure in the first year was substantially lower than predicted, and the RAS is an example of how health technology management can facilitate appropriate and cost-effective use of medicines.

Affordability of oncology drugs: accuracy of budget impact estimations

Background: In many countries, Budget Impact (BI) informs reimbursement decisions. Evidence has shown that decision-makers have restricted access based on high BI estimates but studies show that BI estimates are often inaccurate. Objective: To assess the accuracy of BI estimations used for informing access decisions on oncology drugs in the Netherlands. Study Design: Oncology products for which European Medicines Agency Marketing Authorisation was granted between 1-1-2000 and 1-10-2017 were selected. Observed BI data were provided by FarmInform. BI estimates were extracted from the reimbursement dossiers of the Dutch Healthcare Institute. Products without an estimated BI in the reimbursement dossier were excluded. Accuracy is defined as the ratio observed BI/estimated BI. Setting: General community, the Netherlands. Results: Ten products were included in the base case analysis. Mean accuracy was 0.64 and observed BI deviated by more than 40% and 100% from the estimated BI for 4 and 5 products, respectively. For all products together, €141 million BI was estimated and €82 million BI was observed, a €59 million difference. Conclusions: The findings indicate that BI estimates for oncology drugs in the Netherlands are inaccurate. The role and use of BI in reimbursement decisions for these potentially life-saving drugs should therefore be considered carefully, as well as BI estimation methodology.

Accuracy of budget impact estimations and impact on patient access: a hepatitis C case study

BACKGROUND

High budget impact (BI) estimates of new drugs limit access to patients due to concerns regarding affordability and displacement effects. The accuracy and methodological quality of BI analyses are often low, potentially mis-informing reimbursement decision making. Using hepatitis C as a case study, we aim to quantify the accuracy of the BI predictions used in Dutch reimbursement decision-making and to characterize the influence of market-dynamics on actual BI.

METHODS

We selected hepatitis C direct-acting antivirals (DAAs) that were introduced in the Netherlands between January 2014 and March 2018. Dutch National Health Care Institute (ZIN) BI estimates were derived from the reimbursement dossiers. Actual Dutch BI data were provided by FarmInform. BI prediction accuracy was assessed by comparing the ZIN BI estimates with the actual BI data.

RESULTS

Actual BI, from 1 Jan 2014 to 1 March 2018, was €248 million whilst the BI estimates ranged from €388-€510 million. The latter figure represents the estimated BI for the reimbursement scenario that was adopted, implying a €275 million overestimation. Absent incorporation of timing of regulatory decisions and inadequate correction for the introduction of new products were main drivers of BI overestimation, as well as uncertainty regarding the patient population size and the impact of the final reimbursement decision.

DISCUSSION

BI in reimbursement dossiers largely overestimated actual BI of hepatitis C DAAs. When BI analysis is performed according to existing guidelines, the resulting more accurate BI estimates may lead to better informed reimbursement decisions.

Gene Therapy

Gene therapy medicinal products (GTMPs) are one of the most promising biopharmaceuticals, which are beginning to show encouraging results. The broad clinical research activity has been addressed mainly to cancer, primarily to those cancers that do not respond well to conventional treatment. GTMPs to treat rare disorders caused by single-gene mutations have also made important advancements toward market availability, with eye and hematopoietic system diseases as the main applications.Nucleic acid-marketed products are based on both in vivo and ex vivo strategies. Apart from DNA-based therapies, antisense oligonucleotides, small interfering RNA, and, recently, T-cell-based therapies have been also marketed. Moreover, the gene-editing tool CRISPR is boosting the development of new gene therapy-based medicines, and it is expected to have a substantial impact on the gene therapy biopharmaceutical market in the near future.However, despite the important advancements of gene therapy, many challenges have still to be overcome, which are discussed in this book chapter. Issues such as efficacy and safety of the gene delivery systems and manufacturing capacity of biotechnological companies to produce viral vectors are usually considered, but problems related to cost and patient affordability must be also faced to ensure the success of this emerging therapy. Graphical Abstract.

Impacto orçamentário da incorporação de medicamentos para tratamento em segunda linha do edema macular diabético no SUS sob a perspectiva da Secretaria de Estado de Saúde de Minas Gerais, Brasil

Resumo: Os objetivos foram efetuar a análise do impacto orçamentário para a incorporação de segunda linha terapêutica com terapia antiangiogênica de aplicação intravítrea, para tratamento de edema macular diabético, no âmbito do Sistema Único de Saúde (SUS) em Minas Gerais, Brasil, discutindo sua viabilidade à luz do orçamento do estado. A análise do impacto orçamentário com método determinístico, segundo diretriz do Ministério da Saúde. Foram incluídos os pacientes com provável falha ao tratamento de primeira linha, num horizonte temporal de 5 anos para todas as tecnologias avaliadas. Incluíram-se na análise os medicamentos bevacizumabe (uso off-label), ranibizumabe e aflibercepte. As populações foram calculadas tanto por demanda aferida quanto por estimativa epidemiológica. Como análises de sensibilidade efetuaram-se: cenário com difusão de tecnologia mais lenta; cenário com a entrada de bevacizumabe e ranibizumabe biossimilares no mercado; cenário com a desconsideração da inflação no período. O impacto orçamentário incremental, de acordo com as estimativas de demanda aferida e epidemiológica, respectivamente, foi de R$ 69.493.906,95-R$ 473.226.278,78 para bevacizumabe; R$ 349.319.965,60-R$ 2.378.732.103,09 para ranibizumabe e R$543.867.485,47-R$ 3.703.524.490,16 para aflibercepte. Bevacizumabe foi a alternativa financeiramente mais viável em todos os cenários das estimativas e análises de sensibilidade. Estimou-se incremento próximo a 3%, comparando com o orçamento de 2016 (demanda aferida). Avalia-se que a incorporação é viável dentro do SUS em Minas Gerais, mas sujeita às prioridades da gestão. A discrepância de preços entre produtos de eficácia semelhante é intrigante e tema fértil para estudos futuros.