Challenges in Reimbursing Orphan Medicinal Products. Evaluating Benefit, Determining a Fair Price and Optimizing Access

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1 Challenges in Reimbursing Orphan Medicinal Products Evaluating Benefit, Determining a Fair Price and Optimizing Access

2 Acknowledgements This presentation reflects the work of colleagues at the Department of Pharmaceutical Affairs, and exchanges with colleagues within the MEDEV Committee, EUnetHTA, the Competent Authorities on Pricing and Reimbursement and other fora. Their creative input is gratefully acknowledged. Disclaimer The opinions expressed here, and any mistakes, are exclusively mine. Anna Bucsics, fmr. Head of Department of Pharmaceutical Affairs, Main Association of Austrian Social Insurance Institutions Currently: Advisor to MEDEV and the MoCA Project (

3 The Subsidiarity Principle in the European Union The principle of subsidiarity is defined in Article 5 of the Treaty on European Union. It aims to ensure that decisions are taken as closely as possible to the citizen. It is the principle whereby the EU does not take action (except in the areas that fall within its exclusive competence), unless it is more effective than action taken at national, regional or local level.

4 Health Care Systems in Europe Organisation Bismarck systems Social health insurance Financing Contributions Taxes Beveridge systems National health service Administration Independent by government Coverage Compulsory insurance Inhabitants Images from Wikipedia

5 The Transparency Directive (Directive 89/105/EEC) Scope: Direct or indirect controls on the price of medicinal products covered by by the national health insurance system. The decision must be timely (i.e. within 90 days, or 180 days if price negotiations are also conducted) Any decision not to include a medicinal product in the list of products covered by the health insurance system shall contain a statement of reasons based upon objective and verifiable criteria The applicant shall be informed of the remedies available to him under the laws in force and the time limits allowed for applying for such remedies

6 Directive 2011/24/EU on the application of patients rights in cross-border healthcare Sets out the conditions under which a patient may travel to another EU country to receive safe and high quality medical care and have the cost reimbursed by their own health insurance scheme. Encourages cooperation between national healthcare systems.. to establish European reference networks between healthcare providers and centres of expertise. The cooperation extends to tackling rare diseases, developing e-health and assessing new health technology. The directive does not affect how EU countries organise and finance their national health systems for their own citizens

7 European Network for Health Technology Assessment a Voluntary Cooperation eunethta.eu Guidelines to help health technology assessors Tools to support joint and collaborative production of assessments 78 organisations from 29 countries. Joint and Collaborative Assessments of Various health technologies, including Rapid Relative Effectiveness Assessment (REA) of Pharmaceuticals eunethta

8 Domains of the Core Model 1. Health Problem and Current Use of the Technology 2. Description and Technical Characteristics of Technology 3. Clinical Effectiveness 4. Safety 5. Costs and Economic Evaluation 6. Ethical Analysis 7. Organisational Aspects 8. Social Aspects 9. Legal Aspects

9 What do we want to know about new medicines? Marketing Authorization Quality Efficacy Safety Evaluation for Reimbursement What are the available alternatives? Is the new drug better? Is the price worth the difference?

10 Challenges Evidence base often more promising than convincing - insufficient to demonstrate cost-effectiveness mostly based on small numbers, surrogate end-points Complexity of new therapies Designing registries which accommodate the needs of regulators, HTA and payers and are workable When is the best time to discuss the value of a product? There is no single payer voice - different health care systems, laws, economies, priorities The only thing payers agree upon is that the price of orphan medicinal products is too high!

11 Prices some numbers In 2014, the annual costs for orphan medicinal products ranged between 726 GBP and GBP, median GBP. When compared with their unbranded or unlicensed versions, the branded orphan medicines were 1.4 to times more expensive. (1) In Latvia, average annual per patient expenditures varied widely, from EUR to EUR (2) (1) Onakpoya IJ, Spencer EA, Thompson MJ, et al. Effectiveness, safety and costs of orphan drugs: an evidence-based review. BMJ Open 2015;5:e doi: /bmjopen (2) Logviss K, Krievins D, Purvina S., Impact of orphan drugs on Latvian budget.. Orphanet J Rare Dis. 2016; 11: 59

12 Do we need to worry? Cumulative prevalence of rare diseases (est) Cost of RD medicines per person per year in euros (assumption) Persons coveredby statutory health insurance in Germany* German expenditures for medicines 2015* Number of patients with rare diseases treated, for costs to equal to the whole pharma budget * 5-6% million 36.9 bn 1.05 million (1.5% of covered persons)

13 What is a Fair Price? Value based what the market will bear? Fair return on investment - including public funds (basic research, RWD collection, etc.) Fair reimbursement For each component of the technology Compared to alternatives Savings for the system should be real, not skimmed-off via high prices Sustainable Equitable Considers uncertainty adaptive pricing Transparent?

14 Access is more than pricing Who will pay? Hospital budgets? Health insurance? Special funds? International cooperation/cross-border issues? For what? Cells, intervention, follow-up? Who will get the money? Company, centers? How much? When? Up front? Over time, based on performance? What will be the role of the European Centers of Expertise?

15 A Mechanism of Coordianted access to Orphan Medicinal Products (MoCA) ( Aims to facilitate coordinated and improved access to OMPs, based on: a voluntary, non-legislative, non-regulatory non-binding collaboration among stakeholders who are willing to work together: Patients (EURORDIS), Payers (MEDEV*) and Industry (other stakeholders welcome) *MEdicines EValuation Committee, an informal group of payer representatives responsible for reimbursement

16 The Transparent Value Framework Criterion Lower Degree Medium Degree High Degree Lack of Alternatives/Unmet Need, including nonpharmaceutical treatment options (Relative) Effectiveness, Degree of Net Benefit (Clinical Improvement, QoL, etc. vs. side effects) relative to alternatives, including no treatment, societal impact, etc. Response Rate (based on best available clinically relevant criteria) yes, new medicine does not address unmet need yes, but major unmet need still remains no alternatives except best supportive care - new drug addresses major unmet need incremental major curative <30% 30-60% >60% Degree of Certainty (Documentation) promising but not welldocumented plausible unequivocal New orphan medicinal products could be assessed according to how well they fulfilled the different criteria at a given point in time. This could be compared with other therapeutic alternatives and be included as one factor in pricing negotiations in Member States

17 Learnings from MoCA Better understanding of which outcomes matter to patients and payers Better understanding of payers needs for decision-making Companies are welcome anytime during the product cyle but the earlier the better Understanding the challenges of complicated products, eg when a disease is so rare and the treatment so complicated that it will be limited to a few selected Centers of Expertise across Europe (role of ERNs)

18 Regional Cooperation BeNeLuxA: Cooperation to meet the challenges of the pharmaceutical sector and simplify exchange of information Intention: Joint horizon scanning Improving price transparency and negotiating prositions Joint price negotiations for selected (high-priced) products Improving access Other initiatives for regional cooperations (Bulgaria/Roumania, Nordic pharmaceutical forum, etc.) also noted. nelux_kooperation_fuer_arzneimittelpolitik_bei data/assets/pdf_file/0003/323598/challenges-opportunitiesimproving-access-medicines-efficient-public-procurement.pdf?ua=1, accessed

19 Thank you very much for your attention!