Benefit Package Design for UHC: The case of Indonesia

Welcome to the webinar Benefit Package Design for UHC: The case of Indonesia organized by Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ

socialprotection.org presents the webinar Benefit Package Design for UHC: The case of Indonesia organized by Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ Presenter: Ioana Ursu, PharmD, former Secretary of State in Romania and Director of Mapping Health Ltd Discussant: Prof. Dr. Hasbullah Thabrany, MPH, DrPH Moderator: Viktoria Rabovskaja, GIZ Global Alliances for Social Protection

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Benefit Package Design for UHC: The case of Indonesia Presenter Ioana Ursu, PharmD, former Secretary of State in Romania and Director of Mapping Health Ltd Ioana Ursu, PharmD, former Secretary of State in Romania and senior health systems consultant with over 10 years of eperience in policy making and advisory services with focus on pharmaceutical policies and benefit package design. In her role as secretary of state, Ioana was in charge of the national pharmaceutical policy and pharmaceutical sector development, from regulatory aspects to health technology assessments (HTA) and reimbursement negotiations. In her etensive consultancy work, Ioana worked on mapping health systems and advising sector stakeholders globally. She has covered 78 countries across Europe, Africa, Asia and Latin America; recent projects involved Philippines, Togo and Indonesia. E-mail i.ursu@mappinghealth.org 2

Benefit Package Design for UHC: The case of Indonesia Discussant Prof. Dr. Hasbullah Thabrany, MPH, DrPH Former chair of the Centre for Health Economics and Policy Studies at the University of Indonesia, Prof. Hasbullah currently supports the Indonesian Social Security Council (DJSN) with the implementation of the national health insurance scheme. His vast work in research and advice to the government and international organisations has focused on population coverage, equity, health care management and health financing, as well as poverty alleviation and social protection. He is a member of the International Health Economic Association, Founder of the Association of Health Insurance Managers of Indonesia (PAMJAKI), Former President of the South East Asia Public Health Education Institutions Network (SEAPHEIN). Prof. Thabrany holds a medical degree from the University of Indonesia, and his MPH and Dr.PH from University of California at Berkeley, USA. E-mail hasbullah.thabrany@gmail.com 2

Benefit Package Design for UHC: The case of Indonesia Moderator Viktoria Rabovskaja, GIZ Global Alliances for Social Protection Viktoria is currently the regional coordinator for Asia within the GIZ Global Alliances for Social Protection Program. Previously she was working as a health financing advisor for GIZ in Indonesia as well as the Providing for Health (P4H) network supporting a variety of health systems projects in Africa and Asia. A health economist (University of York, UK) by background, Viktoria gained analytical eperience at the Department of Essential Medicines and Pharmaceutical Policies at the WHO. Prior to international policy work she was involved in HTA and economic evaluation projects at the Centre for Health Economics Research and Evaluation at the University of Technology in Sydney, Australia. E-mail viktoria.rabovskaja@giz.de 2

Agenda 1. Introduction 2. The analysis framework 3. Indonesia case study a. Review and analysis of Mandatory functions b. Review and analysis of Decision Sequence c. Review and analysis of Information Flow 4. Discussion and Q&A 5. Net steps 7

Background Indonesia Health insurance reform 2004 National Social Security (SJSN) Law No. 40 2014 Single health insurance scheme JKN 2015/2016 GIZ JKN evaluation studies The national health insurance (JKN) was introduced in 2014 Two years after implementation two main aspects were concerning policy makers and implementers: Financial sustainability of the fund High OOP of insured patients Empirical evidence showed, that medicines were the key drivers of OOP for patients Moreover, growing deficit of the insurance carrier showed clear need for better cost containment and ependiture management In a following step, a deeper system assessment was performed to assess the pharmaceutical system, decision making processes and potential solutions 3

In-depth qualitative research across 3 dimensions was conducted in order to identify potential triggers for financial deficiency and high OOP In order to identify the gaps in either governance practices or capacity, we conducted an in-depth qualitative research GIZ Social Protection Program provided support in identification of all potential stakeholders Individual interviews with stakeholders from all institutions and units involved in pharmaceutical decision making Workshop reviewing the results and agreeing on net steps The system was evaluated across 3 dimensions: 1. The presence of all mandatory functions of a pharmaceutical system 2. A continuous and coherent decision sequence across functions 3. Working practices within each function that ensure correct and complete output from each Mandatory functions Decision sequence Information flow Mapping Health Ltd.

Mandatory functions of the pharmaceutical reimbursement system Regulatory function Establish the safety Grants market authorization Supervises manufacturing standards Scientific review Epert review of clinical data (efficacy & safety) Compares new medicine versus current practice Establishes place in therapy Estimates potential number of patients Pharmacoeconomics/ Health Technology Assessment Relates clinical performance to potential price Looks at local affordability, international prices Can use various tools and economic models. Pricing and reimbursement decision Leads price negotiations Decision on reimbursement Politically aware Decisions with most visibility Purchasing and payment Administrative function Relates price to forecasted volume over fied period (e.g. tenders) Issues prescribing rules Reimburses providers, hospitals/pharmacies, in line with rules set Monitoring, control and feedback function Unit(s) monitoring ependiture, drug usage and drug prescribing Provides real-world data on usage, prescribing and disease burden Feeds back data to all previous functions Mapping Health Ltd.

Assuming all functions are present, a well defined and coherent decision sequence is needed PURCHASING AND PROVIDERS REIMBURSEMENT Real world evidence - clinical and economic data on usage and costs of the product Clinical and economic data submitted by manufacturer Mapping Health Ltd.

OUTPUT INPUT Each function uses a specific set of data and tools, with output generated by one function used as input by the net REGULATORY SCIENTIFIC/EXPERT REVIEW PHARMACOECONOMICS PRICING AND REIMBURSEMENT DECISION PURCHASING AND PROVIDERS REIMBURSEMENT MONITORING AND FEEDBACK FUNCTION Epidemiology Clinical data Clinical value (local contet) Clinical value (local contet) Clinical Guidelines Hospital Usage / Costs Clinical trials Local practice Epected Volume of Patients Potential volume Maimum Prices Product Volumes Quality Cost of current practice Budget Impact Forecasted volumes Other costs Package/ case rate impact Clinical value (Local) Cost-effectiveness Real World Burden of Disease Marketing Authorization Epected Volume of Patients Budget Impact Maimum Price Hospital Usage Hospital Usage Clinical data Clinical Guidelines Package/ Case-rate Impact Inclusion in Reimbursement List Product Usage Volumes of Products Mapping Health Ltd.

Information flow should be continuous & cyclical, allowing the system to base decisions on real world data Real world data should be available on: Volumes of medicines used Spread of a diseases Mortality and morbidity Annual costs for the insurance Mapping Health Ltd.

Assessment of the first dimension: mapping the functions and the institutions fulfilling them Indonesia Regulatory Agency BPOM 1 Epert Group FORNAS MoH Pharmacy 2 4 Pharmacoecon Committee MoH Pharmacy 3 Pricing Committee MoH Pharmacy /4 Public sector Procurement Agency 5 Hospitals 6 HTA Group MoH Financing 3 DRG Committee MH Financing /4 National health Insurer BPJS 5 Mapping Health Ltd.

All functions are present; limited pharmacoeconomics and monitoring functions Indonesia Regulatory Agency BPOM 1 Epert Group FORNAS MoH Pharmacy 2 4 Pharmacoecon Committee MoH Pharmacy 3 Pricing Committee MoH Pharmacy /4 Public sector Procurement Agency 5 Hospitals 6 HTA Group MoH Financing 3 DRG Committee MH Financing /4 National health Insurer BPJS 5 a) The Pharmacoecomics function was only recently established, performed by two units b) The pricing and reimbursement function is split: - The reimbursement decision is given to the Scientific Group - The pricing decision is given to the Pricing Committee c) While there is some feedback on volume and cases from hospital claims, there is no active monitoring function Mapping Health Ltd.

The reimbursement decision is taken separately, and prior to the pricing decision PRICING PROCUREMENT REGULATORY Indonesia Regulatory Agency BPOM 1 2 4 SCIENTIFIC REVIEW Epert Group MoH Pharmacy REIMBURSEMENT Pricing Committee MoH Pharmacy 4 PRICING Public sector Procurement Agency 5 PROVIDER REIMBURSEMENT FEEDBACK Hospitals DRG Committee MH Financing National health Insurer BPJS 4 5 The pharmacoeconomics and HTA units are not currently included in the decision sequence 18

Current decision sequence weakens the capacity of the state to balance the benefits with the ability to pay (the budget) PRICING PROCUREMENT REGULATORY Indonesia Regulatory Agency 2 SCIENTIFIC REVIEW Epert Group FORNAS Pricing Committee MoH Pharmacy 4 Public sector Procurement Agency 5 FEEDBACK Hospitals BPOM 1 4 MoH Pharmacy REIMBURSEMENT PRICING PROVIDER REIMBURSEMENT DRG Committee MH Financing National health Insurer BPJS 4 5 By merging the scientific/ clinical review with the reimbursement decision, the Government looses the capacity to negotiate prices based on volume, case-rates, international prices etc. By making the reimbursement decision prior to agreeing on price and volume, the current reimbursement list is just a wish list The drug pricing decision is separate from DRG costing which results in unrealistic reimbursement levels for providers The DRG is supposed to cover both medical services and drugs As result, hospitals demand from patients to procure and pay for medicines out of pocket Mapping Health Ltd.

OUTPUT INPUT Clinical data most readily available; lack real world data compromises most functions REGULATORY Epidemiology Clinical trials Quality SCIENTIFIC/EXPERT REVIEW Clinical data Local practice PHARMACOECONOMICS Clinical value (local) Volume of Patients Cost current practice Other costs PRICING AND REIMBURSEMENT DECISION Clinical value (local contet) Potential volume Budget Impact COGS, other costs PURCHASING AND PROVIDERS REIMBURSEMENT Clinical Guidelines Maimum Prices Forecasted volumes MONITORING AND FEEDBACK FUNCTION Hospital Usage / Costs Product Volumes Marketing Authorization Clinical data Clinical value (Local) Volume of Patients Clinical Guidelines ± Cost-effectiveness Budget/ DRG Impact Maimum Price Inclusion in Reimbursement List Hospital Usage Product Usage Real World Burden of Disease Hospital Usage ± ± Products volumes 21 Mapping Health Ltd.

OUTPUT INPUT Even when data is available, lack of communication leads to inefficiencies REGULATORY Epidemiology Clinical trials Quality SCIENTIFIC/EXPERT REVIEW Clinical (trial) data Local practice Similar clinical data reviewed by both regulatory and scientific functions leads to duplication of effort: Both The Regulatory Agency and the Scientific Epert Group review clinical trials efficacy and comparator However each may end up reaching a separate conclusion As result: Need for highly skilled staff in both functions Manufacturers face potential conflicting data demands Marketing Authorization Clinical data Clinical value (Local) Volume of Patients Clinical Guidelines ± Technical Solution: transmit the evaluation of clinical data from Regulatory Agency to the Epert Group Shared database/ transmission of documents is likely to support a speedier and more efficient decision We recognize there may be additional governance aspects to consider 22

OUTPUT INPUT The current pricing methodology does not account for critical elements such as volume, clinical practice, budget impact PRICING AND REIMBURSEMENT DECISION Clinical value (local contet) Potential volume Budget Impact COGS, other costs Price = Production Costs 4 There is no correlation to the clinical value, place in therapy and volume, burden of disease or budget impact In parallel, and independent of the drug price setting process, there is a process of setting and updating the diagnosis related groups (DRG) However annual price updates to pricing are not systematically considered by the DRG Committee Technical solutions: Revise pricing methodology incorporating the volume of patients, burden of disease, budget impact, local therapy practices Maimum Price Inclusion in Reimbursement List Start monitoring prescriptions for routine claims in order to establish actual utilization 23

Conclusions Evaluating the pharmaceutical system versus the 3 dimensions framework, several conclusions can be drawn: Mandatory functions Decision sequence Information flow 1. With regards to Mandatory Functions: All functions are present and the system should be able to perform Pharmacoeconomics and Monitoring function should still be strengthened 2. Assessment of the the decision sequence highlighted: Reimbursement decisions should be postponed until volume is assessed and pricing agreement is reached 3. Assessing the information flow, several solutions were identified: Improve information echange between regulatory and clinical function Update the pricing methodology to reflect the more sophisticated health system, linking price to clinical and utilization data Update the DRGs in line with real drug prices and local clinical practice Monitor medicine prescribing and ependiture 24

Thank you! Thank you for your attention! Open floor for questions and comments 25

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