CLICK TO ADD TITLE Pricing and Patient Access Framework to Support … · 2017-03-28 · CLICK TO ADD TITLE Pricing and Patient Access Framework to Support Better Access to Medicines

CLICK TO ADD TITLEPricing and Patient Access Framework to Support Better Access to Medicines

March 22nd 2017

Organised by Thematic Working Group on Medicines in Health Systems

Contact for questions

Raja Shankar – [email protected]

Maya Malarski – [email protected]

mailto:[email protected]


Presenters:

Suthira TaychakhoonavudhChulalongkorn University

Rungpetch SakulbumrungsilChulalongkorn University

Raja ShankarQuintilesIMS

Maya MalarskiImperial College London

Panelists:

Surachat NgorsurachesSouth Dakota State University

Meet & Greet

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• Introduction - 5 mins

• Presentation – 20 mins

o Raja Shankar

o Maya Malarski

• Panel Response to Main Questions – 10 min

o Moderated by Raja Shankar

o Rungpetch Sakulbumrungsil

o Suthira Taychakhoonavudh

o Surachat Ngorsuraches

• Open Q&A with Panel – 23 minutes

o Moderated by Raja Shankar

o Rungpetch Sakulbumrungsil

o Suthira Taychakhoonavudh

o Surachat Ngorsuraches

• Close – 2 mins

o Maya Malarski

Agenda

Global penetration 5 years from launch (population on drug as % of total global

prevalent patient population)*

Sources: World Bank, IMS MIDAS, World Cancer Research Fund, “Epidemiology of atrial fibrillation: European perspective” by Zoni-Berisso, Lercari,

Carazza, Domenicucci, Centers for Disease Control and Prevention

700,000anti-TNF patients

out of all RA

patients

40,000patients out of

400,000

HER2+

trastuzumab10%

1.5mNOAC patients out of

all SPAF and VTE

patients

NOACs

Anti-TNFs

<5%

<5%

*Assumes 100% compliance and incidence rates similar across all countries

Globally, innovative medicines reach

<10% of patients five years after launch

In developing countries, they reach less

than 1%

Developing country penetration 5 years from launch (population on drug as % of

total global prevalent patient population)*

Herceptin,

NOACs,

anti-TNFs

average

<1%

Sources: World Bank, IMS MIDAS, World Cancer Research Fund, “Epidemiology of atrial fibrillation: European perspective” by Zoni-Berisso, Lercari,

Carazza, Domenicucci, Centers for Disease Control and Prevention

*Assumes 100% compliance and incidence rates similar across all countries

While this is due to many causes; a structured Pricing and Patient Access [PPA]

System can improve access to medicine, especially with Universal Coverage

There are three major considerations

when reforming PPA systems

Three main elements of the framework:

Objective Setting

Price & Access

System (Technical)

Reform Process

A PPA system helps health systems

prioritize competing access to medicine

objectives within their budgets

Ob

jec

tive

Se

ttin

g

Even the richest systems cannot achieve all objectives perfectly; each system must decide the right balance between its priorities

Provide access to all medicines

Incentivise continuing innovation in unmet need areas

Achieve equal access for all patients

Ensure quality standards

Assure reliable supply of medicines

0

2

4

6

8

10

12

14

16

18

20

Equity

Quality

Supply

security

Sustaining

innovation

Maximising

access

Rational

use of

medicines

US Germany UK Brazil India Thailand

Ensure appropriate medicine choice

and utilisation

*Size of line indicates relative budget amount

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

PPA systems must evaluate and prioritize

two different product types

Patented

(innovative or therapeutically

equivalent)

Generic

(low competition, low/high volume)

• New patented product, typically represents unique and/or high clinical value; e.g., Sovaldi and Herceptin at time of launch

• No easily comparable price benchmark exists

• New patented product, 2nd or later to market with similar MoA or therapeutic benefit, e.g. anti-TNFs, DPP4s or ACEi/ARBs

• Comparable price benchmark exists if previous one reimbursed; limited price competition also possible

• However, not completely substitutable due to possible minor differences in outcomes overall or in different patient types

• Off-patent product, but not completely substitutable between brands due to delivery mechanisms, e.g., asthma inhalers

• Price benchmarks available and limited price competition possible

• Generics with low volume use; market can only sustain 1-2 manufacturers, e.g., injectable antibiotics for MRSA

• Price benchmark exists; but price competition infeasible as manufacturers need sustainable return on investment in supply

• Generic with high volume use and can sustain multiple competitors, e.g., metformin, enalapril

• Price benchmarks available and price competition possible

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

Payers predominantly take one of three

approaches to set price and access for

these products

Clinical EffectivenessSet price and access based on extent of incremental clinical

benefit over SoC

Cost EffectivenessConsider both

incremental value and incremental cost to set

price and access

Budget OptimisationSet price and access to

minimise (incremental*) budget impact

Clinical value Cost

Driver of Pricing and Patient Access Decision

DE FR IT (N)

USA

IT (R) CA AUS

SK UK

IT (R) CA (P) UK (CCG)

SA IN BR

ID MEX

N = National, R = Regional, P = Provincial, CCG = Clinical Commissioning Group, SoC = Standard of Care

While one approach predominates, countries may use others as secondary

1 2 3

BR NZ

MAL

* For new products only

MAL

All others for generics

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

The suitable PPA approaches depend on

product type...

Clinical Effectiveness Cost Effectiveness Budget Optimisation

Clinical value Cost

1 2 3

Generic (low competition, low/high volume)

Patented (innovative/ therapeutically equivalent)

Most payers use health technology assessment (HTA) to understand the value new patented products bring

Some payers primarily focus on minimising budget impact even for new products; however, they still indirectly

consider the outcomes of HTA done by others (either national payers in their countries, or even the assessments

done by HTA bodies such as NICE in other countries)

Generics have already undergone HTA; therefore most payers use them to

free up resources to invest

in new products


...and are executed with an array of

different pricing tools

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

Patented

Generic

Clinical HTA Cost per QALY/DALY

Price volume / financial risk share agreements

Pricing based on value added services beyond drug

Therapeutic referencing

Market driven pricing

Performance based / outcome risk share

International reference pricing

Negotiated confidential discounts/rebates/free goods

Tenders

Mandated price cuts

Cost Effectiveness

Clinical value Cost

1 2 3Clinical Effectiveness Budget Optimisation


In Thailand, we recommended 3 steps to

set price and access for medicines

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

Determine Product Type

Apply HTA/ Pricing Tools

• Determine if product is patented or generic• For generics, determine if existing generic or if product

losing exclusivity

• Determine if/what type of HTA to perform based on product type

• Apply pricing and access tools based on outcome of HTA

Innovative Solutions• If a reasonable price cannot be achieved in step 2, use

innovative pricing and access techniques to achieve desired outcome

1

2

3

Recommended PPA Framework for

Thailand

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

IRP: International Reference PricingLoE: Loss of ExclusivitySoC: Standard of CareTRG: Therapeutic Reference Group

Central / Regional Tender or Negotiation

Product Type

Patented

Generic

Existing Generic

New Generic

≥3 CompetitorsHigh Volume

<3 CompetitorsLow Volume/ Complex


<3 CompetitorsLow Volume/ Complex

Level 1

Level 2

Level 3

Level 4

Level 5

≤3 in TRG

>3 in TRG

High unmet Need

Low unmet Need

Inpatient: Current procurement system in the short term

+IR

P+

Inte

rna

tio

na

l Re

fere

nc

e P

ric

ing

+R

atio

na

l Use

Gu

ide

line

s b

ase

d o

n c

linic

al a

nd

e

co

no

mic

co

nsi

de

ratio

ns+Ti

me

in M

ark

et

Dis

co

un

t2

-5%

pe

r ye

ar

aft

er 2

ye

ars

Max. Procurement Price Reimbursement Price

Reimbursement Price

SH

OR

T TE

RM

LON

G T

ER

M

Set the procurement reference price based on median price of products with ≥10% market share or of the 4-5 top products by volume

Central / Regional Tender


40% discount from brand price (based on max. procurement price)at LoE, next two entrants priced at further 10% discounts

Cost Effectiveness-based negotiation

Alternative Funding Solutions

+


Negotiate with manufacturer or wait for more data

Not recommended for listing until clinical benefit can be demonstrated

Reimbursement Price: Price that central procurer pays for product including taxes and margins

Max. Procurement Price: Maximum price at which hospitals can currently procure products excluding hospital margins

10% discount from previous entrant for the 2nd and 3rd

entrants If high budget impact renegotiate after 2 years


PPA for generics largely driven by

harnessing competitive forces

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

Generic

Existing Generic

New Generic



<3 CompetitorsLow Volume/

Complex



Complex


+IR

P


SH

OR

T TE

RM

LON

G T

ER

M





+IR

P

Generic

Existing Generic

New Generic




Complex



Complex


+IR

P


SH

OR

T TE

RM

LON

G T

ER

M





+IR

P




Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

Incremental Benefit over SoC Level of unmet need Public health importance

• Extent of additional clinical

benefit over standard of care

Influencing elements:

− Extent of benefit -efficacy, safety, QoL

− Strength of evidence –trial design (head to head vs. placebo vs. single arm trials), size of trials, duration of trials,

patient inclusion criteria

• Extent of patient and

caregiver unmet need


− Mortality

− Morbidity

− Quality of Life (QoL)

− Patient economic and social impact

− Caregiver burden

− Number and quality of available alternative treatments

• Extent of benefit to the

broader population and health system


− Number of people directly and indirectly affected by the condition

− Total health system resources consumed

− Economic burden to

society

− Preventive effect

1 32

Description of each factor

For patented medicines, we must first

assess incremental benefit based on

three factors

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

The level of benefit should be determined

through an integrated assessment of

these factors

Level 1

Level 2

Level 3

Level 4

Level 5

Lev

el o

f b

en

efit

Incremental Benefit over SoC

Level of unmet need

Public health importance

Example

VerySubstantial

High - Very High High – Very High Prevenar

Substantial –Very

SubstantialHigh - Very High High Sovaldi

Substantial Moderate - High Moderate - High Zytiga

Slight or Same N/A N/A Tradjenta

Unquantifiable High or Low High or Low Bosulif/Glybera

1 32

Level of benefit recommended to be determined by an expert committee from the NLEM and/or

NHSO with clinical experts appointed for each appropriate therapy area

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)




+IR

P

Patented

Level 1

Level 2

+R

atio

na

l Use

G

uid

elin

es

ba

sed

on

clin

ica

l an

d e

co

no

mic

co

nsi

de

ratio

ns

+Ti

me

in M

ark

et

Dis

co

un

t2

-5%

pe

r ye

ar

aft

er

2

ye

ars

Reimbursement Price


Alternative Funding Solutions

+

Negotiation strategies:• Confidential price-volume

agreements• Risk-sharing• Discounts/ rebates

Alternative strategies:• Restrict to sub-populations • Innovative funding solutions:− High value, high cost drugs fund− Additional funding sources− Co-payments− Added services

• Increase cost effectiveness threshold

Products with high clinical benefit can

undergo cost effectiveness analyses to

help negotiate price and access

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

Negotiation strategies:• Confidential price-volume

agreements• Risk-sharing• Discounts/ rebates

Patented Level 3 Cost Effectiveness-based negotiation +IR

P

+R

atio

na

l Use

G

uid

elin

es

ba

sed

on

clin

ica

l an

d e

co

no

mic

co

nsi

de

ratio

ns

+Ti

me

in M

ark

et

Dis

co

un

t2

-5%

pe

r ye

ar

aft

er

2

ye

ars




For products with substantial clinical

benefit CE analyses and negotiation can

help to set price levels

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

+IR

P

Patented Level 4

≤3 in TRG

>3 in TRG

Reimbursement Price

10% discount from previous entrant for the 2nd and 3rd entrants If high budget impact renegotiate after 2 years


+R

atio

na

l Use

Gu

ide

line

s b

ase

d o

n c

linic

al a

nd

ec

on

om

ic c

on

sid

era

tio

ns




Therapeutic reference pricing can be

used for products with comparable

clinical benefit to SoC

Patented Level 5

High unmet Need

Low unmet Need

Reimbursement Price

Negotiate with manufacturer or wait for more data

Not recommended for listing until clinical benefit can be demonstrated

Access Strategies:• Negotiate with manufacturer for

an interim price• Conditional access agreement for

prioritized products

+IR

P

+R

atio

na

l Use

Gu

ide

line

s b

ase

d o

n c

linic

al a

nd

ec

on

om

ic c

on

sid

era

tio

ns




Products with an unquantifiable clinical

benefit can be listed if high unmet need,

otherwise wait to grant access

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

IRP should be applied to:

Patented Products and...

...Low Volume Generics

Competitive forces are sufficient to address pricing for high volume generics

Through a 3 Step Process:

1. Select reference basket

2. Select price to reference

3. Set price ceiling depending on product type:a. Marketed Patented Medicines

and Low Volume Genericsb. New Patented Medicines

IRP is only one tool to set ceiling price; further discounts can be negotiated based on the overall PPA framework and tools discussed above

International Reference Pricing (IRP) can

be used as an additional safeguard to

achieve a fair price

Pric

e &

Ac

ce

ss S

yst

em

(Te

ch

nic

al)

PPA system implementation needs to

address four areas to ensure a successful

transition

Re

form

Pro

ce

ss

1 2

3 4

Awareness Building Institutional Change

Stakeholder Buy-in Capability Building

Discussion & Questions

Panelists

• Rungpetch C. Sakulbumrungsil - Chulalongkorn University, Thailand

• Suthira Taychakhoonavudh - Chulalongkorn University, Thailand

• Surachat Ngorsuraches - South Dakota State University, USA

Questions

1. What challenges in medicine access as part of universal coverage, led NHSO

to seek advice on pricing and patient access reform?

2. What were the major lessons from the project process that could be relevant

for other countries undertaking similar efforts?

3. What are some of the implementation challenges going forward?

Thank you

Acknowledgements

www.healthsystemsglobal.org

Documents

CLICK TO ADD TITLE Pricing and Patient Access Framework to Support … · 2017-03-28 · CLICK TO ADD TITLE Pricing and Patient Access Framework to Support Better Access to Medicines