Transcript No Slide Title

The wider world of
Health Technology Assessments
SMC – Looking Back, Looking Forward
Royal College of Physicians of Edinburgh
23 September 2008
Prepared by Brian Godman ([email protected])
Mario Negri Institute for Pharmacological Research and
University of Liverpool
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2008 SMC Conference
1. Introduction
2. SMC vs. the world
3. Future considerations
4. Conclusions
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2008 SMC Conference
Reforms will intensify to enhance quality and
efficiency to prevent prohibitive tax increases
 Healthcare expenditure represents a significant proportion of
national expenditure among western countries
 Alongside this, EU Governments strive to maintain universal
access as costs increase with greater prevalence of chronic
diseases, stricter management targets and new drugs (over
20% of new NCEs are expensive biological drugs)
 This will result in further reforms to moderate future rises in
expenditure. Reforms include
 Stricter regulations for granting premiums for new drugs
 Limiting funding for drugs where concerns
 Further reforms to encourage generic prescribing,
significantly lower generic and originator prices, as well as
encouraging their use first line where standard
 Instigating VBP approaches to release valuable resources
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Resource pressures will grow in Europe with an
ageing population causing increasing concern
Projected demographic changes in e.g. Austria 2004 to 2030
Year
2004
2015
2030
Age group 0 – 14
16.2%
14.1%
13.2%
Age group 15 to 59
61.9%
61.3%
54.7%
Age group over 60
21.9%
24.6%
32.1%
 In France by 2020 those aged over 60 will outnumber those
aged under 20 automatically increasing health care
expenditure by 1.5% to 3.2% of GDP (30%)
 These costs will be exacerbated by growing numbers of
patients dependant on social services as mental, neurological
deficiencies and physical disabilities increase with age
 As a result, further reforms are needed for comprehensive
healthcare without prohibitively increasing taxes
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2008 SMC Conference
1. Introduction
2. SMC vs. the world
3. Future considerations
4. Conclusions
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SMC provides direction to other countries as
they seek additional measures
 Government bodies involved with reimbursement or funding
decisions for new drugs should incorporate four measures
to ensure continued comprehensive healthcare and early
access to new valuable innovative drugs
 The four measures are:
 Transparency of decision making processes
 Robustness of decision making
 Comprehensiveness across all healthcare sectors
 Speed of decision making
 SMC performs well in all these areas when compared with
other European countries, Canada and the US
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SMC - Transparency
 SMC has clearly stated requirements for clinical and
economic data, e.g. in their guidance to manufacturers:
 New drugs are typically funded if ICER is below
cost/QALY of £20,000
 Above £20,000/QALY, decisions will incorporate issues
such as the degree of uncertainty, the innovative nature
of the new drug and sometimes wider societal costs and
benefits
 Above an ICER of £30,000/QALY, the case has to be
strong even in priority disease areas

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This contrasts with Canada, other European countries, and
US where there are no formal cost/ QALY cut-off levels
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There are no formal economic criteria for new
drugs in Austria or France
Country
Current decision making criteria

Austria



France


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New products assigned ‘substantially added’
benefit’, ‘added benefit’ or ‘similar’ with no
transparent regulations for decisions
However, limited premiums for most products with
average EU prices only for new products with
substantially added benefit
No formal cost/ QALY cut off levels
New products assigned an innovation level of I
(major importance) to V (no improvement) – no
transparent regulations for assignment
‘Average European pricing’ granted to new
products ASMR I to III (and sometimes IV)
No formal economic assessments (CEA or CUA)
and no formal cost/ QALY cut-off levels
New products are assigned ASMR (Amelioration
du service medical rendu) rating in France
ASMR rating
Explanation (versus current standards)
ASMR I
Major improvement (new therapeutic area,
reduction in mortality)
ASMR II
Significant improvement in efficacy, and/or
reduction in side-effects
ASMR III
Modest improvement in efficacy and/ or reduction
in side-effects
ASMR IV
Minor improvement
ASMR V
No improvement
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Ref: Andrieu, Godman et al (re-submitted)
There are no formal cost/ QALY cut-off levels in
Canada or Germany. Different in Ireland
Country
Current decision making criteria

Canada
(CDR)



Germany

Ireland
(HSE)
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
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Strict assessments of the clinical and economic
benefits of new drugs
Recommended that manufacturers use clinically
relevant outcome measures in robust studies to
strengthen the review (clinically focused)
No formal cost/ QALY cut-off level
No formal review of the role and value of new
drugs prior to launch with Sickness Funds relying
on a mixture of supply and demand side reforms
to control pharmaceutical expenditure
No formal cost/ QALY cut-off levels in decisions
Selected products assessed against cost/ QALY cut
off of €45,000
Some flexibility depending on disease area
There are no formal cost/QALY cut-off levels in
Sweden or US. Different in England
Country
Current decision making criteria

Sweden


UK England


US (MCOs)

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Cost-effectiveness and cost-utility analyses are
used to determine reimbursement for new drugs
(no, limited or total population)
No formal cost/QALY cut-off limits
No formal cost/QALY cut-off levels
In reality with few exceptions, NICE approves
funding for new technologies with a cost/QALY
less than £30,000
Typically managed care organisations in the US
place new products on Tier 3 or 4 (highest copayment) until they can assess their value in
practice
CEAs generally used rather than CUAs with no
formal cost/ QALY cut-off levels
The TLV in Sweden has not established cost/
QALY cut-off levels for a number of reasons
 The reasons given by the TLV (Reimbursement agency) in
Sweden for not establishing cost/ QALY cut-off levels
include:



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There should be different cut-off levels for different
disease areas
Companies will price their products close to any stated
limit to maximise prices, i.e. ‘play the system’
Cut-off levels will need constant revision with inflation
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Ref: Wettermark, Godman et al 2008
SMC transparency enhances decision making.
Robust decisions also in Canada
 The transparency in decision making in Scotland leads to
robust decisions where products with limited value are
either rejected or prescribing limited. Decisions are similar
even after review
 There is a similar percentage of new products rejected or
restricted in Canada, with its tight focus on clinical criteria.
Both compare favourably with EU countries, e.g. Sweden
 Limiting the number of new drugs assigned ‘substantially
added benefit’, coupled with limiting premiums for products
with ‘added benefit’ and price discounts for similar
products, also helps moderate growth in Austria where no
formal cost/ QALY cut-off levels
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% of total
SMC Decisions 2006 and 2007
60
50
40
30
20
10
0
2006
2007
Accepted
Accepted restricted use
Not recommended
The % of
submissions
accepted or rejected
similar between
Canada and SMC
Year
CDR decisions (Initiation up to April 2007)
60
% Total
50
40
30
20
10
0
List/ List in similar
manner
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List with restrictions
Reject
Ref: SMC and CDR websites 2008
Decisions following re-submissions are similar.
Acceptance enhanced by identifying sub-groups
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Source: SMC
In Austria limiting the number of new products
with substantial benefit helps control costs
Therapeutic benefit for
patients
Number of patients
treated
Substantial added
Majority
Added
Subgroup
Majority
Subgroup
Equal/ similar
Price (acquisition costs) in
comparison with listed products
Higher prices based on average EU
prices - Pharmacoeconomic study
required
Higher prices based on average EU
prices - Pharmacoeconomic study
required
Maximum 10% higher
Maximum 5% higher
Lower (minimum 10%)
 Only 10% of new drugs are perceived as innovative –
‘substantial addition’, with 99% of decisions upheld
 These measures combined with aggressive pricing for
generics and voluntary price reductions have limited growth
in pharmaceutical expenditure in recent years
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Ref: Wieninger 2006; Godman, Wieninger et al 2008
In Austria limiting the number of new products
with substantial benefit helps control costs
% increase
% Increase in Annual Drug Expenditure
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14
12
10
8
6
4
2
0
1994
1996
1998
2000
2002
2004
2006
Year
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Ref: Godman, Wieninger et al 2008
This compares with France where average EU
prices for ASMR I to III has increased prices
Bilateral price comparisons with UK
% versus UK
120
100
80
France
60
Germany
40
20
0
1999
2000
2001
2002
2003
2004
2005
Year
The prices of top drugs has also increased in Germany with
no formal evaluations. Extending reference classes will
help moderate future prices
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Ref: UK OFT Report 2007
Sweden has increased restrictions where
concerns – although still problems
 10% of NCEs rejected by Swedish reimbursement agency (TLV)
in 2006 as concerns with their value (similar for 2007)
 Restricted reimbursement in 20% of NCEs in 2006, e.g.:
 Orlistat - only reimbursed for patients with Type 2DM with a
BMI of at least 28kg/ m2; alternatively BMI greater than
35kg/ m2
 Rimonabant – similar criteria to orlistat (rejected by SMC)
 Rosuvastatin - only reimbursed in patients not achieving
target lipid levels with generic simvastatin

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In view of high acceptance, Regions left to restrict prescribing
of new products where concerns through guidance and financial
incentives. In addition monitor prescribing and outcomes in
practice to refine future guidance, e.g. rimonabant registry in
Stockholm County Council
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Ref: Wettermark, Godman et al 2008
SMC – Comprehensiveness enhancing
appropriateness
 SMC evaluates all new products and indications across all
sectors of care. This is unusual
 The reimbursement agencies in Austria and Sweden only
evaluate ambulatory care products resulting in companies
launching specialist products in hospitals to avoid close
scrutiny. This has accelerated sales of specialist products in
recent years, e.g. Sweden
 In France, the Pricing Committee only considers ambulatory
care products. This can lead to significant growth of
hospital products, e.g. TNF alpha products
 MCOs in US and CDR in Canada again only consider
ambulatory care products unlike SMC
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Difficult to compute the impact in Austria and
Canada where key cancer drugs not assessed
Drug and disease
SMC Decision
CDR Decision
Bortezomib (VELCADE) for
multiple myeloma
Rejected as high
costs vs. limited
benefit
Not evaluated
Pemetrexed (ALIMTA) for
metastatic NSCL cancer
Rejected as
economic case not
proven
Not evaluated
AVASTIN and ERBITUX for
metastatic ca colon/
rectum
Rejected as
economic case not
proven
Not evaluated
However, SUTENT accepted for second line in GIST patients by
CDR (rejected by SMC) and rejected for metastatic renal
carcinoma (similar to SMC)
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Source: SMC and CDR websites
SMC – Speed of decision making enhancing
access
 The speed of decision making in Scotland enhances early
access to innovative drugs demonstrating value despite a
considerable number of annual reviews
 This compares currently with other countries, e.g.
 Canada - where the Provinces undertake further reviews
following CDR decisions
 England – where ‘NICE blight’ exists (being addressed)
 US – where patients wait for favourable formulary listing
 France has accelerated launch of new innovative products
(ASMR I to III) by granting average European prices.
However other measures instigated to keep expenditure
under control such as compulsory price cuts and rebates
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2008 SMC Conference
1. Introduction
2. SMC vs. the world
3. Future considerations
4. Conclusions
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Future considerations could include the
following
 Further restricting funding to sub-populations when budget
impact becomes a major issue in Scotland for new drugs
 Explore avenues such as risk sharing arrangements and
outcome guarantees that involve ‘free drug’ or other
arrangements building on initiatives in other EU countries,
e.g. cancer examples in England and Italy
 Help establish minimum clinical improvements for
authorising funding for new drugs, e.g. PIPERSKA group
 Support OFT pricing proposal for reference pricing of
existing drugs to release valuable future resources to fund
new innovative drugs especially with over $100bn globally
of product sales loosing their patent in next four years
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HERCEPTIN is crowding out other anti-cancer
drugs causing budget pressures in England
 Estimated HERCEPTIN will cost £1.9mn/ year in drug costs
for 75 patients with early breast cancer in one UK hospital
 Significant budgetary and clinical implications:
 355 patients treated with older drugs for £0.5mn – 16
cured; cost/cure for aromatase inhibitors = £15,000
 Cost/cure of HERCEPTIN = £650,000 (3 extra)
 HERCEPTIN also crowds out other palliative treatments,
e.g. 4 x cost of taxanes in breast cancer
 These concerns will grow as more high priced cancer drugs
launched leading to new methods to restrict use to defined
sub-populations to stay within budget
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Ref: Barrett et al 2006
New high priced cancer drugs will cause concern
potentially increasing taxes unless addressed
 The next generation of cancer drugs will further improve
morbidity and survival
 However Professor Sikora recently estimated they could
cost the UK up to £50billion a year within four years equivalent to raising the basic tax rate by 15% (15p in the
£)
 This will necessarily lead to bugdet impact considerations in
Scotland potentially further restricting funding of new drugs
to defined sub-populations where concerns
 Other approaches such as risk sharing also need to be
considered to reduce prohibitive tax increases
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Ref: Sikora, Daily Mail 9 Sept 2008
Risk sharing schemes include VELCADE in
England and donepezil in Italy
 VELCADE (Bortezomib) – agreement in England that if patients
not responding by 4th cycle treatment stopped and free
supplies given to hospitals
 Revised cost/QALY of £20,700 accepted as within limits
 In Italy, discounts negotiated for reimbursement of new cancer
drugs alongside routine monitoring of outcomes, e.g.:
 Tarceva – 50% discount for the first 2 cycles, re-evaluation
at 8 weeks (restricted use – SMC)
 Nexavar - 50% discount for first 3 months with reevaluation at 3 months. Pay back for non-responders (not
recommended - SMC)
 Sutent – 50% discount for first 3 months, further discount of
3.4% for patients with metastatic renal cancer
 Sprycel – 7% discount, 10 – 12 days free treatment
(restricted use – SMC)
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Source: NICE website, Breckenridge and Walley 2008, S Garattini April 2008
Risk sharing schemes include VELCADE in
England and donepezil in Italy (continued)
 The CRONOS scheme in Italy developed to appraise possible
public reimbursement of Alzheimer drugs as concerns initially
with their value. Prior to this 100% co-payment (‘C’ category)
 Under the scheme:
 Drugs provided free by the industry for four months. ‘Free
drug’ (‘A’ category) thereafter for responders
 Patients must be monitored in out-patient memory clinics to
obtain ‘free’ drugs (AEUs – Alzheimer Evaluation Units)
 Patients’ responses must be entered onto specifically
designed forms, which were subsequently analysed
 This ‘real life’ studies demonstrated that AD drugs do have
some activity on cognitive function and performance leading to
full reimbursement if patients managed in designated OP clinics
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Source: Fuschillo et al 2004, Ballelli et al 2005
West Midlands HA has pioneered an outcome
guarantee scheme building on targets
 An outcomes guarantee was established in 2000 for
atorvastatin in North Staffordshire HA and Keele University in
high risk patients as part of a national priority target (CHD
reduction)
 Under the scheme, an LDL target level was set for titrated
statin use with the sponsoring company providing nursing
support to help identify and monitor patients. Concordance was
measured, with patients followed up to enhance compliance
 Agreement that refunds would be given to practices if patients
failed to reach target LDL levels. However, no refunds given as
patients reached target LDL levels when properly titrated
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1. Introduction
2. SMC vs. the world
3. Future considerations
4. Conclusions
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Conclusions
 It does appear as if SMC is in good shape going forward,
and can continue to provide an example to other countries
 SMC can also leverage EU contacts to help in the future.
This is already happening through the PIPERSKA group,
e.g. potential joint Horizon Scanning activities
 SMC can also support other UK institutions to help in the
future, e.g. UK OFT pricing proposals
 THANK YOU – any questions!
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