Transcript Pharmacoeconomic input to Australian drug subsidy

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Applying economic evaluation to drug
subsidy decisions:
an Australian perspective
Adriana Platona
Director
Pharmaceutical Evaluation Branch
[email protected]
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Australian system
 Universal
access through Pharmaceutical Benefits
Scheme for over 50 years
 Cost-effectiveness
evaluation mandatory for
decisions about funding of pharmaceuticals since
1993
 Experience
from >1,150 PBAC decisions involving
economic evaluation
 Is
the system it perfect?
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 NO,
JUST THE BEST!
 To
provide timely, reliable and
affordable access for the Australian
community to necessary and costeffective medicines
– Equity of access AND value for money
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Australian health care system
 Federal
government - Canberra
– subsidises community-based services
 State/territory
governments
– provide public hospital services (partially funded by
federal government via transfer payments)
Coordinated care?
 Coordinated policies for drug purchasing ?
Tendering occurs in hospitals, nationally for
vaccines, but not for PBS

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Major community programs
 Medicare
Benefits Schedule
– medical, pathology, diagnostic, imaging services
– Medical Services Advisory Committee (MSAC)
 Pharmaceutical
Benefits Scheme (PBS)
 National Immunisation Schedule
– Pharmaceutical Benefits Advisory Committee (PBAC)
 Current
work – improve coordination
– In decisions eg for hybrid technologies, drugs requiring
molecular testing
– In processes MSAC 12-18 months; PBAC 17 weeks
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The 17 week PBAC cycle
 Manufacturer
prepares application
 Submission is evaluated 10 weeks
 Technical sub-committees – Economics, Drug
Utilisation
 Occasional PBAC initiates reviews
–
–
–
–
ATRAs vs ACE
Herceptin metastatic breast cancer
Clopidogrel for stable angina in patients undergoing stenting
Current work: rheumatoid arthritis
fee currently charged for evaluation – proposal to
introduce cost-recovery
 Independent review of PBAC decisions
 No
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Forecast DoHA Expenditure
2008/09 Au$billion
7.3
13.9
7.3
Pharmaceutical
Benefits
Aged and
Community Care
Healthcare
Agreements
Medicare Benefits
Other
13.6
9.7
8
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PBS cost to government
6000
Au$ billion
5000
4000
3000
2000
1000
0
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02
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07
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1
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20
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Concessional
General
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94
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-0
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Millions of scripts
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Volume of PBS prescriptions
180
160
140
120
100
80
60
40
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0
Concessional
General
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Regulatory and reimbursement
 1.
Marketing approval from TGA “registers”
drug
– efficacy, safety, quality
 2.
PBAC “recommends”
– comparative effectiveness, comparative safety,
comparative costs
– www.health.gov.au or www.pbs.gov.au
» PBAC Outcomes and Public Summary Documents” ;
PBAC agenda published 6 weeks prior to meeting
 Minister
“declares”
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Current work
 Strategic
collaboration between regulatory
clinical evaluation and reimbursement clinical
evaluation
- For methodological issues: eg. surrogate outcomes,
molecular targeting
- Processes
- Better use of scarce evaluation resources
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All major submissions have an
economic analysis
 New
drug
 Major
change to current restriction
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Major submissions 1991-2008
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07
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99
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subsequent
no eco eval
1st eco eval
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93
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#
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80
70
60
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40
30
20
10
0
Types of economic evaluation in
manufacturers initial submissions
Number: 38 67 47 62 58 61 61 47 51 46 36 36 49 49 52 49 809
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
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93
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94
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95
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96
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99
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00
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01
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02
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08
To
ta l
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c/ma
partial
c/ea
c/ua
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 PBAC
does not have a single threshold for the
incremental cost-effectiveness ratio (ICER)
 Strength of economic evaluation depends on
quality of clinical data!
 Weak clinical data means uncertain ICER
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Activity Indicators for the
Pharmaceutical Benefits Scheme
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Activity indicators
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 Uncertain
ICER can be managed through
 better data and/or lower price
 frequently backed up by legal contracts (deed of
agreement) between government and drug
company about jointly managing the risks in
financial expenditure
 a few examples of CED in practice
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Cost-Effectiveness: benefits
 “Outcomes-based
reward system” – buy health
outcomes
 Cost-justification - not legal to pay a higher price
unless a drug has better efficacy or better safety
over the comparator
 Robust, consistent decision-making
 Basis for greater transparency
 BUT not always a cost-containment tool
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Current PBAC Guidelines
Current PBAC Guidelines URL:
– http://www.health.gov.au/internet/main/publishing.ns
f/Content/pbacguidelines-index
– 2008 (version 4.3)
 No
minimum standard for clinical data
(Complex decisions for drugs for orphan indications)
 Promote
comparability across submissions
 Transparent inputs and methods of analysis
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6 sections to a major submission
 A:
context
– restriction and comparator
 B:
clinical evaluation
 C: details of inputs into economic
evaluation
 D: economic evaluation – structure and
results
 E: utilisation and financial implications
 F: quality use of medicines, risk-sharing
arrangements and other relevant factors
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A: context of submission
 Requested
restriction
– aim is to identify and restrict in those likely to
benefit most
– Problematic when discordance between
regulatory and reimbursement indications arise
 Main
comparator
– pragmatic: “the therapy prescribers would most
replace in practice”
– can be a product which is generic
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B: clinical evaluation – EBM
approach
 Hierarchy
of preferred sources of evidence
– direct randomised trial(s)
– indirect comparisons: two sets of randomised
trials involving common reference
– non-randomised studies
– expert opinion
 Minimise
systematic and random error
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Issues with cost-minimisation
 Usually
based on indirect comparison which introduces
uncertainty
– Trials not always comparable
– Minimum clinical important differences not always justified
(partly related to lack of coordination and insufficient details
for decisions made by regulatory authorities)
– See expert reports on www.pbs.gov.au
 The
new products simply asks for the same price of the
comparator, not a reduced price
 Although applications claim that one product replaces
another with small financial expenditure – often not true
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Superiority vs noninferiority
Treatment effect over comparator
Treatment effect over comparator
Better
Better
?
Superior
x
?
Noninferior
x
x
0
Drug B
Drug A
0
x
MCID
Drug D
Drug C
Worse
Worse
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C: Translating trial evidence
New section in the Guidelines
Request a more explicit set of connections
between the clinical and economic evaluations
Identify and investigate whether translation
issues arise and the impact on ICER


1.
–
2.
3.
applicability, extrapolation or transformation
Facilitate independent verification
Relate results to the economic evaluation
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Guidance on translation
 Applicability
of trial results to Australian patients
– critical issue for HIV drugs, diabetes drugs
– subgroup analyses where justified
 Extrapolation
beyond trial horizon
– What assumption is made about the treatment effect beyond
the trial
 Transformation
of trial outcomes
– surrogate to final outcomes
– utility valuation
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Surrogate to final outcomes
3 steps to a more convincing transformation
Association between surrogate and final

1.
–
–
TE on surrogate predicts TE on final
2.
–
–
3.
typically epidemiological (longitudinal) studies
plus biological reasoning
requires randomised trials
eg vit D analogues for renal disease
Rationale to accept this prediction given the
mechanism of action of the proposed drug
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Association – what we get
Final
outcome
Association
Eg Framingham in
CVD
Projected
(inferred)
difference in
final outcome
Detected difference in
surrogate outcome
Surrogate
outcome
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Trial-based predictions – what we would
like to get: capture uncertainty
Prediction bound
Difference
in final
outcome
Relationship
Prediction bound
95% CI of
relationship
95% CI of
relationship
Difference in
surrogate outcome
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Surrogate to final outcomes
 Extremely
complex technical area
 Large area of uncertainty for ICER
 Need randomised controlled trials
 Enthusiasm for biomarkers as surrogate outcomes
– Smaller, faster trials
– But quantification of benefits uncertain
– Implications for safety assessment?
– Needs early and strategic engagement of regulatory and
reimbursement agencies
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D: economic evaluation
 Select
between noninferiority and superiority
– for noninferiority
» select between cost-minimisation and cost analysis
– for superiority
» purely trial-based or
» “stepped” evaluation – each step is linked with an area of
section C
 More
extensive sensitivity analyses
– broad assessment of uncertainty – REMAINS AN
ISSUE
– probabilistic sensitivity analysis has a role (new)
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Valuation of outcomes
 CUA
preferred
 Utilities from the same trials as the treatment effect
using MAUI
 No preference for a particular MAUI – rare to have trial
based
 Choice experiments: SG, TTO accepted
 Critical issue: framing bias in scenarios, interpretation
of utility gain
 QALYs not always useful - paucity of reliable research
about the trade-offs individuals are prepared to make
for children, end-of-life
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Other supplementary analyses
accepted in the base case – only in
sensitivity analyses
 Not
» production changes
» carer impacts
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Summary of current issues
 Early
and strategic engagement of regulatory and
reimbursement agencies
 Better coordination for drug-device/drug-test
products
 Economic evaluation is only one component for
pharmaceutical policy in Australia
 Published prices vs real effective prices
 High costs medicines
 Risk sharing arrangements
 CED
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Pricing policies
For brand medicines or vaccines, after positive PBAC
recommendation that drug is cost-effective – consideration by
PBPA
 PBPA – Health, Industry, consumer, pharma industry
 Declaration about cost of production
 Profit margin approx 25-30% acceptable

Lower uptake of generics than in most other OECD countries –
remains an issue
 Until 2006, through cost-minimisation, generics entrant had the
same price as the already available branded product
 Financial benefit of generics accrued to pharmacy not federal
government

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Pricing policies
 Mandatory
12.5% price reduction when generic becomes
available
 1 August 2007, two separate formularies
– F1 – single brand medicines
– F2 – multiple brands; price reductions from 1 August 2009
» F2A – 2% price reduction for three years
» F2T – one-off 25% price reduction
– No links between the F1 and F2 – some anomalies
» Alendronate – risedronate; SSRI but not venlafaxine; simvastatin
but not atorvastatin or rosuvastatin
disclosure – aims to claw-back discounts by
manufacturers to pharmacy
 Price