a look at potential remedies for a broken system
Post on 24-Jul-2015
233 Views
Preview:
TRANSCRIPT
A LOOK AT POTENTIAL REMEDIES FOR A BROKEN SYSTEMStefan KapfererDeputy Secretary General of the OECD
Economist Pharma Summit
London, 26th February 2015
• The health innovation• 3 problems with innovation in health
– Wrong innovation– Wrong diseases– Wrong price
• How to fix them– Better process regulating innovation– Improve R&D environment to reduce risks
and costs – Pay for result when RoI is low
Roadmap
Q: Why is health the only sector of the economy where new technologies end up costing more than the old ones?
A: Our innovation system is broken
Smith et al. 2000
Peden and Freeland 1995
Cutler 1995 Newhouse 1992
US (1940-90) US (1960-93)
US (1940-90)
US (1940-90)
Life expectancy/aging
2% 6%-7% 2% 2%
Administrative costs
3%-10% * 13% *
Changes in financing
10% 4%-5% 10% 10%
Personal income growth
11%-18% 14%-18% 5% <23%
Health care prices 11%-22% * 19% *
Technology 38%-62% 70%-75% 49% >65%Notes: *Not estimated
…and broken systems cost us all heavily
Sorenson et al, 2013. Medical technology as a key driver of rising health expenditure: disentangling the relationship
Problem 1: we get the wrong innovations…
Major Important Moderate Minor None No rating1 0
8 10
148
20 2 48
19
1
Added therapeutic value of medicines launched in 2013, as assessed by the French Transparency Commission
New drug New indication, existing drug
Source: Haute Autorité de santé, Rapport d’activité 2014
Problem 2: … in the ‘wrong’ diseases…
Unipolar depressive disorders
Ischaemic heart disease
Other malignant neoplasms
Breast cancer
Prostate cancer
Other cardiovascular diseases
Alzheimer & other dementias
Alcohol use disorders
Nu
mb
er
of
tech
nolo
gie
s
Burden of disease
R2 Linear=0.225
New and Emerging Health Technologies identified by horizon scanning from 2000 to 2009.
Source: Euroscan network
• Late trails that failed
• Little transfer of biomedical innovation to point of care
• Risks and rewards for innovators not aligned
Research on Alzheimer’s disease illustrates the problem
Solving the problem of price: It is true that costs of innovation are inflating
Costs of bringing a successful drug to market estimated between USD 1.3 – 1.7B
2013
Solving the problem of price: policymakers can help reduce costs by…
Stronger Public Private Partnerships
Modernising regulatory pathways
Open Science for greater International Collaboration Big Data
Big data in particular has great potential
New discovery programs
Big Data
Crowd-sourcingMultidisciplinary collaborations
New models of care
Kaiser Permanente Electronic health records stores 9 million patients - 30 petabytes(*) with 2 petabytes added each year
European Bioinformatics Institute is storing 20 petabytes of data
* [1 petabyte = 1 million gigabytes]
Solving the problem of price: pay for ‘value’
Many countries grant a price premium to innovative products. However,They do not agree on « innovativeness » of new productsThey do not agree on what « value » should encompass.The price accepted for a QALY gained differs widely across therapeutic area. Does it reflect society values?They do not set cost/QALY threshold or find difficult to stick to them
What can we do?Use performance-based agreements to guarantee quick access and reduce uncertainty (evidence-development) and/or share financial risks (e.g. when health benefits lower than claimed)Do not stick to “price x volume” where inappropriate
Sometimes valuable innovations will not be used, but governments should still pay
For example, there is much discussion of how to encourage the development of antibiotics
“Push mechanisms”
• Easing approval (FDA and EC) – not enough to reduce significantly the costs of clinical trials and risky for patients
• Public-provider partnerships to support clinical trials: BARDA in the USA and ND4BB in Europe.
• Longer market exclusivity: FDA 2012 GAIN – but we doubt this will work.
“Pull mechanisms”:
• Advanced commitments or prize award in exchange to commitment to sell at low price or not sell at all (financed by a tax on animal consumption of antibiotics?)
For further information
Online:
www.oecd.org/health
www.oecd.org/sti/biotechnology
OECD work on dementia:
http://www.oecd.org/sti/addressing-dementia-the-oecd-response.pdf
Contacts:
Stefan.kapferer@oecd.org
health.contact@oecd.org – Mark.pearson@oecd.org
sti.contact@oecd.org – Dirk.pilat@oecd.org
top related