market access status and trends 2015 jorge wernli ecpm 22 ... · value of health = the deﬁnition...

© WHP world health partners | management consulting

Market Access status and trends 2015 Jorge Wernli ECPM 22-24 July 2015, Uni Basel

[email protected]

Agenda- Status and Trends Market Access

15.06.15 ©WHP, [email protected] 3

1.  Assure KSF- early evidence, knowledge & capabilities

2.  Champion patient orientated market access policies & concepts

3.  Understand /participate in health political dynamics

4.  Consider well balanced P&R strategies 5.  Outlook and challenge

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1. Assure KSF- knowledge & capabilities

©WHP, [email protected]

Value of health = the definition changed substantially over the last 20 years

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WHO: Health is the state of complete physical, mental and social well-being and not merely the absence of disease

Included are therefore main elements of Quality of Life -  Physical -  Mental -  Social well-being


4 elements towards an optimal price in Pharma

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Pharmaceutical Price

Socially accessible

Medical - Scientifically sustainable

Politically acceptable

Financially sound

Pharma Industry

Health-Authorities

Ministry of Social Affairs Patients


Drug therapy evaluation: commonalities

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Nat

iona

l

Regi

onal

Market

Qua

lity

Safe

ty

Effica

cy

Market License

Pricing & Reimbursement Q = Quality

E = Efficacy S = Safety U = Usefulness N = Need C = Cost-effectiveness

Guenther Lewandowski et al VP BGA, 1985

Loca

l Lo

cal (

hosp

)

HTA (Need, Usefulness Cost - effectivness)


KSF, critical knowledge and capabilities- be well early well prepared, be innovative

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1.   Legitimacy: Assure early payer-relevant clinical and health-economic evidence /form developed and implemented

2.   Reputation: gain economies of time by being a well-known leader-player

3.   Knowledge: Know well your products and legitimacy = clinical and health-economic evidence and local pricing policies/system

4.   Environment: Understand and participate in shaping local market access /P&R policies, dynamics and systems in place

5.   Negotiation: Prepare well negotiation strategy and implement tactics


Legitimacy: needs vary by indication

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Unique Propositio

n

Unacceptable

Unique Propositio

n

Unacceptable

Unique Propositio

n

Unacceptable

Unique Propositio

n

Unacceptable

Unique Propositio

n

Unacceptable

Unique Propositio

n

Unacceptable

Ultra-Orphan Oncology MaB Alzheimer’s Anatomical procedure for hypertension

Source: A. Cirrincione, 2014 ©WHP, [email protected]

The required level of evidence vs acceptability of premiums vary by indication- unmet needs

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Leve

l of E

vide

nce

Expectations of minimal incremental clinical benefit over SoC

Alzheimer’s Hypertension

Breast Cancer

Pancreatic Cancer

Ultra Orphans

Source: A. Cirrincione, 2014 ©WHP, [email protected]

What makes a product valuable ? Payers perspective

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1.   Unmet clinical need of high priority 2.   Meaningful clinical differentiation 3.   Clinical and other evidence that cannot easily be “ignored”

or “discredited” –  regulatory label claims –  head to head RCTs –  hard endpoint outcomes –  certainty of promised results

4.   Manageable budget impact 5.   Acceptable benefit-to-cost ratio


R&D to address payers needs early

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§ Think about Pricing and HEOR strategy early in clinical development

§ Consider the possible health economic impact/value of the drug early in development (pre-phase II)

§  include relevant QoL instruments in the study protocols

§ consider measuring direct /indirect resource impacts in the pivotal studies

§  «Within-Trial» based-HE analyses (eg FAIR-HF, Vifor Pharma) are better accepted than overly complex, indirect HE models


Innovations are mostly in the 3 Quadrant

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Better efficacy but more costly !

Source: Dr. Peter Braunhofer,2012


P&R KSFs,- regulatory and clinical opportunities and caveats

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1.  Any registration change can impact P&R label 2.  Clinical evidence vs wrong ref product reg.

dossier 3.  Sequence of indications, TAs label 4.  Max application dosage label 5.  Sequence of strengths launch, defense 6.  Sequence of pack-sizes launch,

defense 7.  Clinical value evidence launch, defense 8.  Economic value evidence launch, defense 9.  Strength of advocates launch,

defense ©WHP, [email protected]

Reputation footprint- coherence needed

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•  What makes a company personality ?

1.  THINK 2.  TALK 3.  LOOK 4.  WALK

Source: Prof. Dr. Walter P. von Wartburg et al 1996


Product knowledge, acceptable therapeutic “ technical “ referencing is key

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Sl # Trade Name Form Pack Size New Pharmacy Price (AED)

New Public Price (AED)

Company Source Agent 2417 FEROMAX Injection/Solution

for 5ml Ampoule x 5

83.86 104.00 JULPHAR (GULF PHARMACEUTICAL INDUSTRIES)

UAE JULPHAR

2419 FEROSAC 20mg/ml

Injection 5ml Ampoule x 5

83.70 104.00 SPIMACO (AL QASSIM PHARMACEUTICAL PLANT)

SAUDI ARABIA CITY PHARMACY CO.

New therapy

Gulf States


3 trends in Pricing & Reimbursement

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Pricing & Reimbursement

Innovation value Usefulness Need Cost-Effectiveness









U= Innovation value/rel. effectiveness N= Need C = Economics /Cost-effectiveness


For pharmaceuticals there are fundamentally two different P&R market types

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Healthcare Pharmaceutical markets

Regulated Markets

Free Markets

Semi-regulated Markets

•  USA •  Germany

Public payers Private payers

•  CH •  UK

Mixed ©WHP, [email protected]

Strategic negotiation dimensions

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3st D: Setup

2nd D: Deal Design

1st D: Tactics

3 Ds concept**

Political/Reputation

Polit

ical

*

• ** 3Ds, Sebenius et al • * Healthcare specific, von Wartburg et al


Negotiation success: substance vs relationship

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1.   Outcome –  Substance component : –  if substance is required, –  relationship measures don’t

help 2.   Efficiency

–  Relationship –  component: if relationship, –  trust is required, scientific evidence is of

no help

Subs

tanc

e Relationship


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2. Champion applied market access policies & concepts/definitions


Pricing & Reimbursement key definitions by category

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1.  Price definitions and types 2.  Value definition, health outcomes value (what are we

valuing) 3.  Evidence process 4.  Driving health authority agencies


Pharmaceutical prices are defined at different value added levels, not all are public

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Price type Specification Components Example Index

Price to Public(PP) Price of pharmacy or hospital to patient

WHP + tax 126 (incl 7.5% VAT)

Wholesaler Price (WHP)

Price of wholesaler to pharmacist or hospital

LEFP + wholesaler margin

107

List Ex Factory Price (LEFP)

Price of manufacturer or importer to wholesaler

Ex Factory Price 100

Transfer –or/supply price FOB CIF

Export price from manufacturer to affiliate or 3rd party importer - Free on Board - Cost Insurance and Freight included

Price Seller delivers to ship designated by buyer Selling price included insurance cost & freight

60


Example, Speziaitlätenliste Switzerland

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Pricing relevant concepts and key definitions Value evidence

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1.  “Value based pricing”: pricing based on value evidence, which can be health-economics /cost-effectiveness, HTA, willingness to pay

2.  Health-economics value: value evidence based classical health-economics studies, eg. on Cost-effectiveness (CEA), Cost-Minimization (CMA), Cost-Utility (CUA), Cost-Benefits (CBA), Risk-Benefit (RBA) Budget (BI) impact assessments

3.  Health Technology: EuNeTHA 2011 : a health technology is ‘any [health] intervention that may be used to promote health, prevent, diagnose or treat disease, or for rehabilitation or long-term care. This includes pharmaceuticals, devices, procedures and organizational systems used in health care’


HTA definition and aims: a multi-disciplinary approach, evidence, process

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4. HTA: Health Technology Assessment is a multidisciplinary process that summarises information about the medical, social, economic and ethical issues related to the use* of a health technology in a systematic, transparent, unbiased, robust manner The aim of HTA is to inform the formulation of safe, effective, health policies that are patient focused and seek to achieve best value. Despite its policy goals, HTA must always be firmly rooted in research and the scientific method.


Pricing relevant concepts and key definitions Evidence process

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4. HTA (contd), Health Technology Assessment types: a) micro-level” HTA aimed at appraisal of individual technologies, or groups of related technologies b)“micro-level” HTA aimed at developing clinical practice guidelines or the way in which individual technologies are combined within a delivery system to manage patients efficiently c)“macro-level” HTA which is about the efficiency of the organizational systems or architecture of the health care system e.g. Health Technology Assessment by itself


Pricing relevant concepts and key definitions Value, outcomes

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5. Quality adjusted life year (QALY): A year of life adjusted for its quality or its value. A year in perfect health is considered equal to 1.0 QALY. The value of a year in ill health would be discounted. For example, a year bedridden might have a value equal to 0.5 QALY 6. Value, health-outcomes: “changes in individuals attributable to the care they received” (Avedis Donabedian). Objective and subjective. Objective: The 5 Ds Subjective: PROs, patient reported outcomes (e.g. health-rel. QOL) ©WHP, [email protected]

The cost utility (cost/QALY) analysis allows efficiency comparison across indications

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§  Cost-utility analysis: expressed as €/QALY §  Measured using a

constructed “index” §  Quality Adjusted Life

Year: QALY

Prof. George Teeling-Smith



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7. Risk- Sharing: In many countries government / health authorities allow shared risk P&R agreements in order to allow an earlier or a deal closure at all, because there is interest for access to the new technology. There are several types of P&R risk-sharing, key categories are: •  Product performance (health outcomes or economics

driven) •  Population caps driven •  Financial caps driven The KSF for a well working shared-risk agreement is the definition and mutual agreement of key measurable shared-risk variable.


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8.Outcome measures (PCPI): There are a variety of types of outcome measures such as health or functional status, clinical measurements, adverse outcomes and complications, morbidity and mortality, patient-reported outcomes, patient experience with care, and others. Patient outcomes can be characterized in the following ways: clinical endpoints (ie, laboratory values, morbidity, mortality); functional status; general well-being; and satisfaction with medical care. Some represent an end result such as mortality or function; others are considered intermediate outcomes, surrogates (eg, physiological or biochemical values such as, HB, blood pressure or LDL cholesterol) that precede and may lead to a longer-range end result outcome.


ICER: Value evidence, who said there is only one way?


Pricing relevant concepts and key definitions Country specific concepts with global influence

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•  Relative effectiveness, potentially to be applied at a EU level

•  RWE: Real World Evidence (Observational evidence) •  SMR: Service Medical Rendu, ASMR: Amelioriation due

Service Medical Rendu (HAS), 5 classe, new ITR: Index Therapeutique Relatif (HAS)

•  WZW: Wirksamkeit, Zweckmässigkeit, Wirtschaftlichkeit (BAG, Switzerland)

•  Early Benefits Assessment: Cost-Benefits (IQWIG, Germany) •  NICE Cost-effectiveness (UK, Scottland, Wales)


Pricing relevant concepts and key definitions Key agencies driving global Pricing & Reimbursement


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3. Understand /participate health political dynamics


Environment dynamics: Economic pressure and budget squeeze

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Cost-effectiveness Studies comparing Interventiona A vs B are not enough…


P&R drug evaluation policy setting anddynamics in Europe driven by others

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HTA Cost/QALY Differential

Regional access

MoH, MoSA, PBAC -  HTA -  Capitations -  Shared-risk -  Limitatios -  IRP -  Vol. dependent prime -  Minister involvement

MoH, Iintermmin Comm ANVISA Private Market -  Local patent -  Clin superiority -  Econ superiority -  IRP Reimbursed -  HTA -  Vol. dependent prime -  Minister involvement

MoH, PMPRB -  HTA -  Categorization -  Breakthrough -  Major Innovation -  Minor Innovation -  No innovation -  IRP

Country Reference Prices



Sit. Ctry Reference Prices Loc.Inv.

Reg. access

Sit. Ctry Reference Prices, Variable

All

HTA HTA Cost/QALY Regional access

Pol.Scientific Added Value


IRP (Intl reference pricing) use and nbr is increasing

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= low price countries = most referenced countries


Key factors driving the Pricing & Reimbursement healthcare environment

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1.  Budget deficit /Economic austerity measures

2.  Increasing number of most expensive patients (chronic patients)

3.  Aim at patient access broadening (Brasil, China, Russia)

4.  Healthcare -/pharmaceutical growth rate

5.  Relative effectiveness- /HTA evaluations

6.   Cost containment measures


Cost Containment measures influence strongly reimbursed price setting and approval

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•  Delay of access to new technologies •  Reference product policies •  HTA- Health-economics abuse •  Increasing density of control mechanisms

-  Reference pricing /geographic, therapeutic -  Price-volume/cap agreements -  Shared-risk agreements -  Prescription control

•  Generics incentive


P&R/Drug evaluation and price setting criteria under constant change

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Country Decisive criteria

Negotiation Needs

Perspective P& R Decision

Sweden Back to Cost-effectiveness, cost-utility evidence, social costs included

National and counties Societal National: max reimbursable price, Counties: afford. price

UK Cost p/QALY, change of thresholds, value based pricing, PPRS

(NICE) Counties Payer, direct cost

National, Counties

Germany 1.  Free first year, submission of AMNOG dossier after 3 monts

2.  CBA/RBA In change

National GBA, Sick-funds Payer, direct costs

Over 100 sick-funds

France Innovation value replacement of ASMR by ITR (Index Therapeutique Relatif), HTA +Intl Reference pricing

(CT) CEPS

Payers National

Italy Innovation value, HTA based Intl Reference pricing

National AIFA Regions

Direct costs National, Regional

Spain Ref. pricing, HTA National, Regions Direct costs National, Regional

Greece Intl Ref. pricing for price, Reimb based on HTA, Therap Ref. Pricing

National Price National

Switzerland WZW, change towards HTA based National, Insurances Direct costs, (societal) National

Netherlands Scientific added value , CEA National Societal National


Brasil: P&R innovation and cost-effectiveness driven

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Brasil Pricing Reimbursement Access/ Volume

Funding/ Spending

Type Centrally controlled Health-Economics based

2 markets: 1)  Private market 60 Mio

people, health-insurances 2)  SUS, public

reimbursement

Centrally and de-centrally controlled in states and hospitals

Decentralized 23 states

Policy Class 1: premium vs ref product, lowest ref country Class 2: no premium Class 1, 3 criteria: local patent, clinical sup, economic sup

1)  Private market: negotiated inclusion with industries, health-insurance companies, etc…

2)  SUS, negotiation for inclusion in national reimb. list

Entity CMED ANVISA ANVISA ANVISA

Cost Containment/ Control

Price cuts Therapeutic ref pricing Intl reference pricing Pharmaco-economics

Positive lists Therapeutic ref pricing Pharmaco-economics

States formularies Hospital formularies


Controlled market, evaluation systems in use can be reduced to 4 fundamental systems

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1. Value based pricing (clinical, economics, HTA- based): CEA, CUA, CMA, CBA, CCA Swe, UK, NL, Ger, Br, Pol

2. Innovation value (clinical, economics, HTA based) e.g. Fr: SMR, ASMR 1-3 (innovative)-5 (no innovation)

- Fra, Ita, Bel, Bra, Hun 3. Therapeutic reference pricing (almost all) 4. Geographic reference pricing (IRP) (almost all) 5. Combination of above


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4. Consider well balanced, credible, acceptable P&R strategies


4 elements to consider for optimal target price

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Pharmaceutical Price

Socially accessible

Medical - Scientifically sustainable

Politically acceptable

Financially sound

Pharma Industry

Health-Authorities

Ministry of Social Affairs Patients


Value based pricing principles- mainly address the question of cost-savings

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§  Step 1: Define accepted reference products and the cost of that alternative (i.e., the reference value).

§  Step 2: Identify all factors -- or value drivers -- that differentiate the product from the competitive alternative and determine the value to the customer of these differentiating factors.

§  Step 3: Sum the reference value and the positive and

negative differentiation values to determine the full economic value.

§  Step 4: Determine the selling price, recognizing that

the product must usually be priced below full economic value as an incentive to purchase.

Economic Value Estimation

Cost of competitive alternative

Economic value to customer of unique benefits

Negative Differentiation Value

Positive Differentiation Value

Competitive Reference Value


Acceptable price needs ZOPA: value at which seller and buyer can agree

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Buyer Target Price

$ 36.-

Seller Target Price

ZOPA

Seller reservation Price

$ 42.-

Buyer reservation Price

•  Reservation price = price at which deal or walk away is the same •  HBS copyright

$ 40.- $ 38.-


Harvard Negotiation concept- by Vantage Partners

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1.  Interests-/Agenda 2.  Alternatives (BATNA) 3.  Options 4.  Legitimacy 5.  Commitment 6.  Communication 7.  Relationship

Tailormade courses by WHP Management Consulting [email protected]


Harvard 7 elements concept- by Vantage, source Vantage Partners

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Harvard Negotiation 7 elements concept, source: Vantage Partners


No ZOPA, - need for innovative ways to come to a ZOPA

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Buyer Target Price

$ 36.-

Seller Target Price

Seller reservation Price

$ 42.-

Buyer reservation Price

•  Reservation price = price at which deal or walk away is the same •  HBS copyright

$ 39.- $ 40.-

No ZOPA


Comparative cost-minimization assessment between IV iron products in the treatment of ID/IDA


Free markets drug therapy value based pricing approach

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1.  Assessment of willingness to pay by patient and or insurance

2.  Conjoint measurement value assessment 3.  Price sensitivity assessments 4.  Market research


Free market: Conjoint Measurement analysis

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3 key questions addressed a.  How important are key attributes

to payer ? b.  What profile or combination of

attributes are attractive to the payer ?

c.  What is the share of preference Key steps 1.  Determine number of attributes

and attribute levels 2.  Determine number of profiles 3.  Calculate needed sample size ©WHP, [email protected]

Break-even and price sensitivity analysis

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Step 1: Identify incremental costs

Step 2: Determine contribution margin

Step 3: Calculate volume/price trade-offs

% Breakeven Sales Change Formula:

-Δ price

(CM + Δ price)

%BE=


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5. Outlook and challenge


USA: Pay today for better patient access tomorrow

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1.  Access for additional 32 M people financed by pharmaceutical companies (Obamacare)

2.  Insurance reforms 3.  Comparative effectiveness assessment 4.  Bundled payment pilots 5.  Independent payment advisory board 6.  Increased demand after 2014


France: HTA, Reimbursement and Pricing for a new drug change of systems and application

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HAS: HTA guidance

CEPS Economic Committee

for Healthcare Products

NHI Union

Ministry of Health, M. of

Social Security

LIS TING

Decision

Price

Co payment Level


CH: New HTA proposal consider added-value categories


CEE: innovative approach for smaller countries being developed

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•  Threshold for reimbursement decision varies by size of Net Budget Impact (NBI)

•  NBI is calculated from full health care system perspective (i.e. accounts for and incorporates realisable cost-offsets to healthcare system and not solely pharmaceutical expenditure)

•  Actual monetary ranges to be determined by local circumstances.

•  Higher NBI – greater the onus to demonstrate additional therapeutic value. (hence higher threshold)

•  Lower thresholds recognise the value of additional broadly equivalent products as long as they do not add substantially to budget (de-facto cost-minimisation)


Policies to be prepared for: Value-Based BudgetingPragmatic Decision Making Framework vs Net Budget Impact

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NBI

PDM F Score

1)  Added therapeutic benefit

2)  Local Heatlh System prioirities

3)  Reimb status in other countries


Innovative PP policy platform innitiatives

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Association Charter and Annual Plans 2013-15 28 November 2013

Source: Dr. Mario G. Levrero


Possible platform concept


Key market access capability dimensions


Summary KSFs for fast market access and optimizing pricing & reimbursement

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1.   Legitimacy: Assure early payer-relevant clinical and health-economic evidence /form developed and implemented

2.   Reputation: gain economies of time by being a well-known leader-player

3.   Knowledge: Know well your products and legitimacy = clinical and health-economic evidence and local pricing policies/system

4.   Environment: Understand and participate in shaping local market access /P&R policies, dynamics and systems in place

5.   Negotiation: Prepare well negotiation strategy and implement tactics


“ You always think it’s too early, until it’s too late…”


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Thank you and good luck with the treffle de 4

Ø experience

Ø simplicity

Ø flexibility

Ø speed


AMNOG: Governance clinical added-value orientated


UK: Cost utility, value added drivn


Germany: clinical value driven


France: SMR and ASMR are the basis forreimbursed price approval

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ASMR I.  Major II.  Important III.  Moderate IV.  Minimal V.  No Added benefit

SMR I.  Importante II.  autres


France: more HTA orientated


Value of innovation is mostly underestimated

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Cost of competitive alternative

Economic value to customer of unique benefits

Differentiation

Value

Competitive Reference

Value

Cost offset or HTA based value

Process value: o  New standard of care Product value o  Need: local unmet needs o  Usefulness: efficiency real life o  Quality: improved care

ü  Efficacy ü  Safety ü  Cost-effectiveness ü  Direct therapy costs o  Total direct costs o  Indirect costs (excl. Sweden)

Value of addressing unmet need Value of innovation (static, dynamic)

In the case an innovative drug therapy- what added values are mostly not recognized ?


market access status and trends 2015 jorge wernli ecpm 22 ... · value of health = the deﬁnition...

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