Interpreting Cost-Effectiveness Analyses in

the Context of Product Listing Agreements:

NIHB’s Reanalysis of CADTH’s Hepatitis C

Therapeutic Review

Andrew Portolesi, Biostatistician, Non-Insured Health Benefits Program,

First Nations & Inuit Health Branch, Health Canada

CADTH Symposium

Apr 12, 2016

Outline

• Introduction

– The Non-Insured Health Benefits (NIHB) Program

– Chronic hepatitis C infection (CHC)

– CADTH’s Therapeutic Review: Drugs for Chronic Hepatitis C Infection

– Product Listing Agreements (PLAs)

• Problem

– How can CDR/CDEC make cost-effectiveness recommendations when actual (PLA) pricing is confidential?

• Solution

• Considerations

• Worked Example

• Conclusion

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The Non-Insured Health Benefits (NIHB) Program is Health Canada's national, medically necessary health benefit program that provides coverage for benefit claims for a specified range of drugs, dental care, vision care, medical supplies and equipment, short-term crisis intervention mental health counselling and medical transportation for eligible First Nations people and Inuit.

Costs: • NIHB provides benefit coverage to over 824,000 eligible clients • Total benefit expenditures in 2014/15 were $1.03B • Pharmacy expenditures $422M

In order to determine whether or not to cover new medications, NIHB receives recommendations from the Canadian Drug Expert Committee (CDEC, part of the Common Drug Review – CDR – run by the Canadian Agency for Drugs & Technologies in Health – CADTH), the national cost-effectiveness expert review body for public drug plans in Canada and an international leader in cost-effectiveness analysis.

Overview of the NIHB Program

Source: NIHB Annual Report 2014/15

What is hepatitis C?

• Hepatitis C (HCV) infection is a blood-borne disease, often chronic, and can result in severe liver disease, cirrhosis, and cancer

• Chronic Hepatitis C infection (CHC) develops in 74% those that become infected with HCV who fail to naturally clear the virus

• CHC disproportionately high in Aboriginal populations (prevalence of 2-4% vs. 0.6% for the general Canadian population)

• Aboriginal CHC represents 10-20% of CHC in Canada (25,000-50,000 out of 244,000)

• With HC’s approval of the new Direct-Acting Antiviral Agents (DAAs), CHC can now be reliably treated

• Treating all CHC in the entire Canadian CHC population with the new DAAs would cost approx. $15B (1% of GDP)

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Previous Treatments (PegIFN-based) New Treatments (PegIFN-free DAAs)

• Low cure rates

• Severe side effects

• Long treatment (24-48 weeks)

• Require daily injections

• $10K-$40K per treatment

• High cure rates (up to 90%)

• Mild side effects

• Shorter treatment (8-24 weeks)

• Administered orally (pills)

• $45K-$134K per treatment

Sources: PHAC, Product Monographs

1999: Peginterferon/Ribavirin (“PegIFN/RBV” or “PR”)

Injection (PegIFN), low cure rates, bad side effects, long

treatment duration

2011: 1st-generation DAAs (Victrelis & Incivek)

Oral (i.e. tablets/capsules), increased cure rates, similar or

worse side effects since used in combination with

PegIFN/RBV, same treatment duration

2013: 2nd-generation DAAs (Sovaldi & Galexos*)

Oral, same or higher cure rates as 1st-gen, less side effects

since still used in combination with PegIFN/RBV but with a

shorter treatment duration

2014: 3rd-generation DAAs (Harvoni & Holkira Pak**)

Oral, high cure rates, low side effects, no PegIFN (only

sometimes RBV), short treatment duration

2015: Additional treatments (Daklinza & Technivie)

Add-on therapies & products for rarer genotypes

2016: Pan-Genotypic DAAs *Marketed as “Olysio” in the US

**Marketed as “Viekira Pak” in the US

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Treatments for CHC: Timeline

Source: Product Monographs

• CADTH has performed their own independent Therapeutic Review of treatments for Chronic Hepatitis C (CADTH CHC TR):

• Comprised of a clinical review (systematic review & meta-analysis), pharmacoeconomic review (economic modeling) and patient group input of drugs for CHC

• Update of the 2014 Therapeutic Review to include all current evidence for new therapies (i.e. adding Harvoni, Sovaldi, Holkira Pak, Daklinza) and cover all genotypes

• The CADTH CHC TR pools together all available evidence for these new drugs, comparing their effectiveness, safety and cost-effectiveness (using retail pricing)

• Uses the best methodology for Systematic Reviews, Network Meta-Analysis (NMA) and economic modeling for Cost-Utility Analysis (CUA)

• Compared to CDR reviews for individual drugs, which rely on reviewing individual manufacturers’ economic models

• Recommendation report published in Nov 2015

• A gold standard in HTA

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CADTH Therapeutic Review: Drugs for CHC

Source: CADTH TR: Drugs for Chronic Hepatitis C

What are Product Listing Agreements (PLAs)?

• A Product Listing Agreement (PLA) is a negotiated agreement between a drug plan and a drug company that allows the plan to cover a specific drug at a reduced price through the use of a rebate

• PLAs allow drug plans to cover medications that otherwise would not be considered cost-effective or affordable

• NIHB and other federal drug plans have recently joined the pan-Canadian Pharmaceutical Alliance (pCPA), the national initiative for provincial/territorial public drug plans to collectively negotiate PLAs

• Product Listing Agreements (PLAs) have become a de facto tool in the management of public drug plans in Canada

• The result of a PLA is a negotiated net price that is confidential between a drug plan and a drug company (i.e. cannot be disclosed to CADTH)

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Problem

With the actual price each plan pays for a given drug being confidential and

thus unknown (and cannot be disclosed to) to CADTH, the usefulness of the

CDR has ben called into question as its recommendations apply to what may

be entirely different sets of prices. This issue is especially impactful when the

comparator(s) in a review are already under PLAs:

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Retail Price

Retail Price

CDR Confidential

Price

PLA Price*

0

5

10

15

20

25

30

35

40

45

50

0 5 10 15 20 25 30

To

tal C

osts

Effectiveness (Total QALYs)

Current Scenario: CDEC Recommends “List at a Reduced Price”

Retail Price

Retail Price

CDR Confidential

Price

PLA Price*

PLA Price*

0

5

10

15

20

25

30

35

40

45

50

0 5 10 15 20 25 30

To

tal C

osts

Effectiveness (Total QALYs)

Emerging Scenario: Comparator PLA Pricing Unknown to CADTH

02

0 5 10 15 20 25 30

Comparator Intervention Not Cost-Effective Cost-Effective (?)

*PLA pricing unknown to CADTH

No Treatment

PR 48

Holkira Pak 12

Harvoni 12

Victrelis Galexos Incivek

Holkira Pak + RBV 12 Sovaldi + PR 12

Sovaldi 12 + PR RGT

Sovaldi + Galexos 12

Sovaldi + Galexos + RBV 12

Sovaldi + RBV 24

*Harvoni 8

*Daklinza + Sovaldi 12 *Daklinza + Sunvepra 24

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

9.5 10.0 10.5 11.0 11.5 12.0

To

tal

Co

st

Effectiveness (Total QALYs)

Figure: CADTH CHC 2015 TR: Cost-Effectiveness Plane Genotype 1 Treatment-Naïve Non-Cirrhotic (G1TNNC)

Source: CADTH TR: Drugs for Chronic Hepatitis C

Less Effective

More

Costly

More

Effective

Less

Costly

NIHB’s Solution

• For the CADTH CHC Therapeutic Review, following the advice of CADTH

experts, the NIHB Program reanalyzed the cost-effectiveness results by

subtracting the applicable PLA discount for each regimen to determine its

own incremental cost-utility ratios (“Net Price ICUR”), to which it applied

CDEC's decision-making rationale

• This methodology is justified since treatment costs are direct costs which

can be subtracted from the CU tables without re-running the

pharmacoeconomic model as every patient in model receives treatment.

Significant discounts on indirect costs (e.g. drugs to treat significant side-

effects) would require re-running of model

• Applying PLA discount also considered for modeled discontinuation rate

(e.g. CADTH model assumed discontinuing halfway through, so removed

half of discontinuation rate)

• Specific to this Therapeutic Review, NIHB also excluded PegIFN/RBV (PR)

from the cost-effectiveness analysis by considering it dominated by new

treatments by patient values

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NIHB’s Methodology

1. Understand Cost-Utility Analysis (CUA) and CDEC’s use of CUA in this

review (i.e. economic model, ICURs and sensitivity analysis)

2. Extract CUA Tables (Total Costs, Total QALYs, ICURs) used by CDEC

3. Determine plan-specific discount amount for each modeled medication

regimen

4. Reduce discounts according to modeled discontinuation rates (e.g. 5%

discontinuing halfway through = reduce discount by 2.5%)

5. Additional considerations (e.g. removal of non-applicable comparators)

6. Recalculate CUA table to obtain plan-specific cost-effectiveness: the “Net

Price ICUR”

7. Apply CADTH’s decision-making rationale (including sensitivity analysis)

using new ICURs

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Considerations

• Technically, this is a post-hoc analysis, so we have to avoid arbitrary

methodologic decisions

Requirements:

• High-quality HTA

• Reporting of detailed cost-utility tables (Totals Costs & Total QALYs, not

just incremental costs)

• Understanding of pharmacoeconomic model (e.g. how to apply

discontinuation rates)

• Knowledge of ICUR algorithm and CUA in general (but don’t be beholden

to the algorithm)

• Knowledge of CDEC’s decision-making rationale (not just the rationale for

their final decision), including interpretation of sensitivity analysis

• Model where fundamental unit is a patient who received treatment

• Can’t disclose Net Price ICURs to drug companies as that could reveal

competitors’ products’ PLA discounts

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CHC TR: Removing PR as “Dominated by Patient Values”

• Specific to the CADTH CHC TR, CDEC excluded PR from consideration

based on patient values (i.e. with the new DAAs, it’s unethical to consider

recommending treating someone with PR anymore).

• In its reanalysis, NIHB listed PR as “dominated by patient values.” This

“dominated” isn’t the more-costly-less-effective domination in the usual

CUA sense, but dominated in the sense that you’d never recommend PR

when a new DAA is an option (i.e. not using the usual cost & effectiveness

set of values, but using a different set of values: namely, patient values).

Example, table 19 (Genotype 2 Treatment-Naïve Non-Cirrhotic): Treatment Total Cost Total QALYs Sequential ICUR

(70) PR24 $99,904 11.532 reference

(3) SOF12 + RBV12 $143,955 11.749 $203,282

(0) No Treatment $104,904 9.734 dominated by (70)

(40) So12 PR12 $145,731 11.698 dominated by (3)

Treatment Total Cost Total QALYs Sequential ICUR

(0) No Treatment $104,904 9.734 reference

(3) SOF12 + RBV12 $143,955 11.749 $19,380

(70) PR24 $99,904 11.532 dominated by (3) using patient values

(40) So12 PR12 $145,731 11.698 dominated by (3) Cost-Effectiveness Analysis Table 19, adjusted: G2 TN NC using No Treatment as a reference since PR cannot be recommended

Cost-Effectiveness Analysis Table 19: G2 TN NC using PR as a reference

Source: CADTH TR: Drugs for Chronic Hepatitis C

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ICURs by

Subgroup Genotype 1 Genotype 2 Genotype 3 Genotype 4

TN TE TN TE TN TE TN TE

F0 $31,148 $30,154 $31,195 $33,037 $66,549 $69,205 $94,660 $96,056

F1 $25,873 $25,067 $27,522 $27,370 $53,746 $55,946 $77,415 $78,634

F2 $18,227 $17,698 $19,311 $19,209 $38,481 $40,082 $52,880 $53,784

F3 $13,109 $12,749 $13,812 $13,741 $29,179 $30,413 $36,723 $37,410

F4 (Cirrhotic) $17,816 $18,646 $18,542 $18,226 $34,372 $43,292 $35,996 $37,303

F0: No liver damage, F4: Liver cirrhosis, TN: Treatment-Naïve ,TE: Treatment-Experienced (with PegIFN/RBV)

Retail ICURs with PegIFN/RBV removed (CADTH TR, Retail, No PR):

ICURs by

Subgroup Genotype 1 Genotype 2 Genotype 3 Genotype 4

TN TE TN TE TN TE TN TE

F0 $47,066 $30,154 $320,829 $33,037 $247,949 $69,205 $369,661 $96,056

F1 $40,192 $25,067 $276,590 $27,370 $205,679 $55,946 $315,469 $78,634

F2 $29,242 $17,698 $203,052 $19,209 $151,071 $40,082 $227,554 $53,784

F3 $21,332 $12,749 $146,489 $13,741 $115,513 $30,413 $161,766 $37,410 F4 (Cirrhotic) $23,047 $17,669 $58,659 $18,226 $92,117 $43,292 $59,492 $37,303

Incremental Cost-Utility Ratios (ICURs) for new DAAs for CHC (CADTH TR, Retail)

Removing PR and recalculating

ICURs

Recalculation of all ICURs with PR Dominated by Patient

Values

Worked Example (CHC TR with Fictitious Discounts)

• Using Genotype 1 Treatment-Naïve Non-Cirrhotic (Table 15), with fake

discounts:

• Calculation of discount amount is non-trivial: calculate component costs of

each regimen (not shown), then apply discounts according to

discontinuation rates:

• e.g. PR 48w: Net Price = $19,000 x (1 – 0.15 x (1 – 0.173 / 2 ) )

15 Source: CADTH TR: Drugs for Chronic Hepatitis C, with made-up discounts

Harvoni Holkira Pak Sovaldi Galexos Incivek Victrelis RBV PR 21% 13% 20% 12% 14% 20% 11% 15%

Regimen Retail Price Discontinuation Rate Discount Net Price No Treatment $0 0.0% $0 $0

PR 48w $19,000 17.3% -$2,603 $16,397

Victrelis + PR RGT $40,020 21.2% -$6,493 $33,527

Galexos + PR RGT $47,342 7.0% -$5,796 $41,546 Incivek + PR RGT $47,822 9.2% -$6,510 $41,312 Sovaldi + PR 12w $55,000 10.8% -$10,406 $44,594

Holkira Pak 12w $55,860 0.5% -$7,244 $48,616 Sovaldi + Galexos + RBV 12w $58,350 1.8% -$11,266 $47,084

Holkira Pak + RBV 12w $59,210 1.5% -$7,573 $51,637

Sovaldi + PR RGT $65,840 10.6% -$11,957 $53,883

Harvoni 12w $67,000 4.4% -$13,760 $53,240 Sovaldi + Galexos 12w $91,502 3.3% -$15,126 $76,376 Sovaldi + RBV 24w $116,700 5.4% -$22,123 $94,577

Worked Example (CHC TR with Fictitious Discounts)

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Treatment Total Cost Total QALYs Sequential ICUR

No Treatment $104,904 9.734 ref

Holkira Pak 12w $143,379 11.835 $18,313

Harvoni 12w $152,762 11.857 $426,500

PR 48w $114,105 10.839 dominated by pt values

Victrelis + PR RGT $135,218 11.370 ext. dominated

Galexos + PR RGT $136,770 11.449 ext. dominated

Incivek + PR RGT $137,381 11.400 dominated

Holkira Pak + RBV 12w $146,021 11.841 ext. dominated

Sovaldi + PR 12w $146,140 11.651 dominated

Sovaldi + PR RGT $150,969 11.589 dominated

Sovaldi + Galexos 12w $178,356 11.700 dominated

Sovaldi + Galexos + RBV 12w $182,383 11.655 dominated

Sovaldi + RBV 24w $201,979 11.497 dominated

Treatment Total Cost Discount Net total Cost Total QALYs Net Price Sequential ICUR

No Treatment $104,904 $0 $104,904 9.734 ref

Holkira Pak + RBV 12w $146,021 -$7,573 $138,448 11.841 $15,920

Harvoni 12w $152,762 -$13,760 $139,002 11.857 $34,601

PR 48w $114,105 -$2,603 $111,502 10.839 dominated by pt values

Victrelis + PR RGT $135,218 -$6,493 $128,725 11.370 ext. dominated

Incivek + PR RGT $137,381 -$6,510 $130,871 11.400 dominated

Galexos + PR RGT $136,770 -$5,796 $130,974 11.449 ext. dominated

Sovaldi + PR 12w $146,140 -$10,406 $135,734 11.651 ext. dominated

Holkira Pak 12w $143,379 -$7,244 $136,135 11.835 dominated

Sovaldi + PR RGT $150,969 -$11,957 $139,012 11.589 dominated

Sovaldi + Galexos 12w $178,356 -$15,126 $163,230 11.700 dominated

Sovaldi + Galexos + RBV 12w $182,383 -$11,266 $171,117 11.655 dominated

Sovaldi + RBV 24w $201,979 -$22,123 $179,856 11.497 dominated

Source: CADTH TR: Drugs for Chronic Hepatitis C

Treatment Total Cost Total QALYs Sequential ICUR

No Treatment $104,904 9.734 ref

PR 48w $114,105 10.839 $8,353

Holkira Pak 12w $143,379 11.835 $29,534

Harvoni 12w $152,762 11.857 $435,528

Victrelis + PR RGT $135,218 11.370 ext. dominated

Galexos + PR RGT $136,770 11.449 ext. dominated

Incivek + PR RGT $137,381 11.400 dominated

Holkira Pak + RBV 12w $146,021 11.841 ext. dominated

Sovaldi + PR 12w $146,140 11.651 dominated

Sovaldi + PR RGT $150,969 11.589 dominated

Sovaldi + Galexos 12w $178,356 11.700 dominated

Sovaldi + Galexos + RBV 12w $182,383 11.655 dominated

Sovaldi + RBV 24w $201,979 11.497 dominated

PR Dominated by Patient Values: Original CUA Table:

CUA Table with

PLA Discounts:

Conclusion

• NIHB was able to determine its own cost-effectiveness (the “Net Price

ICUR”) under its PLA pricing for the new DAAs for CHC without additional

work by CADTH

• NIHB also demonstrated that several subgroups recommended for listing

by CDEC but not reported as cost-effective are actually cost-effective upon

dominating PegIFN/RBV due to patient values

• While the usefulness of CDR has been called into question in the context

of Product Listing Agreements, with sufficient cost-effectiveness

information supplied by CDEC and an understanding of cost-effectiveness

analysis, public drug plans are able apply CDEC recommendations to their

own pricing context

• By phasing out the CDR Confidential Price (phased out Apr 1, 2016) and

using retail pricing in its reviews, CADTH will continue to be provide

relevant analysis and recommendations to plans in the new management

paradigm of Product Listing Agreements

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