The wider world of Health Technology Assessments SMC – Looking Back, Looking Forward

2008 SMC Conference1

The wider world of Health Technology Assessments

SMC – Looking Back, Looking Forward

Royal College of Physicians of Edinburgh23 September 2008

Prepared by Brian Godman ([email protected])Mario Negri Institute for Pharmacological Research and

University of Liverpool


1. Introduction

2. SMC vs. the world

3. Future considerations

4. Conclusions


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

Reforms will intensify to enhance quality and efficiency to prevent prohibitive tax increases


Projected demographic changes in e.g. Austria 2004 to 2030

Resource pressures will grow in Europe with an ageing population causing increasing concern

Year Age group 0 – 14 Age group 15 to 59 Age group over 60

2004 16.2% 61.9% 21.9% 2015 14.1% 61.3% 24.6% 2030 13.2% 54.7% 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


1. Introduction



4. Conclusions


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


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

This contrasts with Canada, other European countries, and US where there are no formal cost/ QALY cut-off levels


There are no formal economic criteria for new drugs in Austria or France

Austria

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

Country Current decision making criteria

France

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 IMajor improvement (new therapeutic area,

reduction in mortality)

ASMR IISignificant improvement in efficacy, and/or

reduction in side-effects

ASMR IIIModest improvement in efficacy and/ or reduction

in side-effects

ASMR IV Minor improvement

ASMR V No improvement

Ref: Andrieu, Godman et al (re-submitted)


There are no formal cost/ QALY cut-off levels in Canada or Germany. Different in Ireland

Canada (CDR)

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


Germany

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

Ireland (HSE)

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

Sweden

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


UK - England

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

US (MCOs)

Typically managed care organisations in the US place new products on Tier 3 or 4 (highest co-payment) 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:

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

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


The % of submissions accepted or rejected similar between Canada and SMC

SMC Decisions 2006 and 2007

0102030405060

Accepted Accepted -restricted use

Not recommended

Year

% o

f to

tal

2006

2007

Ref: SMC and CDR websites 2008

CDR decisions (Initiation up to April 2007)

0

10

20

30

40

50

60

List/ List in similarmanner

List with restrictions Reject

% T

ota

l


Decisions following re-submissions are similar. Acceptance enhanced by identifying sub-groups

Source: SMC


In Austria limiting the number of new products with substantial benefit helps control costs

Therapeutic benefit for patients

Number of patients treated

Price (acquisition costs) in comparison with listed products

Substantial added Majority

Higher prices based on average EU prices - Pharmacoeconomic study required

Subgroup

Higher prices based on average EU prices - Pharmacoeconomic study required

Added Majority Maximum 10% higherSubgroup Maximum 5% higher

Equal/ similar Lower (minimum 10%)

Ref: Wieninger 2006; Godman, Wieninger et al 2008

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


% Increase in Annual Drug Expenditure

02

46

810

1214

16

1994 1996 1998 2000 2002 2004 2006

Year

% i

ncr

ease

In Austria limiting the number of new products with substantial benefit helps control costs

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

0

20

40

60

80

100

120

1999 2000 2001 2002 2003 2004 2005

Year

% v

ersu

s U

K

France

Germany

The prices of top drugs has also increased in Germany with no formal evaluations. Extending reference classes will help moderate future prices

Ref: UK OFT Report 2007


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

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

Sweden has increased restrictions where concerns – although still problems

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


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

benefitNot evaluated

Pemetrexed (ALIMTA) for metastatic NSCL cancer

Rejected as economic case not

provenNot evaluated

AVASTIN and ERBITUX for metastatic ca colon/

rectum

Rejected as economic case not

provenNot evaluated

Source: SMC and CDR websites

However, SUTENT accepted for second line in GIST patients by CDR (rejected by SMC) and rejected for metastatic renal carcinoma (similar to SMC)


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


1. Introduction



4. Conclusions


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


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

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

Ref: Sikora, Daily Mail 9 Sept 2008


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 re-evaluation 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)

Risk sharing schemes include VELCADE in England and donepezil in Italy

Source: NICE website, Breckenridge and Walley 2008, S Garattini April 2008


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

Risk sharing schemes include VELCADE in England and donepezil in Italy (continued)

Source: Fuschillo et al 2004, Ballelli et al 2005


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

West Midlands HA has pioneered an outcome guarantee scheme building on targets


1. Introduction



4. Conclusions


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!

The wider world of Health Technology Assessments SMC – Looking Back, Looking Forward

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