ACCES AU MEDICAMENT EFFICIENCE ET

CRISE ECONOMIQUE

Marc Czarka, MD, FBCPMCollaborateur Scientifique

Département d’économie de la SantéESP-ULB

AGENDA

1. INTRODUCTION

2. THE FOURTH HURDLE

3. EFFICIENCY AND PHARMACO-ECONOMICS

4. FINANCIAL CRISIS IMPACT ON HEALTHCARE AND MEDICINES

5. CONCLUSION

CHANGING HEALTHCARE ENVIRONMENT

+ Advances in technology

+ Political forces (growing public expectations vs. budget control)

+ Economical forces (competition through innovation)

+ Aging population

= Raising health care expenditures

THE FOURTH HURDLE

• To get a marketing authorization, a drug has to show:– Quality– Safety– Efficacy– (Risk/benefit ratio)

THE FOURTH HURDLE

• Four widely accepted “global principles” governing the planning, funding and provision of healthcare services:– fair access, – efficiency, – responsiveness to society and – innovation.

EFFICIENCY?

HEALTH ECONOMICS

• Health economics is applying economic

principles and economic theories to health

and health care

• Or, the comparative analysis of alternative

courses of action in terms of both costs and

outcomes

PHARMACO-ECONOMICS

• Pharmaco-economics

– Is health economics applied to drugs

– Viewed by pharma as the 4th hurdle to get

the product on the market

– Now requested by authorities all around

the world before granting reimbursement

EFFICIENCY

• The different steps of evidence– Can it work ? = Efficacy (“Efficacité”)

– Does it work in reality ? = Effectiveness (“Effectivité”)

– Is it worth doing it, compared to other things we could do with the same money = Efficiency (“Efficience”)

EFFICIENCY

• Budgets are limited, needs are unlimited 

• Safety, efficacy and quality are not enough anymore

• In a world with scare resources, efficiency becomes important

EFFICIENCY

• So authorities – request pharmaco-economic

evaluation to be added to reimbursement file

– to allocate budgets to interventions that offers most health gain per unit of money

EFFICIENCY“Give us more

evidence that your drug is efficient

and leads to savings in real life”

Allow us first to the market (reimbursed)

and then we will be able to

show real life evidence

The evidence dilemma…

Adapted from Annemans L.

EFFICIENCY

Other dilemma’s• “According to your study, you are

cost-effective. Now, lower your price by 20%, and you will even be more cost-effective”

• “You claim that you can save money elsewhere (hospitals…). But a hospital bed is filled anyway. So, you don’t really save”

WHAT IS THE RELATIONSHIP BETWEEN COSTS AND OUTCOMES?

Is it worth spending that much money ???

Costs

Outcomes

?

ECONOMIC EVALUATION

Costs Outcomes

ECONOMIC EVALUATION

Costs Outcomes

Type of Costs :

• Direct medical costs (hospital, drugs, labs, doctors, …)

• Direct non medical costs (transportation, diet, …)

• Indirect costs (premature death, time lost from work)

• Intangible costs (pain, suffering)

ECONOMIC EVALUATION

Type of outcomes:

• clinical parameters (reduction in blood pressure, normalization of cholesterol level, …)

• morbidity / mortality endpoints (events avoided, survival)

• quality of life improvements

• patient satisfaction or preferences

Costs Outcomes

ECONOMIC EVALUATION

Outcome is

• Longer Life

• Better LifeCosts Outcomes

WHICH YARDSTICK?

• Multiple yardsticks:– Perinatal or neonatal mortality– Life expectancy at birth, later– Disease or handicap free years expectancy– Do the best you can with a certain

percentage of GDP– Contribution to GDP growth

• Alphabet soup of LYG, LOS, NNT, NNH, DALY, QALY…

• Let’s use QALY as an example

QUANTITY AND QUALITY OF LIFE AS OUTCOME

Basic idea underlying the QALY?(Quality-Adjusted Life Years)

• Combination of quality of life and length of life into one measure - a kind of index

• Facilitates comparisons between different kind of treatments and diagnoses

QUANTITY AND QUALITY OF LIFE AS OUTCOME

The concept of the QALY

• If the health state “blind” gives a quality weight of 0.4, then one year as blind gives 0.4 QALY

• …or 0.4 years in full health gives the same number of QALYs (0.4) as 1 year as blind

Adapted from Jonsson B.

New Medical Treatment

LET’S COMPARE

Quantity of Life (Years)

Utility (Weights)

0

1

Existing Medical Treatment

QALY gained, adding life to years

COMPARING COSTS AND CONSEQUENCES

additional costs

additional effects

COMPARING COSTS AND CONSEQUENCES

additional costs

additional effects

Innovative products most often cost more and do more

Innovative products are rarely cost-saving

1%

1%

95%

3%

additional costs

additional effects

IS THIS DRUG COST-EFFECTIVE ?

E

C

D

B

A

Bargain?

Unaffordable?

THRESHOLD RECOMMENDATIONS

Country Threshold/QALY Reference

Australia AUD 42-76,000 George et al

Canada CAD 20-100,000 Laupacis

Netherlands EUR 20,000 Rutten

New Zealand NZD 20,000 Pritchard

UK GBP 30,000 Nice

US USD 50-100,000 Earle

Sweden SEK 500,000 Johannesson

QALYs in Decision-Making: Issues and Prospects

• The use of measures, such as the QALY, relate to social decisions

• An improvement in health outcomes might not be the only reason to use the QALY

• Other reasons are – overall improvement of societal welfare – indicator of society’s care and

compassion. Smith MD, Drummond M, Brixner D. Moving the QALY Forward: Rationale for Change. Value in Health, 2009; 12,S1-4

QALYs in Decision-Making: Issues and Prospects

• In the conventional concept of QALYs, a health state that is more desirable is more valuable.

• Value is equated with preference or desirability.

• A critical question is: desirable to whom, self and/or community?

Weinstein MC, Torrance G, McGuire A. QALYs: The Basics. Value in Health, 2009; 12,S5-9

QALYs :UNDERLYING ASSUMPTIONS

Weinstein MC, Torrance G, McGuire A. QALYs: The Basics. Value in Health, 2009; 12,S5-9

MERITS?

• There are merits in the use of the QALY within the mainstream of decision-making concerned with questions of resource allocation within patient populations

• To conclude, it is important to recognize that, at either pole, we have to make social decisions -implicit, if not explicit- about resource allocation. In my view, the use of cost-utility models that use the QALY can be a pragmatic and necessary tool to improve these complex decisions often made under conditions of considerable uncertainty and bias.

Kind P et al. The Use of QALYs in Clinical and Patient Decision-Making: Issues and Prospects. Value in Health, 2009; 12,S27-30

Garrison LP Jr, Editorial: Using QALYs for Societal Resource Allocation. Value in Health, 2009; 12,S36-37

WELL KNOWN MEDICAL THRESHOLDS

Reference Intervention €/LYG (1999)Lombaert ,1997 Pneumococcal

vaccination 65+ Cost saving

Deltenre, 1997 H pylori eradication in patients with GD ulcer

Cost saving

Beutels et al., 1996 Universal hepatitis B vaccination

500 €/LYG

Lombaert ,1997 Influenza vaccination 65+

1,500 €/LYG

Muls et al., 1994 Secondary prevention of CHD with statins vs. no treatment

9,700-19,700 €/LYG

Annemans, 1998 Primary prevention of CHD with statins vs. no treatment (hi-risk patients)

21,000-26,000 €/LYG

Van Doorslaer, 1994 Hepatitis A vaccination of travelers

27,000 €/LYG

COST PER LYG WITH VARIOUS INTERVENTIONS

Source: J Probstfield, Am J Cardiol 2003: 91 (suppl): 22G – 27G Johannesson et al. N Engl J Med 1997; 336: 332–336; T O Tengs, Risk Analysis 1995: 15, 3, 369-389;

Treatment Cost per LYG (USD)

Smoking cessation - physician counseling

1,300 – 3,900

B-blocker post-MI, high-risk 5,900

Statins (4S) 9,800

AIDS drug cocktails 15,000-20,000

B-blocker post-MI, low-risk 20,200

Driver’s-side air bag 27,000

Kidney dialysis 50,000

COST PER LYG WITH VARIOUS INTERVENTIONS

Treatment Cost per LYG (USD)Annual mammography

for women aged 55-64110,000

Exercise ECG for asymptomatic man

aged 40 years124,000

Cox-2 inhibitors Celebrex or Vioxx for arthritis patients at average risk for ulcers

185,000

Annual helical CT scan of former heavy smokers to detect lung cancer

2,300,000

Source: J Probstfield, Am J Cardiol 2003: 91 (suppl): 22G – 27G Johannesson et al. N Engl J Med 1997; 336: 332–336; T O Tengs, Risk Analysis 1995: 15, 3, 369-389;

SELECTED RISK REGULATIONS AND THEIR COST PER LIFE SAVEDRegulation (year issued) Cost per life saved (USD)

Child-proof lighters (1993) 100,000

Respiratory protection (1998) 100,000

Logging safety rules (1998) 100,000

Electrical safety rules (1990) 100,000

Steering-column standard (1967) 200,000

Hazardous-waste disposal (1998) 1,100,000,000

Hazardous-waste disposal (1994) 2,600,000,000

Drinking-water quality (1992) 19,000,000,000

Formaldehyde exposure (1987) 78,000,000,000

Landfill restrictions (1991) 100,000,000,000

The price of prudence, The Economist, January 22, 2004

£2,329£2,695£2,803£3,369 £3,0175,000

10,000

15,000

20,000

25,000

Year 1 Year 2 Year 3 Year 4 Year 5

Source: Stolk et al, BMJ 2000:320 Time Horizon

Incremental Cost/QALY (GBP)

‘appropriate’ for NHS funding < £25,000

0

VIAGRA CAN BE SHOWN TO BE VERY COST-EFFECTIVE …

£2,329£2,695£2,803£3,369 £3,0175,000

10,000

15,000

20,000

25,000

Year 1 Year 2 Year 3 Year 4 Year 5

Source: Stolk et al, BMJ 2000:320 Time Horizon

Incremental Cost/QALY (GBP)

… BUT WHAT IS THE SOCIAL AND THERAPEUTIC NEED?

‘appropriate’ for NHS funding < £25,000

0

Not Fully Funded

So, is it an efficient drug ?

• Not a Yes / No answer• Depends on many factors :

– compared to what ? – health care system– cost structure– population considered

EFFICIENCY

• Other factors are also important to consider in resource allocation :

– are there alternatives ?

– budget impact ?

– affordability ?

EFFICIENCY

PHARMACO-ECONOMIC EVALUATION

• A tool for efficient resource allocation– Value for money

• Does not replace decision making• Other goals also important

CRISIS IMPACT ON HEALTHCARE

• The drivers of the sector are relatively independent of the wider economy :– prevalence of the disease– unmet medical needs– population growth and aging population

• Demand – continues to grow over time and – is relatively inelastic compared to demand of other goods

like cars, holidays…

• However, tougher economic conditions will have an impact on society’s ability and willingness to pay

• Hence, impact will be a collateral damage

The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

PRESSURE FACTORS

• As GDP growth slows, consumer spending will fall and unemployment will rise, leading to– decrease in tax revenues– increase in demand on social services budgets– significant increase in pressure on public finance

• The cost of various government bailing out the financial sector will

• exacerbate these pressures.• As the gap between growth of health care

expenditures and growth of GDP widens, the specific pressure for cut in health care spending will grow.

The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

PRICE PRESSURE

• Increasing use of generic drugs• Higher rebates in tender business• The Oslo conference « Health in times of

global economic crisis: implications for the WHO European Region (February 2009) »: Get all stakeholders ready to rationalize and do better with less money. More specifically, explore options and implement measures to reduce the cost of medicines and medical devices.

The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

INCREASING REQUIREMENT FOR EVIDENCE

• Health Technology Assessment (HTA) Bodies will assess more rigorously efficiency which will likely lead to more restrictive reimbursement

• Site of Care and Local Payers may require more formal data (« mini HTA ») before paying or covering for a new technology

Increasing Importance of Non Clinicians Stakeholders

CONSUMERS’ BEHAVIOUR

• Consumers themselves may limit their access to treatment

• Patients in the US start skipping doses, cutting pills in half and falling to fill prescription

• The effect are even more apparent where spending is more discretionary in cosmetic-related medicine and surgery for instance.

The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

IMPACT ON HEALTH OUTCOMES?

• Impact on mortality– Russian Federation in the early 1990s : major

increase in adult male mortality– Thailand 1996-1999 : increase in adult mortality

• No Impact on mortality– Data from the US and Europe show that recession

have been accompanied by falling mortality rate• reduction of smoking• Reduction in alcohol use• more time available for child care

The Financial Crisis and Global Health WHO – 21 January 2009 Report of a high-level Consultation

CONCLUSION

• Substantial uncertainty still exist but some fundamental drivers will remain :– Industry’s innovative drive– Demographic shock– Downward pressure on prices and more

restrictive reimbursement decisions :• Cost-containment measures• Cost-utility evaluations