how to use cea to set the prices of new health ... · 10/24/2013 · how to use cea to set the...

How to use CEA to set the prices of new health technologies : France’s cultural revolution`

HTA SymposiumUnivertisy of Tokyo, Oct 24, 2013

227/10/2013 Titre de la présentation 2227/10/2013 2

OUTLINE OF PRESENTATION

●The process

• Registration

• Access to reimbursement

• Setting the price

• The role of pharmacoeconomics

●Pharmaco-economics

• Guidelines

• Implementation

327/10/2013 Titre de la présentation

OVERULING PRINCIPLES

● France has a universal coverage for health care expenditures through the National Sickness Fund;

● The fundamental Social Security Regulation states that all French insuree should be entitled to access to all therapeutic innovation that has demonstrated a positive benefit/risk ratio. However, drugs which have not shown a benefit as compared to existing treatments should not cost more to the National Sickness Fund.

● For these reasons, as we shall see, clinical assessment is central in deciding on reimbursement, and relative effectiveness central to price setting.

● Recently, pharmaco-economics have been introduced, not to decide on coverage, but as a complementary decision tool to set prices.


427/10/2013 Titre de la présentation 4

1. THE PROCESS


PROCESS DIAGRAM

EMAANSM HAS

Registration Assessment

SMRASMRCEA

TransparencyCommission

EconomicCommission

Ministry Of Health

National SicknessFund

Pricing Committee

Rate of coverage

Reimbursement

Pricing

EMA: European Medicine AgencyANSM: Agence Nationale de Sécurité des MédicamentsHAS: Haute Autorité de SantéTransparency Commision (CT): Clinical assessmentEconomic Commission (CEESP): Economic AssessmentCEPS: Pricing committee


1.1 REGISTRATION


MARKETING AUTHORIZATION

● One main track for innovative products:

-The European Medicine Agency (EMA);-Registration is mandatory for all biotech products, or using innovative technologies

(eg nano technologies), but companies may ask for a European registration if they can demonstrate therapeutic innovativeness;

-In practice, it is the interest of companies to go trhough EMA, since it grants immediate registration in the European Union;

- In 2010, overall average time for registration was 281 days

● The European Public Assessment Report (EPAR) must be transferred in the French regulation by the French Medicine Agency, the ANSM.Translation in French Official publication by ANSM.


1.2 ACCESS TO REIMBURSEMENT


● Since 2004, an independant agency, the HAS (Haute Autorité de Santé or Higher Health Authority), has been given the mandate to advise the government on the basis of scientific expertise on the following issues.

● 5 missions:-To assess and priorize the value added by medical innovations-To elaborate recommendations in terms of disease management-To advise the government and the sickness funds on reimbursement issues:

- For drugs, medical devices, medical and diagnostic procedures-To promote the diffusion of good practice guidelines and information to the public-To monitor the accreditation process

9

THE INSTITUTIONS (Backup Info)


THE HAS (Backup info)

● This authority is governed by a « College » composed of 8 members, appointed for 6 years by the President of the Republic, the President of the Parliament, The President of the Senate and the President of The Economic and Social Council.

● The Chairman is assisted by a Director General, appointed by the Minister of Health.

● 2011 budget: 67,3 M€91% from national budget6.1 % fees from industry

● Overall staff in 2011:

410 permanent staff3,000 experts


THE HAS STRUCTURE

● The HAS covers the activities of eight commissions, 3 of which deal specifically with admission to reimbursement:- The Transparency Commission, for drugs (CT)- The Commission for medical devices and health technologies (CNEDIMTS)The Commission for Economics and Public Health Evaluation (CEESP)

● The Commissions are supported by a permanent staff of about 100, forming the Department for Medical, Economic and Public Health Evaluation (DEMESP).


THE TRANSPARENCY COMMISSION

● 26 voting members selected for their known expertise: clinical, pharmacological, methodological, epidemiology:20 members + 6 subsitutes

● 8 consultative members representing depertements of the Ministry of Health, the sickness fund and one representative of the pharma industry

● They hold bi-monthly one day session; ● The results of deliberations are accessible on line, but not the

verbatim;● The final assessement is public and accessible online, in French

and English (only since a few years).


THE PROCESS (1)

● The Commission assesses all new drugs for each of its indications;

● The Commission reviews all drugs every five years;

● The Commission may decide to reassess a drug if new clinical information is available on benefits or risks;

● It may also decide to reassess a whole class;

● Average overall estimated cost per dossier: 15,000 € (2009); average workload: 1,000 dossiers per year, 25% being new drugs or new indications (Other: reassessments, generics, class assessments)


THE PROCESS (2)

● The Commission is supported by the permanent staff of the HAS (the Direction for Medical, Economic and Public Health Evaluation);

● A Chief of Project of this departement is appointed for each dossier, and will prepare a report to be examined during a plenary session of the Commission;

● External experts can also be appointed if required for a specific expertise, may present their conclusions to the Commission but do not participate to the debates and deliberations;

● The Chairman of the Commission may also proceed to a hearing aof a patients’advocacy group;

● Final advice is voted at the majority rule (requirement of at leas the quorum of 12 members).


THE FINAL ADVICE

● The Commission must deliberate on the following points: Should the drug be covered by the National Sickness Fund (SMR) and at what rate? What relative improvement does the drug bring compared to existing treatments?

(ASMR)How should the drug be used in current practice in France? What is the size of the target population, id est the number of potential eligible

patients in France? What complementary data should the company eventually provide with in the

perspective of reassessment? (coverage with evidence, post-launch studies, etc.)

● The Commission will not take into account any economic data● Advices are given for each indication of a given drug● Final advice process must not exceed 90 days!


REIMBURSEMENT: THE SMR

● SMR: Service Médical Rendu, or Medical Service Provided● The SMR assessment leads to the recommandation of

reimbursement;● This assessment comprises two main dimensions:

-A clinical assessment of the benefit/risk ratio of a drug (individual benefit for patients) - A so-called « public health impact » (ISP) assessment which questions whether or not an innovation will contribute to a collective benefit to society

● The SMR advice also comprises a recommendation as to the level of coverage by the sickness fund: An effective drug for a minor ailment of a symptomatic treatment will lead to a higher

copayment for insurees. - Exemple of dermatologic products.

● The Commission may refuse coverage to a drug which has passed through registration at the European level, thus eventually challenging the EPAR.


EXAMPLE OF REJECTION (Backup info)

● Erlotinib in metastatic pancreatic cancer● EPAR:

In pancreatic cancer Tarceva in combination with gemcitabine has been studied in 569 patients with pancreatic cancer that was advanced, unresectable (unable to be removed by surgery) or metastatic.

In the study in metastatic pancreatic cancer, the patients taking Tarceva as initial therapy survived without their disease getting worse for an average of 5.9 months, compared with 5.1 months in those taking placebo. However, there was no advantage for patients whose cancer had not spread beyond the pancreas. No survival advantage could be shown for patients with locally advanced disease

In studies, the most common side effects with Tarceva when used as monotherapy for lung cancer were rash (seen in 75 % of patients), diarrhoea (seen in 54 % of patients) and loss of appetite (seen in 52 % of patients). In the study of Tarceva used in combination with gemcitabine for pancreatic cancer, the most common side effects were fatigue (seen in 73 % of patients), rash (seen in 69 % of patients) and diarrhoea (seen in 48 % of patients).

Tarceva in combination with gemcitabine is indicated for the treatment of patients with metastatic pancreatic cancer..

The CHMP decided that Tarceva’s benefits are greater than its risks and recommended that it be given marketing authorisation.


TRANSPARENCY ADVICE (Backup info)

● A review of the study results shows that the Tarceva + gemcitabine combination is not expected to have any impact in terms of a reduction in morbidity and mortality compared to gemcitabine monotherapy. It only had a marginal effect on survival in the clinical study with no improvement in quality of life and it is not clear if these results can be extrapolated to clinical practice. Moreover, the possibility of a negative impact on quality of life cannot be ruled out in a real-life setting in particular because of the high incidence of diarrhoea in the treated population. Consequently, Tarceva used in combination with gemcitabine is not expected to benefit public health in this indication. The actual benefit of this medicinal product is insufficient in view of the available clinical data: results obtained by an exploratory subgroup analysis which showed a 26-day gain in median overall survival in favour of the Tarceva – gemcitabine combination vs gemcitabine alone with no improvement in patient quality of life and an increase in the incidence of diarrhoea and skin reactions with Tarceva – gemcitabin


FIVE LEVELS OF SMR

SMR Levels

Major ValueImportant Value Moderate Value Low value Insufficient value


LEVEL OF COVERAGE ACCORDING TO SMR

● Major value: 100 % coverage• Reserved to what is called exception drugs, which target specfic populations and

require specific precautions for prescription

● Important value: 65% coverage• The most frequent level of coverage

● Moderate value: 30% coverage

● Low value: 15%

● Insufficient value: Not covered


OUTCOMES (2011)

SMR-2011

0

80,9%

8,1%4,2%

6,8%

0

70,8%

12,5%

4,2%

12,5%

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

Major Important Moderate Low Insufficient

New inscriptionsNew indication

236 new inscriptions, 24 new indications.


ASSESSMENT OF THE RELATIVE VALUE

● ASMR: Amélioration du Service Médical Rendu, or Improvement of the Medical Service Provided;- Comparative analysis versus active existing treatments: Relative Effectiveness

● The assessment is based on: The so-called « quantity of effect »: the absolute difference of effect on outcomeThe relevance of outcomes:

- Mortality>Morbidity>Surrogate EndpointsThe severity of the disease; « Unmet need »:

- Absence of alternative treatments- Or absence of alternatives with a perceived clinical efficacy


THE ASMR

ASMR I – major therapeutic advance

ASMR II – important improvement in terms of efficacy and/or safety

ASMR III – modest progress in terms of efficacy and/or safety

ASMR IV – minor progress in terms of efficacy and/or usefulness

ASMR V – no therapeutic progress


GENERAL RULES

● An ASMR is given for a drug and for each of its indications:A product may then have several ASMRs.

● The ASMR measures the relative effectiveness versus existing therapies.

● If the clinical do not include an active comparator, or the right comprator in the French context, it weakens the dossier: Indirect compraisons are considered with caution, and must follow specific guidelines writtent by the HAS.

● If a drug comes second or third in a given indication, within a period of three years, it may share the ASMR of the first in class if it has equivalent results.

● Beyond three years, it is assessed relative to first comers, and thus can have a more pejorative ASMR, which will have an impact on price.


OUTCOMES

ASMR-2011

0,5% 0,0% 0,5%

6,6%

92,5%

0,0% 0,0%5,3%

31,6%

63,2%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

90,0%

100,0%

I II III IV V

New inscriptionsNew indication

213 new inscriptions, 19 new indications


OTHER COMPLEMENTARY OUTCOMES

● The advice makes a recommendation about how the product should be used…

● Which allows to provide with an estimation of the target population, id est the number of patients potentially eligible to the new therapy.

● The advice often includes a requirement for a post-launch study to be performed; this requirement will be checked for by the Pricing Committee, who will include it in the final price contract.


DECISION

● Companies can appeal to a first version of the advice, and have eigth days to present their arguments;

● They can ask for a hearing but the final advice is definitive; ● The advice is sent to the Ministry of Health and to the Sickness

Fund:

• The Ministry of Health decides on reimbursement• The Pricing Committee for Pricing • The Sickness Fund decides on the level of coverage.


1.3 PRICE SETTING


THE CEPS

● The CEPS: Interministerial committeeMembers of the three major departments of the Ministry of HealthA representative of the Ministry of BudgetA representative of the Department for Industrial Policy of the Ministry of FinanceA representative of the the Departement for Anti-competitive practices and fraud of

the Ministry of FinanceRepresentatives from the National Sickness Fund and Complementary Insurance.Two sections: one for drugs, one for medical devicesFor drugs: 26 members

• The CEPS meets twice a month, and proceeds to an analysis of the advices of the Transparency Commission.

• The CEPS can rely on resources from staff of the Ministry of Health and from the National Sickness Fund, but no permanent staff beyond members.


PRINCIPLES

● Pricing rules are set within a quadriennal agreement signed between the French Government (CEPS) and the pharma industry association (LEEM).

● This agreement sets the rule for branded and generic drugs.

● The agreement also states that the companies must provide the government with regular updated information on their sales level per drug, in France and in the four other major European markets (UK, Germany, Italy, Spain), as well as pricing information in these countries.


PRICING RULES

● Four categories of products:1. Rx drugs which will be delivered in retail pharmacists: price set by the pricing

committee2. When the same Rx drugs as (1) are prescribed and delivered in hospitals, the

hospitals are free to negotiate the prices with the industry through competitive tenders. Cost covered by the DRG tariff.

3. Some drugs will be available only in hospital pharmacies, although they can be prescribed and delivered in an outpatient setting: price is set by the CEPS.

4. Expensive hospital drugs (for exemple biologics for cancer) which are delivered only in a hospital setting, but reimbursed 100% to the hospital outside the DRG tariff: price set by the CEPS, and hospitals have to comply to prescription guidelines.


FOCUSSING ON CATEGORIES 1 AND 4.

● According to the agreement (convention cadre):Companies can set their price for drugs/indications which were granted an ASMR I to III, and

eventually IV if they can demonstrate that at thet price they are cost-saving. The price claim must not be above prices obtained in UK, Germany, Spain and Italy. The CEPS has 15 days to react.

• For an ASMR IV, there must be a price negotiation, which will include a price-volume agreement; a small premium is possible, if and only if companies accept to pay discounts and/or to face price reductions through time, to converge to the prices of other comparable treatments (principle of price convergence per class)

• For an ASMR V, the price must be at least 5% lower then the average price of alternative treatments.

• The delay for the publication of a price should in principle not exceed 90 days, according to European regulations. Present average duration is close to 135 days, but is much faster for drugs with ASMR I to III.


PRICE AGREEMENTS

● Companies systematically sign a price agreement for each product, which commits them for a period of 3 to 5 years.

● The agreement will include either discounts or scheduled price reductions according to sales volumes in each indication; comparisons of sales with the other major European markets are used to assess whether or not the compny is achievig excess sales in France.

● The agreement will also eventually include requirements for the company to perform post-launch studies, at the reqquest of the Transparency Commission or the CEPS itself.

● Financial penalties are included if the company does not perform these studies. Agreements are kept confidential.


DYNAMIC PRICING

● At the time of launch, the renewed agreement between the French Government and the LEEM, the pharma trade union, has maintained the principle of European prices for « innovative » drugs (ASMR 1 to 3);

● But…. (see later slides on the role of CEA in pricing).

● Post-launch dynamic pricing policy: - The « price convergence policy »: in classes with high generic supply, prices of branded AND generics are aligned on the lowest price. - The « price coherence policy »: in classes with branded drugs with « equivalent » efficacy, prices will be aligned to the cheapest. - International referencing: the CEPS will systematically compare French proces with prices on the other Big Four markets for realignment.

- And the usual unilateral price cuts, price/volume discounts, etc.



MANAGING DIFFERENTIAL PRICING PER INDICATION (backup info)

● Since a given drug may have different ASMRs for different indications, how does the CEPS manage value differential per indications?

● The pragmatic way to deal with this issue is to reajust price-volume agreements, based on the size of observed number of treated patients per indications;

● The result is in some sort a net price weighted by the sizr of the market for each indication and its ASMR.


PERFORMANCE BASED PRICE AGREEMENTS

● Do French authorities favor or accept price agreements based on performance of the drug in real life? Or, more generally, do they accept conditional coverage with evidence development?

● It must be observed that in many cases, companies have to provide post-launch evidence which will be used at the time of reassessment, five years afet the first inscription on reimbursement list.

● Such requirements are seldom linked to the demonstration of a given level of performance, for example a pre-determined acceptable difference between clinical trial results and effectivenes/safety observed in real life. The philosophy of such agreements is: « watch and then talk ».

● In general, the CEPS prefers to negotiate a price discount agreement.


EXAMPLES OF EXCEPTIONS (Backup info)

● DPP4 inhibitors for patients with T2 diabetes: DPP4 inhibitors were a new class. Most of them have claimed reimbursement as an

alternative to sulfamides in association with metformin, when first-line metformin has failed. They have not demonstrated better efficacy for glycemic control, but they provide a better tolerance profile. There are also experimental data to suggest that their efficacy to lower HbA1C lasts longer, delaying treatment escalation. At the first round of negotiation, the CEPS was ready to offer only a small premium price over existing alternatives for dual therapy. The manufacturers were able to convince the CEPS to to demonstrate their claim on durability. They were able to obtain a better price than expected, but with the condition that if the study did not support their claim, they would have to pay back the difference between the agreed-upon price and the initial price retrospectively for all sales. All new DPP4 inhibitors have been subject to the same agreement.


PRICE CAPS (Backup info)

● The CEPS has introduced the concept of a price cap, specifically for orphan drugs.

● In this case, if the annual cost of treatment exceeds € 50,000 per patient, the CEPS allows itself to cap volumes and sales.

● Any excess sales beyond this cap has to be covered by companies.

● This rule may extend to niche indications for cancer drugs.


1.4 THE INTRODUCTION OF COST-EFFECTIVENESS ANALYSIS


A NEW GAME

● Cost-effectiveness is now requested at time of launch and at reassessment for drugs with an ASMR claim of I to III and with a significiant budget impact (tbd)

● Should be assessed in parallel with the CT advice by the CEESP;● Should follow published HAS guidelines● Cost Utility Analysis(cost per QALY) preferred if QoL is the major

issue (EQ-5D, HUI 3)● Will be used by the Pricing Committee as an element to discuss

prices;● No threshold, but benchmarking (most probably) according to ASMR

level.● Timing: Jan 2014


PROCESS

● The Commission for Economic and Public Health Evaluation will be in charge of assessing reports presented by companies.

● It will do so in the same time frame as the Transparency Commission.

● It will not perform independant studies alongside.

● Its advices will be public.

● It is expected that they should give three types of conclusions: On the internal and external validity of studies presented by companies;On the level of efficiency demonstrated by the study, as well as on remaining

uncertainties. On the relative efficiency of treatment for specific sub-groupes of patients.


PROCESS

● Cost-effectiveness analysis will also be required at the time of reassessment.

● Companies need to prepare to perform so-called « real life data » cost-effectiveness analysis at the time of reassessment.


2. COST-EFFECTIVENESS AT THE HAS


THE CEESP

● Chaired by a health economist, Professor Lise Rochaix

● 33 members:12 economists7 epidemiologists/public health/methodology9 clinicians/health care professionals4 social scientists1 representative of patients association

• Previous Mandate:

Perform full HTA reports for all health care interventions (25 written reports)• New Mandate:

Assess the cost-effectiveness analysis provided by companies under the new regulation.

• Support staff: from HAS, Direction for Medical, Economic and Public Health Evaluation


GUIDELINES

● Guidelines have been published in October 2011:Choices of methods for Economic Evaluationhttp://www.has-sante.fr/portail/upload/docs/application/pdf/2012-

10/choices_in_methods_for_economic_evaluation.pdf

● 20 recommendations: - Companies have to justify why eventually they could not comply fully to guidelines.


MAIN RECOMMENDATIONS (Backup info)

● The dossiers should cover the following dimensions:-“Efficacy, quality, safety, the organization and the costs of prevention and care, as

well as their public health benefits, the quality of life of patient, the contribution to equal access to prevention and care and the compliance to ethical principles”.

● Cost-utility and cost-effectiveness studies should be the reference. By cost-utility, the guide refers explicitly to calculations of cost per QALY ratios; cost-effectiveness refers here to cost per life years saved. Cost-utility is the reference method when the impact of a new intervention on health related quality of life is a key outcome; if not, then impact on longevity should be considered.

● Studies should adopt a broad societal perspective, inclusive of all actors involved in the intervention. Either because they contribute or are impacted by it, or because they fund it. The target population is defined as all patients who directly benefit from the intervention, or other individuals whose health may be affected by the intervention.


(followed)

● Costs to be considered should be production costs, either medical or non medical, borne by the stakeholders identified in the perspective, as opposed to transfer costs, like sick leave compensations, or indirect costs, like the burden of the disease for informal caregivers and productivity losses. All relevant service providers should be included, whether or not their services are covered by the National Sickness Fund. Direct production costs may include time spent by patients when receiving care (hospital stay, time to visit doctors, transportation,) and by caregivers, formal or informal.

● Indirect costs can be included in a complementary analysis,and cover potential consequences of an intervention of the usual activity of patients and informal caregivers, be it professional, domestic or leisure, but excluding the time spent by the patient when receiving care.


MAIN CHARACTERISSTICS OF THE FRENCH MODEL

● Long tradition of price negotiation in France

● A model based on a contractual long term relationship with companies, with the aim of

- Paying for innovation - Controlling for expenditures- Offering braod access to patients

● Cost-effectiveness not used to decide on reimbursement (coverage) but to complement the discussion on prices, contrary to NICE.

● No threshold is identified.

how to use cea to set the prices of new health ... · 10/24/2013 · how to use cea to set the...

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