ihs life sciences risk sharing workshop presentation short
TRANSCRIPT
© 2015 IHS
IHS ECONOMICS & COUNTRY RISK
RISK SHARING AGREEMENTS: LESSONS FROM THE GLOBAL EXPERIENCE
25 FEBRUARY 2015
Milena Izmirlieva Senior Manager, Life Sciences Research Sarika Pundit Strategic Account Director
© 2015 IHS
Agenda • What is risk sharing?
• Types of risk sharing deals
• Evolution of risk sharing
• Country preference for payer partnerships by type
• Game-changers for risk sharing
• The future of risk sharing
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© 2015 IHS
What is risk-sharing?
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• IHS definition (2009):
“an umbrella term for a host of creative pricing or costing initiatives with the goal of securing reimbursement or greater access to the drug. Agreements are put in place between manufacturer and payer to potentially spread the cost of a particular medicine, or treatment regime, by placing conditions that explicitly dictate how much the payer will spend and not spend. Risk-share conditions can significantly vary in nature depending on the drug, its mechanism of action, and the type of disease it is treating, and their implementation can often be indirect.”
• University of Washington's PORPP definition (2008): "agreements between a payer and a pharmaceutical, device, or diagnostic manufacturer
where the price level and/or nature of reimbursement is related to the actual future performance of the product in either the research or 'real world‘ environment rather than the expected future performance"
© 2015 IHS
What is risk-sharing?
• In theory, risk sharing is simply an agreement to share the risks associated with the introduction of a new product to the market.
• In reality, risk sharing means different things to payers and to pharmaceutical companies.
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???
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What is risk-sharing?
• For payers: A way to share the costs.
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I need to share the cost! I have finite resources.
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What is risk-sharing?
• For pharmaceutical companies: A way to secure market access in difficult circumstances.
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I’m running out of options. I want to avoid a worse outcome.
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Brief history of risk sharing
• The first RS agreement, recorded by IHS, was in 2002 and was for Bayer’s MS drug Betaferon (interferon beta) in the UK.
• The 2007 agreement for myeloma drug Velcade (bortezomib) in the UK was a turning point for RS as it set clear performance-based criteria for funding.
• The manufacturer rebates the cost of bortezomib for patients who, after a maximum of 4 cycles of bortezomib, have less than a partial response (measured using serum M protein); treatment is continued only in people who have a complete or partial response (that is, reduction in serum M protein of 50% or more or, where serum M protein is not measurable, an appropriate alternative biochemical measure of response).
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Growth in number of proposed risk sharing agreements
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Source: IHS Life Sciences Risk Sharing Database (excluding 2007-08 New Zealand agreements)
Proposed Risk Shares per Year
0
5
10
15
20
25
30
35
40
45
50
2005 2006 2007 2008 2009 2010 2011 2012 2013
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© 2015 IHS
Types of risk sharing deals
• RS deals are known under different names: Patient Access Schemes (PAS) in the UK; cost sharing agreements in some markets.
• There are several types of risk sharing deals, with discount-based schemes becoming increasingly dominant.
• The most popular types are finance-based schemes and finance-based discounts schemes.
• More than 15 different types of risk-sharing schemes are tracked regularly in the IHS Risk Sharing database.
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© 2015 IHS
Risk sharing subclasses defined
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• Finance-Based: These agreements are conditioned by a set of pre-
specified budget caps, discounts or restrictions that can either be based on a particular patient or on the disease population. These can include price-volume agreements (France), expenditure caps (Australia; United States), price cuts that are attached to forecasted spend (Japan) and conditional discounts (Italy; United Kingdom).
• Outcomes-Based: These agreements are conditioned by a pre-specified endpoint or definition of response that dictate whether the payer will cover the treatment on an ex post facto basis. These can include outcomes guarantees (United Kingdom; United States) and form the traditional model of risk-sharing agreements, as payment is weighted entirely against the performance of the drug.
© 2015 IHS
Risk Sharing Deals by Type
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Source: IHS Life Sciences
Europe has led the way in prevalence of outcomes-based RS
RISK SHARING / FEBRUARY 2015
Countries Name of the medicine (active ingredient) Therapeutic area
Italy
Tarceva (Erlotinib) Sutent (Sunitinib) Nexavar (Sorafenib) Sprycel (Dasatinib) Tasigna
(Nilotinib) Avastin (Bevacizumab) Tyverb (Lapatinib)
Lucentis (Ranibizumab) Macugen (pegaptanib sodium)
Lung cancer Renal cell carcinoma (RCC) Leukaemia Colorectal cancer, Kidney cancer
Breast cancer Ophtalmology
UK Avonex (Interferon beta 1a) Betaferon (Interferon
beta 1b) Copaxone (Glatiramer acetate) Rebif (Interferon beta 1a) Velcade (bortezomib)
Multiple Sclerosis Multiple Myeloma
Germany Aclasta (zoledronic acide) Certican (everolimus)
Sandimmun Optoral (cyclosporin A ) Myfortic (mycophenolate sodium)
Osteoporosis Prophylaxis of organ rejection Rheumatoid Arthritis
Prevention of rejecting kidney transplant
Australia Enbrel (etanercept) Tykerb (lapatinib) Tracleer (based on mortality rate)
Rheumatoid Arthritis Breast cancer
© 2015 IHS
Risk Sharing Deals by Type
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Source: IHS Life Sciences
Notable early outcomes-based RS agreements in the US
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US
Proscar (finasteride), Cialis (vardenafil) Actonel (risedronate), Januvia (sitagliptin) /
Janumet (sitagliptin, merformin), Zocor (simvastatin), Diovan (valsartan) / Diovan
HTC (valsartan hydrochlorothyazide)
Benign Prostatic Hyperplasia Erectile Dysfunction Postmenopausal osteoporosis
Diabetes Cholesterol Blood pressure
© 2015 IHS
Risk Sharing Deals by Class
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Source: IHS Life Sciences Risk Sharing Database
Proposed Risk Sharing Deals by Broad Class (2002-2014)
Finance-based: discountedscheme
Other finance-based
Dose cap
Off-label
Performance-based
Undefined/Unknown
Finance and performancebased
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© 2015 IHS
Risk Sharing Deals by Class
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Source: IHS Life Sciences Risk Sharing Database
Implemented Risk Sharing Deals by Broad Class (2002-2014)
Finance-based: discountedscheme
Other finance-based
Dose cap
Off-label
Performance-based
Undefined/Unknown
Finance and performancebased
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© 2015 IHS
Risk Sharing Deals by Class
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13% of proposed risk sharing deals were not implemented (mainly due to NICE funding rejections in the UK)
Source: IHS Life Sciences Risk Sharing Database
Proposed versus Implemented Risk Sharing Deals by Broad Class (2002-2014)
Finance-based: discountedscheme
Other finance-based
Dose cap
Off-label
Performance-based
Undefined/Unknown
Finance and performancebased
RISK SHARING / FEBRUARY 2015
© 2015 IHS
Risk Sharing Deals: Impact on Reimbursement Outcome
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Source: IHS Life Sciences Risk Sharing Database
NICE Reimbursement Outcome Following PAS Proposal
0 5 10 15 20
2009
2010
2011
NICE Reimbursement Outcome Following PAS
Recommended
Rejected
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© 2015 IHS
Therapeutic Areas at Highest Risk of Risk Sharing Deals
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Source: IHS Life Sciences Risk Sharing Database
Implemented Risk Sharing Deals by Therapeutic Area
0 50 100 150 200 250 300
Total
Oncology
Ophthalmology
Viral (inc Hepatits B & C, HIV), vaccines
Cardiovascular
Anfi-inflammatory and Pain
Orphan Diseases
Respiratory
Other
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© 2015 IHS
Finance-based schemes are gaining popularity
• Finance-based schemes have increased – with various permutations, including discount-based finance schemes
• Performance-based schemes have become somewhat less common – mainly as a result of:
• difficulties in implementation
• new payers engaging in risk sharing deals that are exclusively interested in discounts
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© 2015 IHS
Preference for discounted schemes grows
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Source: IHS Life Sciences Risk Sharing Database
Implemented Risk Sharing Deals by Type 2009 vs 2013
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Performance-based Finance-based Performance-based Finance-based
Undefined Finance and performance based
86% of those were discount-based
50% were discount-based
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New Players engaged in Risk Sharing
• A significant number of new countries are beginning to see risk sharing agreements, including:
• Belgium
• Hungary
• Poland
• Portugal
• South Korea
• Spain
• Interest is widening in emerging markets
• Countries interested in adopting the NICE cost-effectiveness methodology may want to introduced PAS.
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© 2015 IHS
Game-changers for risk sharing deals
• E-prescribing and the move to electronic healthcare records.
• Market entry of expensive new drugs.
• Growing sophistication of payers
• The risk of International Reference Pricing
• Adaptive licensing legislation in the European Union
• Approval under Breakthrough Designation in the US
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© 2015 IHS
Latest developments in risk sharing
• The overuse of conditional reimbursement with expected risk sharing or price cut has been questioned in Poland
• Increased trend for RS deals to be signed at the regional level (e.g., Catalonia) in addition to national agreements in Spain
• Romania and Serbia both intend to use RS as part of cost-containment strategy
• Calls for more productive sharing of risk between companies and the NHS in the UK: “to progressively reflect the value of new treatments as our knowledge of what they can offer to patients increases”
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© 2015 IHS
The Future of Risk Sharing
• Risk sharing agreements are here to stay, but they are a moving target.
• New expensive drugs and the new drug approval initiatives may well reshape the environment and the type of risk sharing payers are willing to engage in going forward.
• Watch this space!
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