Abdulkadir Keskinaslan , MD, MBA, MPH

Assessment, pricing, and reimbursement of new health technologies: Innovative reimbursement models: Examples from health insurance systems in Asia

Abdulkadir Keskinaslan, MD, MBA, MPHInternational Conference for Improving Use of Medicines – ICIUM 2011Antalya,Turkey, November 17, 2011

Striking a Challenging Balance

Continued innovation

Household & system affordability

Appropriate use

Access to new medicines

2 | Innovative Reimbursement Models | Keskinaslan | 17 Nov 2011

In an increasingly cost-sensitive environment, it is becoming more difficult for highly-priced innovative drugs to gain reimbursement

Pharma is now moving towards a value-based pricing system, opting for risk-sharing in an effort to improve equitable access to effective care

Innovative pricing and patient access schemes are arrangements which may be used on an exceptional basis for the acquisition of medicines

The schemes are intended to improve the cost-effectiveness of a medicine and therefore allow HTA bodies to recommend treatments which they would otherwise have deemed not cost-effective

Source: Akehurst,Taiwan HTA Workshop 2010; de Pouvourville, EJHE, 2006

The underlying concept of innovative pricing and patient access schemes is value-based pricing

Risk-Sharing Agreement:

“A contract between two parties who agree to engage in a transaction in which there are uncertainties regardless concerning its final value. Nevertheless, one party, the company,

has sufficient confidence in its claims of either effectiveness or efficiency that it is ready to accept a reward or a penalty depending on the observed performance.”


From “Price Volume” and “Money Back” to Value Based Reimbursement: Non-linear pricing

Size of Patient segment or indication

Weighted Average Price

low

high Price-Volume Agreement assumes that “reimbursement buckets” are filled from left to right

Money-back Guarantee assumes binary outcome: full response or failure

Is it possible to devise a scheme, where all “buckets”! Are filled simultaneously, depending on patient characteristics (e.g. unmet need, risk, benefit)?

S1 S2 S3

P1

P2

P3

Average Price


Pricing models to improve access and affordability

Financial Utilization Models

Outcomes Based Pricing Models

Risk Based Pricing Models

Price volume agreement: e.g. full reimbursement for first 10% of patients, reduced reimbursement for next 20% of patients, no reimburse-ment for all others

Initial 10% of patients

Next 20% of patients

All others

Full response

Partial response

No response

Money back guarantee, e.g. full reimbursement for responders, reduced reimbursement for partial responders, no reimburse-ment for non-responders

High Risk

Moderate risk

Low risk

Reimbursement linked to value and level of risk factors (e.g. based on diagnostic test)

Patient segments Patient segments Patient segments


In 2008 NICE found Lucentis to be cost-effective for wet Age-Related Macular Degeneration (AMD) if a course of treatment did not exceed 14 injections

To ensure full patient access, Novartis agreed to pay for any injections of Lucentis that exceeded the 14 recommended by NICE

• Company covers the costs of additional injections

Results

Patients received effective innovative treatment

Improved cost effectiveness for the NHS

Lucentis became established as effective treatment in the market

Lucentis (ranibizumab) for AMD – UKPer patient, response-assumed, if longer treatment required, drug free of charge

Source: National Institute for Health and Clinical Excellence. Final Guidance: Ranibizumab and pegaptanib for age-related macular degeneration. http://guidance.nice.org.uk/TA155

Financial Utilization Models


http://guidance.nice.org.uk/TA155

Velcade (bortezomib) for multiple myeloma - UKPer patient, response dependent, cash refund

In 2006, Velcade treatment was considered ‘not cost-effective’• costs approx. £3,000 per treatment cycle (£38,000 per QALY).

Johnson & Johnson scheme proposed that treatment would be reimbursed only when effective• Full or partial response - remain on therapy and funded by NHS• minimal or no response - cease treatment and costs refunded to NHS by the

company

ICER with rebate, stopping rule after 4 cycles with partial and full responders continuing therapy: £20,700/QALY• Response assessed after max of 4 treatment cycles and response was measured

by tumor shrinkage - reduction in serum M-protein levels of 50% or more

• 60 day claim period


Source: A Keskinaslan, ISPOR Asia, Thailand September 5-7th, 2010


Actonel (risedronate) for osteoporosis – USPer patient, response dependent, pay for consequence

In 2009 Procter & Gamble and Sanofi-Aventis agreed the scheme with Health Alliance Medical Plans

A risk-sharing agreement where preventative treatment is assessed against unwanted disease outcomes• To pay for bone fractures occurring while the patient is taking Actonel.

• For these patients, any health costs associated with a non-spinal fracture to be covered by the manufacturing companies (estimated to cost between $6,000 and $30,000 per fracture, depending on the fracture location).

Patients qualify if they have no-comorbidity, no prior fractures etc; and have taken Actonel for six out of the nine most recent months

Intention of the scheme:• To reduce potential treatment costs for fracture treatment for patients on Actonel

• To provide an incentive to keep qualified patients on Actonel instead of switching to less-expensive generic alternatives

• To keep Actonel on a lower formulary tier than competition


Source: A Keskinaslan, ISPOR Asia, Thailand September 5-7th, 20108 | Innovative Reimbursement Models | Keskinaslan | 17 Nov 2011

Telbuvidine for chronic hepatitis B treatment - Australiaacceptable ICER across patient segments

Telbuvidine is indicated for the treatment of HBeAg-positive and HBeAg-negative chronic hepatitis B patients who have compensated liver disease, evidence of viral replication and active liver inflammation and who are nucleoside analogue naïve.

Telbuvidine priced at weighted average price across patient subgroups

• priced at a high but acceptable incremental cost effectiveness ratio compared to lamivudine for HBeAg-positive (e-pos) patients

• priced higher than lamivudine for HBeAg-negative patients based on cost-offsets due to reduced resistance rates and thus lower use of more expensive 2nd-line adefovir

Risk Based Pricing Models

Source: http://www.health.gov.au/internet/main/publishing.nsf/Content/pbac-psd-telbivudine-mar08; www.novartis.com.au/DownloadFile.aspx?t=p&f=seb.pdf&dateid


http://www.health.gov.au/internet/main/publishing.nsf/Content/pbac-psd-telbivudine-mar08

The underlying concept of patient access schemes is no different from innovative pricing schemes: value-based pricing

Willingness to Pay BasedPricing Models

Affordability BasedPricing Models

Loyalty Card: e.g. progressive discounted price for members, additional reward for compliant patients (4+1), value added services (free routine tests) for long term compliant patients

Discount for members

Price or free goods reward for compliance

Value added servicesfor compliant patients

Patient Assistance Program, e.g. Patients pay what they can afford, governments or private insurance companies may contribute

Patient segments Patient segments

Full price

Partial price

No price


NOA providing Glivec (imatinib) for CML - Indonesia Affordability based model, shared contribution

Novartis Oncology Access (NOA) designed to bridge the affordability gap in Indonesia

NOA offers patients to pay what they can afford, based on a financial evaluation – to bridge the affordability gap.• Co Pay Model Based on the “Cost of Living Wages” (CoL)

• Patient’s financial resources do not fall under 2 X CoL after purchasing Glivec

• 7 tier scheme determined through assessment made by financial agency; in December, 2010: 305 patients

Multiple Stakeholders involved in setting up the program• Ministry of Health Indonesia

• Indonesian Society of Hematology and Blood Transfusion

• Indonesian Hematology and Internal Medicine Medical Oncology National Working Group

• Indonesian Cancer Foundation, Jakarta Branch

• Financial assessment by PT Survindo Putra Pratama

• Novartis Indonesia

Patient segments

Full price

Partial price

No price



Novartis introducing MUSANDA Program, a patient access & affordability program which enables ophthalmologist to treat a segment of patients that was left with no treatment

Program helps patients with funding gap and creates a financing option for self-pay patients

It helps restoring sight and prevent blinds & visual impairment for AMD/DME patients

Program also offers discounted fees for patients at affiliated clinics and hospitals

3rd party conducts financial assessment to identify eligibility for different level of support

Lucentis (ranibizumab) for AMD – UAE Affordability based model with shared contribution

Patient segments

Patient Purchase

Partial price for all segments



Musanada program designed to help patients with no access

Affordability barrierNo Access

Patients wAMD & DME for MUSANADA program :


Q&A

[email protected]

Examples of Estimated ICER Thresholds

　 Unit Lower boundary Upper boundary

USA QALY US$50,000 US$100,000

Canada QALY US$17,600 US$87,800

Australia LYG US$28,200 US$51,000

UK QALY US$32,000 US$48,000

Thailand QALY ~US$2,000 ~US$8,000

　 Unit Lower boundary Upper boundary

WHO GDP/capita/DALY averted <3

Australia PBAC

GDP/capita/life-year gained

1.26 2.29

UK NICE GDP/capita/QALY 1.4 2.1

ICER = incremental cost-effectiveness ratio; QALY = quality-adjusted life-year; LYG = life-years gained;GDP = gross domestic product; WHO = World Health Organization; DALY = disability adjusted life-years; NICE = National Institute for Clinical Excellence (UK); PBAC = Pharmaceutical Benefits Advisory Committee Value in Health 2004;7:518

If the ICER is within a defined acceptable range (threshold) by the payer/ provider of healthcare, then there is a high likelihood that the treatment could be accepted


Abdulkadir Keskinaslan , MD, MBA, MPH

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