Current Approaches in European Health Care Policy

Current Approaches in European Current Approaches in European Health Care PolicyHealth Care Policy

What models can balance the What models can balance the needs of payors and industry?needs of payors and industry?

Three Waves of Health Three Waves of Health EconomicsEconomics1.1. The The principlesprinciples

The benefits of innovationThe benefits of innovationFrom price comparisons to cost-effectivenessFrom price comparisons to cost-effectiveness

2.2. The ”fourth hurdle”The ”fourth hurdle”HTA and Cost effectiveness as a requirement HTA and Cost effectiveness as a requirement for pricing and reimbursementfor pricing and reimbursement

3.3. Health economics in the market placeHealth economics in the market placeAccountable health economicsAccountable health economics

The first wave –The first wave –establishing the principlesestablishing the principles• Cost-containment a new important goal Cost-containment a new important goal

for health care systems in 1970sfor health care systems in 1970s– OECD international comparative data baseOECD international comparative data base

• Health economics not primarily about cost Health economics not primarily about cost containmentcontainment– Allocation of resources for better healthAllocation of resources for better health– Economic evaluation a method for assessing Economic evaluation a method for assessing

costs and benefits of actions aimed at better costs and benefits of actions aimed at better healthhealth

– Innovation a major factor in health careInnovation a major factor in health care

Benefits of innovationBenefits of innovation• Reduced health care expenditures in other Reduced health care expenditures in other

sectors, for example hospitalisationssectors, for example hospitalisations• Improved productivityImproved productivity

– Reduced indirect costs due to illnessReduced indirect costs due to illness• Improved survivalImproved survival

– Value of lifeValue of life• Improved quality of lifeImproved quality of life

– Quality-adjusted life yearsQuality-adjusted life years

HTA and Market AccessHTA and Market AccessCost-effectiveness as a new Cost-effectiveness as a new criteriacriteria• HTA for medical technologies established HTA for medical technologies established

in the US in the 1970sin the US in the 1970s• First European agency established in First European agency established in

Sweden 1987 (SBU)Sweden 1987 (SBU)– Today agencies in most countriesToday agencies in most countries

• Introduction of the “4th hurdle” for drugsIntroduction of the “4th hurdle” for drugs– Australia 1992Australia 1992– UK, NICE 1999UK, NICE 1999– Sweden, LFN 2002Sweden, LFN 2002

HTA and reimbursement (1)HTA and reimbursement (1)

• Reduce price differences between Reduce price differences between products with similar effectivenessproducts with similar effectiveness– In a dynamic market you expect price In a dynamic market you expect price

differentials which consumers react todifferentials which consumers react to– Payers do not trust the health care providers Payers do not trust the health care providers

to react to price differentials in a rational wayto react to price differentials in a rational way• HTA is used to provide evidence for HTA is used to provide evidence for

clusteringclustering– IQWiG as exampleIQWiG as example

•Statins and insulin analougesStatins and insulin analouges

HTA and reimbursement (2)HTA and reimbursement (2)• For drugs the are “true innovations”, HTA will For drugs the are “true innovations”, HTA will

be used to provide information for be used to provide information for – Cost-effective indications at different levels of Cost-effective indications at different levels of

price at introductionprice at introduction– Reimbursement will be linked to cost-effectivenessReimbursement will be linked to cost-effectiveness

• Follow-up studies for gaining additional Follow-up studies for gaining additional informationinformation– Verification that the right patients are treatedVerification that the right patients are treated– Verification of benefits in clinical practiceVerification of benefits in clinical practice

France: The Transparency France: The Transparency CommissionCommissionASMR: “Amelioration du Service Medical ASMR: “Amelioration du Service Medical Rendu”Rendu”• ASMR IASMR I

– Major therapeutic advanceMajor therapeutic advance• ASMR IIASMR II

– Important improvement in terms of efficacy and/or Important improvement in terms of efficacy and/or safetysafety

• AMSR IIIAMSR III– Modest progress in terms of efficacy and/or safetyModest progress in terms of efficacy and/or safety

• AMSR IVAMSR IV– Minor progress in terms of efficacy and/or safetyMinor progress in terms of efficacy and/or safety

• AMSR VAMSR V– No therapeutic progressNo therapeutic progress

France: Criteria for pricing and France: Criteria for pricing and reimbursementreimbursement• ASMR I-IIASMR I-II

– Reimbursement and free pricing Reimbursement and free pricing •Based on comparison with prices in other “big five”Based on comparison with prices in other “big five”•Answer within 15 daysAnswer within 15 days•Price fixed for 5 yearsPrice fixed for 5 years

• ASMR IIIASMR III– Same as above if sales below 40MEuroSame as above if sales below 40MEuro

• AMSR IV-VAMSR IV-V– Bargaining and reference pricingBargaining and reference pricing

Germany and the Germany and the NetherlandsNetherlands• To be or not be clustered – that is the questionTo be or not be clustered – that is the question

(Hamlet, Prince of Denmark)(Hamlet, Prince of Denmark)– HTA and economic evaluation may influence the HTA and economic evaluation may influence the

decisiondecision• If clusteredIf clustered

– Reference priceReference price• If not clusteredIf not clustered

– Opportunities for premium price based on HTA and Opportunities for premium price based on HTA and economic evaluation economic evaluation

Evidence based re-Evidence based re-imbursementimbursementLFN Review of LFN Review of Anti-ulcer drugs in Anti-ulcer drugs in SwedenSweden• Reimbursement for generic omeprazoleReimbursement for generic omeprazole

– Generic substitution at pharmacyGeneric substitution at pharmacy• Reimbursement for Nexium (patent)Reimbursement for Nexium (patent)

– In erosive GERDIn erosive GERD– For HP eradicationFor HP eradication

• No reimbursement for other products No reimbursement for other products unless they reduce price to that of unless they reduce price to that of generic omeprazolegeneric omeprazole

Impact of HTA and Economic Impact of HTA and Economic Evaluation on Decision Making: Evaluation on Decision Making: Evidence from EUROMETEvidence from EUROMET• EUROMET 2000EUROMET 2000

– Limited knowledge about economic evaluationLimited knowledge about economic evaluation– No evidence on influence on decision makingNo evidence on influence on decision making

• EUROMET 2004EUROMET 2004– Improved knowledge about economic Improved knowledge about economic

evaluationevaluation– Some influence, put the potential greater than Some influence, put the potential greater than

actual useactual use– Main barriers relevance and biasMain barriers relevance and bias

European Comparator report European Comparator report regarding funding and access to regarding funding and access to

oncology drugsoncology drugs

Karolinska Institute (KI)/ Karolinska Institute (KI)/ Stockholm School of Economics Stockholm School of Economics

(SSE), Stockholm Sweden(SSE), Stockholm SwedenNils Wilking Nils Wilking

[email protected]@karolinska.seBengt Jönsson Bengt Jönsson

[email protected]@hhs.se

Christer Svedman MD, PhD, KI.Christer Svedman MD, PhD, KI.Niklas Zethraeus PhD, SSE.Niklas Zethraeus PhD, SSE.

Frank Lichtenberg, Columbia University, New Frank Lichtenberg, Columbia University, New YorkYork

Trastuzumab uptake in selected Trastuzumab uptake in selected European countriesEuropean countries

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All CountriesFranceGermanyItalySpainUnited Kingdom

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All CountriesAustriaBelgiumGreeceIrelandNetherlandsSwitzerland

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All CountriesDenmarkFinlandNorwaySweden

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All CountriesCzech RepublicHungaryPoland

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The third waveThe third waveThe role of health economics in a possible resolutionThe role of health economics in a possible resolution

• Decisions about reimbursement are based on Decisions about reimbursement are based on therapeutic value and cost-effectivenesstherapeutic value and cost-effectiveness

• Price controls should be abolished since price is Price controls should be abolished since price is declared in the reimbursement application and declared in the reimbursement application and included in the cost-effectiveness studyincluded in the cost-effectiveness study

• Resource allocation is directed towards an Resource allocation is directed towards an optimal use of new medicinesoptimal use of new medicines– Provide correct incentives for investments in R&DProvide correct incentives for investments in R&D

The third waveThe third waveConsequences Consequences • Reimbursement will be for defined indicationsReimbursement will be for defined indications• Decisions about reimbursement based on Decisions about reimbursement based on

evidence at launchevidence at launch• Follow-up studies used to reveal the true cost-Follow-up studies used to reveal the true cost-

effectiveness in different indicationseffectiveness in different indications• Industry and other stake holders share Industry and other stake holders share

information needed to assess cost-effectivenessinformation needed to assess cost-effectiveness• This evidence will be used as a basis for clinical This evidence will be used as a basis for clinical

governance governance

The third waveThe third waveAccountable health economics Accountable health economics • Benefits for industryBenefits for industry

– Market access for new medicinesMarket access for new medicines– Pricing related to therapeutic value in actual usePricing related to therapeutic value in actual use– Improved and trustful relation to its customersImproved and trustful relation to its customers– Market based incentives for innovationMarket based incentives for innovation

• Benefits for the costumersBenefits for the costumers– Patients will get access to the best possible therapy within Patients will get access to the best possible therapy within

the general resource constraints that health care systems the general resource constraints that health care systems work withinwork within

– Drugs will take the share of health care expenditures that is Drugs will take the share of health care expenditures that is determined by the cost-effectiveness of new medicinesdetermined by the cost-effectiveness of new medicines

– Third party payers – private as well as public – can show Third party payers – private as well as public – can show their principals that money used are well spenttheir principals that money used are well spent

The third waveThe third waveAccountable health economics Accountable health economics • RisksRisks

– For industryFor industry• Information will be used against the industry?Information will be used against the industry?•Unproven business modelUnproven business model

– For the costumersFor the costumers•Captured by industry?Captured by industry?

• AlternativesAlternatives– More regulation?More regulation?– Less reimbursement?Less reimbursement?

The third wave - SummaryThe third wave - Summary• Information for economic evaluations Information for economic evaluations

will come from actual use of technologywill come from actual use of technology• Shared information between different Shared information between different

stakeholdersstakeholders– Payers, industry,doctors,patientsPayers, industry,doctors,patients

• Innovations will be used to improve the Innovations will be used to improve the quality and efficiency of the health care quality and efficiency of the health care system system

Thanks for your attention!Thanks for your attention!