Page 1
AffordabilityIssuesintheUSandGlobally
Cinderella&Inspire2LiveProjectAffordableDrugs
April15,2016
LouGarrison,PhDProfessorandInterimDirector,
Pharmaceu6calOutcomesResearch&PolicyProgramDepartmentofPharmacy
AdjunctProfessor,DepartmentsofGlobalHealthandHealthServices
1
Page 2
ObjecBves
• Providesomebackgroundonstandardeconomicsofpharmaceu6caldevelopment
• Providesomebackgroundonthedisciplineof“pharmacoeconomics”anditsroleinvalueassessmentofmedicines
• Discusssomeissuesraisedby“affordability”
2
Page 5
Whatisa“medicine”fromaneconomicperspecBve?• Oneinputina“healthproduc6onfunc6on”:
– H=H(physicianvisits,hospitalcare,medicines,own6me,OTHER)– “OTHER”—thesocialdeterminantsofpopula6onhealth
• Whataboutan“innova6ve”drug?– Representsnewinforma6onorknowledge.
• Whatisuniqueaboutnewinforma6onorknowledgefromaneconomicperspec6ve?– It’saNOTaprivategood:it’sa“publicgood.”– It’sNOTONLYapublicgood,it’saGLOBALpublicgood.
• Freemarketswilltendtoundersupplypublicgoods(belowwhatis
sociallyop6mal).– Therefore,intervene,buthow?– Patents(intellectualproperty)andsubsidies.
Page 6
Patents(IntellectualProperty)forMedicines
• Statutorypatentlifeis20years.
• Formedicines:– Takes8-12yearstolaunchproduct.– Implies8-12yearsremaininga]erapprovalformarke6ng
• Providesstrong(butlimited)protec6onagainstcompe66on– Genericcopiesareblockedduringpatentlife– Butfollow-oncompe66oniscommon
Page 7
7
DrugDevelopment:Complex,Risky,andCostly
• Onlyabout20-25percentofdrugstestedinhumansmakeittothemarket
• Mostrecentes6mateofcostper
newapprovedmedicineises6matedat$1.5billion(OHE,2012)
Page 8
5,000–10,000 Screened
250 Enter Preclinical
Testing
5 Enter
Clinical Testing
1
Compound Success Rates by Stage
16
14
12
10
8
6
4
2
0
Phase II 100–300 Patient Volunteers Used to Look for Efficacy and Side Effects Phase III
1,000–5,000 Patient Volunteers Used to Monitor Adverse
Reactions to Long-Term Use
FDA Review Approval Additional Post-
Marketing Testing
Phase I 20–80 Healthy Volunteers Used to
Determine Safety and Dosage
Preclinical Testing Laboratory and Animal Testing
Discovery (2–10 Years)
Years
NewProductDiscoveryandDevelopment–ARiskyandExpensiveProposiBon
8 Source: Tufts Center for the Study of Drug Development
Approved by the FDA
Page 9
Source: H. Grabowski, J. Vernon, and J. DiMasi (2002)
Page 10
NewTu\sEsBmate--$2.6Billion
10
“...thecosttodevelopandwinmarke<ngapprovalforanewdrughasincreasedby145%betweenthetwostudyperiods,oratacompoundannualgrowthrateof8.5%.”
Page 11
Source: Berndt et al., 2015
Page 12
Pharmacoeconomics:Whatisit?
AbranchofhealtheconomicsprimarilyconcernedwithidenBfying,measuringandcomparingthecostsandoutcomesofdrugtherapiestothoseofastandardinterven6on
– Goesbeyondtheefficacyandsafetyinforma6onthatiscollectedin
pivotalPhaseIIItrials.– Assessesthe“valueformoney”(cost-effec6veness)ofprojected
outcomesoftherapy.– Assessesoverallbudgetimpactonhealthsystem.– Focuseson(real-world)effecBvenessratherthanefficacy.
12
Page 13
Cost-EffecBvenessAnalysis(CEA)andtheIncrementalCERaBo(ICER)
• CEAinhealthcareisaboutcomparingtwoalterna6ves(1&2):
TheICER=Cost2-Cost1Outcome2-Outcome1
• Costsaremeasuredinmonetaryunits• Outcomescanbemeasuredinavarietyofwaysbutmustbeinthe
sameunitsforeachalterna6ve.
13
Cost per QALY (quality-adjusted life year) is the preferred metric.
Page 14
StandardOutcomesMeasures
• Cost-effec6venessRa6o(ICER)—CostperQALYgained• BudgetImpactAnalysis(BIA)—Changeinspendingper
member• Pa6ent-ReportedOutcomes(PROs)• Affordability—Tobedefined
14
Page 16
Our Mission: To promote health economics and outcomes research excellence to improve decision making for health globally.
Page 17
ISPOR’s Global Constituencies
• Patient Roundtables
• HTA Roundtables
• Health Science Policy Council - Good Practices for Outcomes Research Reports
• Student Faculty Advisory Council
• HTA Council - HTA Roundtables - P&T Roundtables
• Institutional Council - Manufacturers - CRO/Life Science
Researchers &
Academicians
Industry
Regulators &
Assessors
Decision Makers
Patients
ISPOR TFs and SIGs include all stakeholders
Page 18
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Individual Members Regional Chapter Members
ISPOR Global Membership
~20,000
Nearly 20,000 ISPOR Members from 114 countries
Page 19
ISPOR Chapters Worldwide
84 Regional Chapters and 88 Student Chapters
Page 20
Tu\sCEARegistry(hgps://research.tu]s-nemc.org/cear4/)
20
League Table:
Page 22
SelectedTop-Selling
PharmaceuBcalandBiologic
Productsin2004and2013
Source: Garrison, 2014; Do not cite or quote.
Page 23
23Scott Morton-Kyle 2012
Page 27
OECDSpendingonPharmaceuBcalsPerCapita: