Oncologists critizise cancer drug pricing in the US

Dear All,

a recent paper in Blood sharply criticizes the pharmaceutical industry for the prices of cancer (CML) drugs. I am a little surprised that they have started to hinge the debate so much on Gleevec maker Novartis Oncology. Among all the newer cancer drugs that is certainly not at all an example of over pricing, considering the tremendous benefits that this drug has brought to CML patients. Its pricing, especially compared to other cancer drugs nowadays was actually rather modest. In addition, in Europe (already in some markets) and the US it is available off patent soon. (Net) Price increases have certainly not happened in Europe and the cited US increase surprises me as well as we know net pricing is a different story. Anyhow, they do have a point however on other occasions and it is therefore important to move away from the price per pill concept and discuss and establish innovative pricing models that meet the interest of all stakeholders involved, especially those that are linking the financials closer to the actual benefits delivered over time.

Cheers
Ulf

NICE to run VBP in the UK

Dear All,

now its out - NICE is broadening its role and will take on additional responsibilities as part of the VBP system in 2014.

Some links on the matter:

http://www.pharmafield.co.uk/Pf-Fox-News/NHS/2013/03/NICE-will-have-key-role-in-value-based-pricing

http://www.pmlive.com/pharma_news/nice_will_take_central_role_in_uks_value-based_pricing_system_468733

http://www.pharmatimes.com/Article/13-03-22/NICE_given_central_role_in_VBP_scheme.aspx

Cheers
Ulf

The UK NHS struggles to implement VBP

Dear All,

an interesting article from the Financial Times elaborating on the issues around VBP. It doesn't surprise me at all that they find it difficult to implement such a system. Indeed the danger is that VBP becomes a buzzword if things are left unclear and do not progress well. Interesting to see the German system is being eyed on, it does make more sense to move towards some sort of "negotiation based approach" relying on multiple criteria after a clinical appraisal rather than trying to square the circle with some sort of modified QALY threshold system. About two years ago I brought some of the top academics together to think about what a VBP could look like and I remember how difficult it was to get a bunch of real experts on pricing matters to agree on something that can be made operational. In the end of the day it maybe not so different with some form of price/profit control a la the PPRS plus some sort of system that expands on the cost/QALY threshold a little. Interesting for sure how this will unfold further.

Cheers
Ulf 

Spanish Ministry warns of excessive pricing of cancer drugs

Dear All,

in a recent newsletter BCN health outlined that the Spanish Ministry is getting increasingly wary of too high prices on cancer drugs. They have stated that if the products fail to demonstrate cost-effectiveness they will not be funded by the NHS. Various drugs are stuck in the Spanish Ministries' pricing commission.
Indeed I also saw a lot of articles recently on the new pricing system to be implemented. Some lawyers talk about the need of an "entire new house" for the system of drug price setting in Spain. Clearly the involvement of more economic analysis in terms of cost effectiveness and budget impact will be part of it. I believe reference pricing will also play an import role coupled with more risk sharing that we see emerging in certain communities. The bigger pricing threads comes from those who like to introduce more centralized tender purchasing.

There are no signs of recovery of the Spanish economy hence serious pricing pressures will continue throughout 2013 and beyond.

Cheers
Ulf

Recordings eyeforpharma AMNOG webinar

Dear All,

just got the word from eyeforpharma that the webinar on how to overcome the AMNOG hurdles to achieve access in Germany’s market was a great success last week. They’ve just finished putting together the recordings for you. 

Over 400 people listened to the payer panel as Dr. Mathias Flume, Physicians Association, Westphalia-Lippe, Dr Detlev Parow, Statutory Health Insurance, DAK Deutsche Angestellten Krankenkasse and Andreas Guhl, Founder, ValueMAxes shared exclusive insights with the audience.

You can check out the recordings here
 
Cheers
Ulf 

HEOR Consultant Basel, Switzerland

Dear All,

this is a current search, please contact Theo (below) if interested.

Cheers

Ulf 

As the Health Economics and Outcomes Research market continues to grow, this global consultancy is seeking an organised and experienced individual to lead teams and work within a stimulating environment as a HEOR Consultant. Based in Switzerland, you will possess a profound knowledge of HEOR and will have experience of working within the pharma and healthcare industry. 

Being part of a fast-growing and highly successful division, you will focus upon delivering tangible business results to clients and business managers across the international pharmaceutical and healthcare industries. You will also be heavily involved in outcomes research, economic analysis and the natural history of a disease, HEOR consultants will work with a diverse mix of clients, typically including the global top 20 pharmaceutical companies. 

Responsibilities: 

- Reviews and analyses client requirements in order to help develop proposals for cost-effective solutions 
- Organises and conducts high quality research for clients with input and review by colleagues 
- Has a thorough knowledge of consulting methodologies and the health care sector 
- Contributes to the development of value dossiers and support material for clients 
- Engagement based responsibilities are assigned and managed by senior consultants, engagement managers or principals 
- Performs outcomes research, health economic analyses or environment analyses to assist in the identification of client issues and the development of client specific solutions 
- Supports systematic review and meta analysis projects 

Qualifications: 

- BA/BSc in science or economics or related discipline essential 
- MSc/MPhil/PhD in economics/health economics health services research or a relevant related area 

Experience: 

- Post-graduate work experience in a related area (such as economics, health economics, statistics, psychology or science) 
- Experience in undertaking economic analysis (in either Pharmaceutical or other Healthcare Industry, Academic Organisation, HTA Group, or Health Services Research). 

Successful candidates will be fluent in English and possess strong business/scientific written. Having strong written and verbal communication skills, they will have the ability to build strong consultative business relationships. Being able to deliver high quality work with strong attention to detail is crucial. An established net work of referrals and contacts is advantageous 

To apply, or for further information, please contact Theo Rowley on +44 (0) 207 440 0679 / t.rowley@proclinical.co.uk. Alternatively, contact him via LinkedIn. 

...this I just saw on the BBC website, made me smile, especially the comment from Dr. Walker - he is definitely right in saying that it didn't need a big study to 'proof' that QALY's have many issues... I suppose researchers may compare to the alternative systems in Germany and France over time..

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Researchers claim NHS drug decisions 'are flawed'

By Jane DreaperNICE decides which drugs are cost effective on the NHSHealth correspondent, BBC News

Continue reading the main story

Related Stories

• Call for quicker drug decisions

The formula used by the NHS to recommend which drugs should be funded is "flawed" and should be scrapped, researchers say.

The European Commission-funded study tested the assumptions of the system used by NICE (the National Institute for Health and Clinical Excellence).

Researchers concluded the watchdog's system failed

to reflect variations in views on illness and disability.

NICE called the study "limited" and said the measure it used was the best.

NICE uses a method called quality-adjusted life years (QALY) for assessing the value of new drug treatments in England and Wales. A similar system is used by the Scottish Medicines Consortium (SMC).

The formula looks at the cost of using a drug for a year and weighs it against how much someone's life can be extended and improved. Generally if a treatment costs more than £20,000-30,000 per QALY, it would not be recommended as cost-effective by NICE.

Continue reading the main story

“Start Quote

"This isn't a scientific way to classify and prioritise the drugs - mathematically, it's totally flawed.”

Ariel BeresniakResearch leader

The European Consortium in Healthcare Outcomes (ECHOUTCOME) researchers will present their findings at a conference in Brussels on Friday.

Their work has already prompted a backlash by UK-based experts, who defended the current system for making decisions.

The researchers analysed a detailed questionnaire with more than 1,300 respondents - including 301 in the UK.

Their findings criticised the QALY system for grading different states of health. The researchers said people varied in their views about the impact of different levels of illness or disability, and in their approach to risk.

They also found that people's willingness to sacrifice remaining years of life in order to have better health varied enormously over different periods of time.

The researchers said 71% of the respondents would prefer to live 15 years in a wheelchair than die after 10 or five years in a wheelchair - but the remaining 29% said they would prefer to die earlier rather than spend 15 years in a wheelchair.

The project leader, Ariel Beresniak, a French doctor and economist who used to work in the drug industry, said: "Important decisions are being made on the basis of QALY, but it produces the wrong results.

"This isn't a scientific way to classify and prioritise the drugs - mathematically, it's flawed.

"We think it is time to open this debate, particularly as some of the newer European countries are trying to organise their health assessment systems and might be considering QALY.

"NICE has made negative recommendations about many major innovative drugs, based only on arbitrary incremental cost per QALY.

"Agencies such as NICE should abandon QALY in favour of other approaches."

Cost-benefit approach

A similar method is used by Canada and Australia for assessing new treatments.

The researchers suggest instead using a cost-benefit approach - such as how many cases of remission a drug can provide, or how many relapses it might prevent.

A NICE representative said: "We need to use a measure that can be applied fairly across all diseases and conditions. The QALY is the best measure anyone has yet devised to enable us to do this.

"It's developing and improving all the time and the criticisms in this rather limited study haven't shaken our confidence in its value to NICE in helping make decisions on the best way to use new and sometimes very expensive drugs and other health technologies."

John Cairns, professor of health economics at the London School of Hygiene and Tropical Medicine and a member of the NICE's appraisal committee for 10 years, said: "QALYs are certainly not perfect and we should be looking for better ways of informing decision making.

"But getting rid of an imperfect system without replacing it with a better one is not the way forward."

Dr Andrew Walker, an economist at the University of Glasgow, with 10 years' experience of reviewing new medicines at the SMC, said: "I am amazed it has taken these authors three years and one million euros to establish what we already know, that QALYs are not perfect.

"Anyone who makes decisions using QALYs and who cannot think of at least three issues with them is not thinking hard enough.

"As an alternative they propose cost per remission in arthritis, but I ask them to tell me how they define remission, how long remission lasts and how much we are willing to pay for one remission.

"If we want to spend more on cancer medicines, it has to come from somewhere. The researchers speak as though there were no budget limits."

Two years of AMNOG experiences in Germany - webinar

Hi everyone,

eyeforpharma have put together an interesting and free webinar with some experts talking about the past two years under the AMNOG process. 

I am posting the registration link for you to join. 

Cheers

Ulf

Pharma job security in 2013

Dear All, just came across this from Luc De Langhe, nice analysis. Merry Christmas Ulf Go to Switzerland  -  Each year some pharma companies move HQs (or at least a part of it) to Switzerland for tax reasons. Even if you lose your job there, you will have plenty of opportunity because this trend will go on for a while. Join a company with a healthy portfolio across all life cycle stages - Your best choice is a company with at least 2 promising compounds in phase 3 for diseases with a high unmet medical need, and with no blockbuster drug approaching its patent cliff. Beware of single-drug companies - Relying on the future sales of one single drug is quite risky in today’s market, with economies that are forced to make tough choices when deciding which new medicines to reimburse. If, however, it is a life-saving drug or one that dramatically increase the QALYs of treated patients vs. the current gold standard, it is worth going for it. Select a company where top management understands what is going on in the market. All too often I hear that good ideas and plans are blocked by marketing executives higher up in the hierarchy who still think pharmaceuticals can be launched the way they did it. Take a job in a function that the pharma industry is currently investing in: business development, licensing, market access, digital marketing, marketing of mature/established brands, emerging markets, etc. Last but not least: equip yourself with the new competencies that pharma companies need in today’s tough business environment. C.E.L.forpharma’s course topics (see below) address those needs and offer a unique opportunity to get face-to-face training by internationally acclaimed experts. You have my very best regards and Season’s greetings – I hope that C.E.L.forpharma may contribute to your success in 2013! Luc Luc De Langhe Co-founder and Managing Director C.E.L.forpharma

A new proposal for the evaluation of orphan drugs?

Dear All,
just read an interesting article: Paying for the Orphan Drug System: break or bend? Is it time for a new evaluation system for payers in Europe to take account of new rare disease treatments?

The authors propose an alternative methodology based on multiple criteria such as rarity, manufacturing complexity, availability of alternatives, disease severity, research undertaken and several others, given that most orphan drugs due to the higher price ranges hardly will meet the traditional cost-effectiveness thresholds imposed by various HTA agencies. Indeed the various countries are having different systems in order to evaluate orphan drugs, for example IQWIG in Germany sees the additional medical benefit as a given for orphan drugs while other authorities have different requirements regarding the need and scope of economic evaluations.  

I think this paper gives some very welcome alternatives as to what assessment criteria to be used. In my view it should ultimately be left with every EU member state, similar to what the authors proposed, to decide which is the best option for their respective healthcare system and assigning the monetary value they would like to place onto an evaluation rather than centralized purchasing procedures as once suggested. Orphan drugs, due to their limited and very specific patient population, are certainly best suited for innovative access agreements linked to real world evidence development in case of uncertainty at launch. 

Cheers
Ulf 

Drug makers discount up to 50% to make it through NICE

Dear All,

just came across an interesting article from Bloomberg on NICE and the discounts offered by manufacturers to pass the cost-effectiveness criterion of the HTA agency in order to get recommended for reimbursement in the UK market.
Of course the confidential discounts offered are nothing new, perhaps the magnitude is surprising to some people not so familiar with the situation. My guess is the higher figures are related to the recent melanoma drugs. In any case I wonder if such articles trigger the desire by some governments of knowing the net prices again, especially those heavily relying on external price referencing.
Interesting also some views from Sir Michael Rawlings on VBP. I am not surprised that he doesn't expect too much difference. There has been a lot of talk about a VBP system, I also have done advisory boards in the past to understand the academic views and theoretical possibilities, but let's face it in order to practically operationalize such a system there are only a limited number of opportunities on the methodological side of things. I guess we are to find out soon what they have come up with.

Cheers
Ulf

2012 Health Economics Blog round up

Dear All,

it is amazing how quickly the time went and we are soon getting to the end of the year, so its time for a brief resume. It certainly has been a busy year in the sector and one with many changes. The economic crisis has hit hard on all parts of the pharmaceutical and biotech industry. Many countries are affected with severe cost containment measures, health policy changes, increased competition through biosimilars and generics as well as by mounting pricing pressures. The recovery does not seem on the horizon so quickly. Especially the CEE Region as well Southern European are going through some very tough times. In Spain, the president of the Catalan company Grifols, Victor Grifols summed up the situation quite drastically in a recent meeting. He stated, before investing in Madrid "I am rather going to Gibraltar... one cannot depend on a central government that fixes prices and than does not pay." There is a lot to be done in Spain to fix the problems in the healthcare system and the latest real decree leaves a lot open to interpretation but it seems the way is paved for more economic evaluations as part of P&R approvals. As always the devil will be in the detail and in Spain in the way that will or can be implemented in practice considering the strong decentralized structures and decision making of the 17 communities.

In 2012 we also have gotten a good flavor of what the IQWIG process in Germany is like. There has been a pricing arbitration but so far little taste of what the outcome of economic evaluations will bring in case of disagreements on the pricing negotiations. France is equally increasing hurdles to market access and also here the train of medico economic evaluations, whatever that will be in practice, has left the station.
I am wondering if someone in the Uk is actually understanding what is going on, a lot of talk about value based pricing and different processes for the assessment of orphan drugs but there seems to be a lot of haze around the issues.

International price referencing also remains a persistent issue, many companies trying to tackle this by improving capabilities and better analytical tools to manage the situation as well as the implementation of risk sharing/market access agreements is expected to continue to increase throughout 2013.

This year has undoubtedly been the year of the term "market access", although I have the feeling the winner of 2013 will be real world evidence (RWE). Indeed more and more stakeholders came to realize that additional real life data needs to be created and that an assessment of a new medicine does not stop at launch but rather seems to begin at that point. Many of the big consulting companies have geared up and dedicated capabilities toward this topic. The most prominent was the announcement of Astra Zeneca at the beginning of the year to partner with IMS on a three year contract of RWE creation. Others are to follow for sure. Optum insight picked up the topic at this years ISPOR conference in Berlin with various presentations on available databases throughout Europe for potential RWE research. Obviously many methodological and technical aspects are to be resolved and the area is still in its infancy but I am convinced that this is an area we will hear much more about. 

I don't now yet exactly how but I cant help the feeling the key to success on this front is the internet and IT. Having managed various observational research studies myself throughout my professional life in the industry I cant help wondering the way we implemented and actually do the data collections is an outmoded way of going about that and with the technology at hand these days we should be able to innovate and do that very different, much more efficient and faster. I think some of the online patient networks that exist, for example for rare diseases (thinking here of sites like www.patientslikeme.com), are going into the right direction and are already somewhat ahead of the curve. They are now employing outcomes research scientists that I suppose will help to overcome some of the potential limitations on the methodological side (e.g. selection bias etc) and to analyze the wealth of data.

I am closing our little review with a big thank you to you, the readers, for the numerous comments, suggestions and interesting discussions on the topics raised. We have grown steadily in 2012 again, something I am very happy about as the posting was a little slower due to the work load this year. Maybe I get a round in 2013 to brush up the blog a little in terms of layout and functionality and maybe add some sections but I do not want to over promise ;)

Last but not least a little advertising of an important project kicked off in 2012 jointly with my friend Olivier Ethgen. We are putting together a book (see bottom of the page) on the future of health economics to be published in summer of 2013. It was a busy undertaking but we managed to get a great selection of authors together to write about the important matters in our field. I would like to thank all of you who contributed.

Wishing you all the best for the upcoming holiday season.

Warm regards

Ulf

The Future of Health Economics 

Edited by Ulf Staginnus and Olivier Ethgen

July 2013 200 pages 978-1-4094-4543-2

244 x 172 mm Hardback £85.00

The pharmaceutical industry faces a well-documented perfect storm: on the one hand, the patent cliff; the lack of new blockbusters and, on the other, economic pressure on pricing from markets with growing expectations and shrinking budgets. In the face of such pressure, traditional health economics models no longer seem appropriate and yet what do we have to replace them? The growing focus on 'value' and 'cost effectiveness' are evidence of new emerging thinking although, even here, with the shift from medicine as cure to medicine as palliative, as a treatment for chronic illness and with the growing emphasis on preventative approaches, the landscape is complex and challenging.

The Future of Health Economics offers a window into some of the most influential emerging issues in pharmacoeconomics; issues such as risk-sharing and alternative pricing models or the potential impact of radical new approaches such as personalized medicine; as well as exploring the changing role of government and regulators.

Ulf Staginnus and Olivier Ethgen, themselves two of the most well-regarded practitioners in this field, have brought together some leading-edge thinkers from industry and academia around the world to provide the industry, policy-makers, regulators, health practitioners and academics with the raw material for their future scenarios.

www.gowerpublishing.com/isbn/9781409445432

France debating ITR (Index Thérapeutique Relatif)

Dear Readers,

The French HAS, with its representative Jean-Luc Harousseau, outlined at a recent meeting (12. Sep) organized by nile-consulting the move towards the ITR system replacing the ASMR in 2013. The new Index Thérapeutique Relatif, if implemented would be similar to the German system, mainly based on efficacy criteria in a comparative fashion (head to head) consisting of 5 categories:

Each category will be linked to certain rules regarding price.

ITR inférieur (lower): no reimbursement

ITR identique (similar) : lower price

ITR bénéfice minime (marginal benefit): same price

ITR bénéfice moyen (moderate benefit) : price negotiated

ITR bénéfice majeur (major benefir) : European price

For ITR moyen (moderate) and majeur (major) a medico-economic evaluation will be required, initially as a flash report with a full assessment 2-3 years later.

Early dialogue is encouraged in order to establish the right comparator for development programs.

Please find below an interesting transcript and the Q&A session with Jean-Luc Harousseau, in French only. Currently ITR is not yet included in the financial law but at a pilot stage. 

Cheers

Ulf 

Market Access Challenges

Hello Everyone,

finally we are finishing up the holidays, enough of sand and salty water ... Sharing with you a "summer" discussion I have had with the folks from pharmaphorum.com

Curios as to your views on the current matters???

Hope you had a great summer!

Cheers
Ulf

Prices negotiated in Germany most likely are not going to be confidential after all

Dear All,

further to my previous post on the confidentiality of prices in Germany after IQWIG assessment it seems that an agreement of confidentiality could not be reached and it looks like that rebate prices are being published.
If that is the case profound implication on European prices can be expected through external price referencing.
Here is a link to a presentation I gave on the topic
Regards
Ulf