Germany's IQWiG prepares to test new cost-benefit methodology

The German health technology assessment institute, IQWiG, plans to begin testing the
latest version of its cost-benefit assessment methodology for medicines towards the end of September. The results of the testing, which will last for about four months, will be keenly awaited by pharmaceutical companies because IQWiG's assessments will be used to set ceiling reimbursement prices for new drugs reimbursed by the health insurance bodies. Previously, IQWiG (the Institute for Quality and Efficiency in Healthcare) assessed only the clinical benefits of medicines, but under last year's healthcare competition reform law it now also has to consider the costs of therapies in relation to their benefits. To do this it has had to draft a cost-benefit methodology. A first version was put out for public consultation earlier this year, and drew many comments from stakeholders. Some were critical of the proposed methodology, particularly the "efficiency frontier analysis" that IQWiG plans to use as the basis of cost-benefit assessments (Scrip Online, April 8th,
2008). The US industry body, PhRMA, for example, said that while the efficiency
frontier was "a theoretically sound concept", it was not clear whether it would work in practice.
IQWiG claims that efficiency frontier analysis can be "used in a very flexible manner to compare the cost-benefit relation of any number of therapy alternatives". The graph produced using this analysis shows clearly which existing therapies are efficient and those that are not, it said. For drugs that are more beneficial but more expensive than those already in use, it will be possible to determine where their price would have to lie so that the cost-benefit relationship falls within the accepted efficiency range, it added.

Pricing and cost assessment
IQWiG's new methodology will help the central federal association of health insurance
funds to determine an appropriate ceiling price for drugs that are reimbursed by the
statutory health insurers but cannot be included in a reference price group, according to the institute.
If the price suggested by the manufacturer was higher than this ceiling, the manufacturer could choose whether or not to lower its price. If it did not, the patient would have to pay the difference or opt for another product. The institute's assessment will also include a budget impact analysis that can be used in estimating how a decision may affect expenditure in the healthcare system as a whole.


IQWiG said it expects to publish the next version (1.1) of the methodology at the end of September. This version will not specifically take into account the comments received, but will "clarify aspects that were misunderstood in version 1.0".
Simultaneously, the institute plans to publish a "scientific reply" to the comments, as well as the comments themselves and three additional technical documents. The
comments will be incorporated into version 2.0, which is expected to be published in
March 2009, again for public consultation. Once this consultation is complete, version 3.0 will be published, although the institute could not say at this stage when this might be.

VFA uploads comments
In the meantime, the R&D-based industry body, the VFA, has published on its own
website some of the comments sent to IQWiG on the proposed cost-benefit methodology. The VFA decided to do this in the interests of "transparency" and to allow interested parties to "play a role in the development of a future cost-benefit evaluation of medicines", said its director, Cornelia Yzer.

SCRIP - World Pharmaceutical News -
www.scrippharma.com FILED 27 August 2008 COPYRIGHT Informa UK Ltd 2008

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