Pricing and Reimbursement: Innovative Risk-Sharing Strategies

Introduction

Novel niche biologics entering the market require high price points in order to provide manufacturers with a return on investment. However, with heightening regulatory scrutiny and increasing cost-pressures, a balance must be struck between incentivizing Pharma to develop novel drugs with high unmet needs, and that of the healthcare payers which fund healthcare costs.

Scope

*Overview of the different types of risk-sharing agreements adopted by manufacturers

*Insight into the utilization of such schemes in the UK, US, Italy and Australia

*Examination of the pros and cons of risk-sharing agreements

*Identification of key strategic recommendations for optimizing risk-sharing strategies

Highlights

Risk-sharing schemes are ideal if a well-established biomarker can be used to unambiguously determine if a patient has responded to treatment, however for many other oncology drugs relevant biomarkers still need to be discovered hence impeding a more widespread adoption of these schemes.

The new NICE end-of-life guidance rule can be useful for drugs struggling to gain a positive NICE opinion. By targeting terminal patients with months to live, they can achieve market access and a route into the treatment of other stages of a disease, but only if further concessions are made to reduce the drug's QALY.

If a Health Technology Assessment (HTA) is introduced in the US, it could create a more cost-effective use of current US healthcare resources, however it is important to note this will increase the burden on Pharma to produce data, and could also effectively lead to the end of free pricing in the US.

Reasons to Purchase

*Understand the importance of cost-effectiveness and its impact on pricing and reimbursement of pharmaceuticals

*Gain insight into risk-sharing schemes and identify how these can be implemented and optimized

*Case study analysis of recent risk-sharing agreements in US, UK, Italy, and Australia

Report Highlights
Highlights

Risk-sharing schemes are ideal if a well-established biomarker can be used to unambiguously determine if a patient has responded to treatment, however for many other oncology drugs relevant biomarkers still need to be discovered hence impeding a more widespread adoption of these schemes.

The new NICE end-of-life guidance rule can be useful for drugs struggling to gain a positive NICE opinion. By targeting terminal patients with months to live, they can achieve market access and a route into the treatment of other stages of a disease, but only if further concessions are made to reduce the drug's QALY.

If a Health Technology Assessment (HTA) is introduced in the US, it could create a more cost-effective use of current US healthcare resources, however it is important to note this will increase the burden on Pharma to produce data, and could also effectively lead to the end of free pricing in the US.
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Table of Contents 5
Chapter 2 Introduction to risk-sharing agreements 6
Key findings 6
Key types of risk-sharing agreements 7
Three key risk-sharing agreements 8
The evolution of risk-sharing schemes in the UK 9
Factors driving the introduction of risk-sharing agreements in the UK 10
NICE's QALY limit too low to permit approval of certain high value, life-saving drugs 10
Lack of coordination between Health Technology Assessments (HTAs) provides disparate access to novel drugs 10
Delays in issuing guidance is detrimental to both Pharma and the patient 12
Lack of transparency makes stakeholders question the value of QALYs 12
Excessive cost-containment measures may hinder access to innovative life-saving drugs 13
Italian risk-sharing agreements are optimized through the Register of Oncology Medicines (RFOM) 17
Will a NICE-like model succeed in the US? 20
Risk-sharing agreements could help reduce costs of universal healthcare in the US 22
Australian risk-sharing schemes allow market access in the face of low cost-effectiveness thresholds 23
Summary of risk-sharing agreements across key markets 24
Chapter 3 Optimizing risk-sharing agreements 25
Key findings 25
The pros and cons of entering risk-sharing agreements 26
Key recommendations developing risk-sharing agreements 28
Identify a suitable agent 29
Deciding on which type of risk-sharing agreement to adopt 29
Tarceva's risk-sharing scheme focuses on bringing costs into line with rival Taxotere 30
Avastin risk-sharing scheme based solely on price and not cost-effectiveness 31
Aclasta's and Actonel's money-back guarantees for treatment failure offer an alternative risk-sharing option 32
Timing of implementation of risk-sharing schemes is critical to their success, be that for market entry approval or as part of a lifecycle management strategy 33
Lucentis's first-to-market advantage for wet age-related macular degeneration 33
Merck & Co. incentivizes Januvia uptake providing bigger discounts on positive clinical outcomes for diabetes patients in the US 34
Strong head-to-head clinical data are required to support risk-sharing applications in the UK 35
NICE continues to reject Tyverb due to cost-effectiveness issues despite a proposed risk-sharing scheme 35
Erbitux's positive NICE re-evaluation based on new clinical data and a proposed risk-sharing scheme 36
Identify key stakeholders and develop a pilot program 38
The Bosentan Patient Registry in Australia allows systematic drug evaluation as part of Tracleer's risk-sharing scheme 38
Investigate all regulatory and legislative avenues which may aid access to market 40
Sutent's and Revlimid's risk-sharing scheme and end-of-life guidance pave the way for positive NICE guidance 40
Importance of not underestimating the influence of patient advocacy groups on reimbursement approval 41
NICE U-turn over Velcade driven by implementation of risk-sharing scheme and patient support 41
The future of risk-sharing agreements 43
Future risk-sharing candidates in the UK? 43
Strategies to minimize risk-sharing burden on healthcare payers and providers 44
The future of risk-sharing agreements in the US 45
Bibliography 46
Publications and online articles 46
Datamonitor reports 49
APPENDIX 50
Contributing experts 50
Exchange rates 50
About Datamonitor 51
About Datamonitor Healthcare 51
Datamonitor consulting 51
Disclaimer 53
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List of Tables
Table 1: Evolution of approved risk-sharing agreements in the UK, 2007-09 8
Table 2: Market access restrictions for oncology drugs in Italy and the UK, 2009 17
Table 3: Evolution of approved risk-sharing agreements in Italy, 2006-08 19
Table 4: Examples of pharma risk-sharing agreements in Australia, Germany, Italy, the UK and US, 2005-09 24
Table 5: Comparative snapshot of Lucentis versus Macugen 34
Table 6: Exchange rates, 2008 50
List of Figures
Figure 1: One must ensure a competitive price point for new drugs entering the market 9
Figure 2: Health Technology Assessment (HTA) bodies in the UK comprise NICE, SMC, and the AWMSG 11
Figure 3: Shortcomings of the 2005 UK Pharmaceutical Price Regulation Scheme (PPRS) and amendments included in the 2009 PPRS 14
Figure 4: Process for considering a flexible pricing scheme in the UK 16
Figure 5: RFOM's web-based approach for the management of oncology patients 18
Figure 6: Recommendations for a NICE-like model in the US 21
Figure 7: The advantages of risk-sharing agreements outweigh the drawbacks 26
Figure 8: It is vital to find the point at which Pharma will start earning from the risk-sharing agreement 30
Figure 9: Process flow to receive Erbitux rebates or credit notes from Merck Serono for colorectal cancer patients in England and Wales 37
Figure 10: Stakeholder's motives for participating in a risk-sharing agreement 38
Figure 11: Ethical aspects and data management are two key challenges for the Bosentan Patient Registry in Australia 39
Figure 12: Pay-for-performance scheme for Velcade in England and Wales 42
Figure 13: British Oncology Pharmacy Association recommendations on UK risk-sharing agreements 44
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