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Assessment, pricing, and reimbursement of new health technologies: Innovative reimbursement models: Examples from health insurance systems in Asia. Abdulkadir Keskinaslan , MD, MBA, MPH International Conference for Improving Use of Medicines – ICIUM 2011 Antalya,Turkey , November 17, 2011.

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Assessment, pricing, and reimbursement of new health technologies: Innovative reimbursement models: Examples from health insurance systems in Asia

AbdulkadirKeskinaslan, MD, MBA, MPH

International Conference for Improving Use of Medicines – ICIUM 2011

Antalya,Turkey, November 17, 2011


Striking a challenging balance
Striking a Challenging Balance technologies:

Continued innovation

Appropriate use

Access to new medicines

Household & system affordability

2| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


The underlying technologies: concept of innovative pricing and patient access schemes is value-based pricing

  • In an increasingly cost-sensitive environment, it is becoming more difficult for highly-priced innovative drugs to gain reimbursement

  • Pharma is now moving towards a value-based pricing system, opting for risk-sharing in an effort to improve equitable access to effective care

  • Innovative pricing and patient access schemes are arrangements which may be used on an exceptional basis for the acquisition of medicines

  • The schemes are intended to improve the cost-effectiveness of a medicine and therefore allow HTA bodies to recommend treatments which they would otherwise have deemed not cost-effective

  • Risk-Sharing Agreement:

    • “A contract between two parties who agree to engage in a transaction in which there are uncertainties regardless concerning its final value. Nevertheless, one party, the company, has sufficient confidence in its claims of either effectiveness or efficiency that it is ready to accept a reward or a penalty depending on the observed performance.”

Source: Akehurst,Taiwan HTA Workshop 2010; de Pouvourville, EJHE, 2006

3| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


From price volume and money back to value based reimbursement non linear pricing
From “Price Volume” and “Money Back” to Value Based Reimbursement: Non-linear pricing

  • Price-Volume Agreement assumes that “reimbursement buckets” are filled from left to right

  • Money-back Guarantee assumes binary outcome: full response or failure

  • Is it possible to devise a scheme, where all “buckets”! Are filled simultaneously, depending on patient characteristics (e.g. unmet need, risk, benefit)?

high

P3

Weighted Average Price

Average Price

P2

P1

low

S1

S2

S3

Size of Patient segment or indication

4| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Pricing models to improve access and affordability
Pricing models to improve access and affordability Reimbursement: Non-linear pricing

Financial Utilization Models

Outcomes Based Pricing Models

Risk Based

Pricing Models

Initial 10% of patients

Full response

High Risk

Next 20% of patients

Partial response

Moderate risk

All others

No response

Low risk

Patient segments

Patient segments

Patient segments

  • Price volume agreement: e.g. full reimbursement for first 10% of patients, reduced reimbursement for next 20% of patients, no reimburse-ment for all others

  • Money back guarantee, e.g. full reimbursement for responders, reduced reimbursement for partial responders, no reimburse-ment for non-responders

  • Reimbursement linked to value and level of risk factors (e.g. based on diagnostic test)

5| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Lucentis Reimbursement: Non-linear pricing (ranibizumab) for AMD – UKPer patient, response-assumed, if longer treatment required, drug free of charge

Financial Utilization Models

  • In 2008 NICE found Lucentis to be cost-effective for wet Age-Related Macular Degeneration (AMD) if a course of treatment did not exceed 14 injections

  • To ensure full patient access, Novartis agreed to pay for any injections of Lucentis that exceeded the 14 recommended by NICE

    • Company covers the costs of additional injections

      Results

  • Patients received effective innovative treatment

  • Improved cost effectiveness for the NHS

  • Lucentis became established as effective treatment in the market

Source: National Institute for Health and Clinical Excellence.

Final Guidance: Ranibizumab and pegaptanib for age-related macular degeneration.

http://guidance.nice.org.uk/TA155

6| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Velcade bortezomib for multiple myeloma uk per patient response dependent cash refund
Velcade (bortezomib) for multiple myeloma - UK Reimbursement: Non-linear pricingPer patient, response dependent, cash refund

Outcomes Based Pricing Models

  • In 2006, Velcade treatment was considered ‘not cost-effective’

    • costs approx. £3,000 per treatment cycle (£38,000 per QALY).

  • Johnson & Johnson scheme proposed that treatment would be reimbursed only when effective

    • Full or partial response - remain on therapy and funded by NHS

    • minimal or no response - cease treatment and costs refunded to NHS by the company

  • ICER with rebate, stopping rule after 4 cycles with partial and full responders continuing therapy: £20,700/QALY

    • Response assessed after max of 4 treatment cycles and response was measured by tumor shrinkage

      - reduction in serum M-protein levels of 50% or more

    • 60 day claim period

Source: A Keskinaslan, ISPOR Asia, Thailand September 5-7th, 2010

7| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Actonel risedronate for osteoporosis us per patient response dependent pay for consequence
Actonel Reimbursement: Non-linear pricing (risedronate) for osteoporosis – USPer patient, response dependent, pay for consequence

Outcomes Based Pricing Models

  • In 2009 Procter & Gamble and Sanofi-Aventis agreed the scheme with Health Alliance Medical Plans

  • A risk-sharing agreement where preventative treatment is assessed against unwanted disease outcomes

    • To pay for bone fractures occurring while the patient is taking Actonel.

    • For these patients, any health costs associated with a non-spinal fracture to be covered by the manufacturing companies (estimated to cost between $6,000 and $30,000 per fracture, depending on the fracture location).

    • Patients qualify if they have no-comorbidity, no prior fractures etc; and have taken Actonel for six out of the nine most recent months

  • Intention of the scheme:

    • To reduce potential treatment costs for fracture treatment for patients on Actonel

    • To provide an incentive to keep qualified patients on Actonel instead of switching to less-expensive generic alternatives

    • To keep Actonel on a lower formulary tier than competition

8| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011

Source: A Keskinaslan, ISPOR Asia, Thailand September 5-7th, 2010


Telbuvidine for chronic hepatitis b treatment australia acceptable icer across patient segments
Telbuvidine for Reimbursement: Non-linear pricingchronic hepatitis B treatment - Australiaacceptable ICER across patient segments

Risk Based

Pricing Models

  • Telbuvidine is indicated for the treatment of HBeAg-positive and HBeAg-negative chronic hepatitis B patients who have compensated liver disease, evidence of viral replication and active liver inflammation and who are nucleoside analogue naïve.

  • Telbuvidinepriced at weighted average price across patient subgroups

    • priced at a high but acceptable incremental cost effectiveness ratio compared to lamivudinefor HBeAg-positive (e-pos) patients

    • priced higher than lamivudine for HBeAg-negative patients based on cost-offsets due to reduced resistance rates and thus lower use of more expensive 2nd-line adefovir

Source: http://www.health.gov.au/internet/main/publishing.nsf/Content/pbac-psd-telbivudine-mar08; www.novartis.com.au/DownloadFile.aspx?t=p&f=seb.pdf&dateid

9| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


The underlying concept of patient access schemes is no different from innovative pricing schemes: value-based pricing

Willingness to Pay BasedPricing Models

Affordability BasedPricing Models

Discount for members

Full price

Price or free goods

reward for compliance

Partial price

Value added services

for compliant patients

No price

Patient segments

Patient segments

  • Loyalty Card: e.g. progressive discounted price for members, additional reward for compliant patients (4+1), value added services (free routine tests) for long term compliant patients

  • Patient Assistance Program, e.g.

  • Patients pay what they can afford, governments or private insurance companies may contribute

10| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Noa providing glivec imatinib for cml indonesia affordability based model shared contribution
NOA providing Glivec (imatinib) for CML - Indonesia different from innovative pricing schemes: value-based pricing Affordability based model, shared contribution

  • Novartis Oncology Access (NOA) designed to bridge the affordability gap in Indonesia

  • NOA offers patients to pay what they can afford, based on a financial evaluation – to bridge the affordability gap.

  • Co Pay Model Based on the “Cost of Living Wages” (CoL)

  • Patient’s financial resources do not fall under 2 X CoL after purchasing Glivec

  • 7 tier scheme determined through assessment made by financial agency; in December, 2010: 305 patients

  • Multiple Stakeholders involved in setting up the program

  • Ministry of Health Indonesia

  • Indonesian Society of Hematology and Blood Transfusion

  • Indonesian Hematology and Internal Medicine Medical Oncology National Working Group

  • Indonesian Cancer Foundation, Jakarta Branch

  • Financial assessment by PT Survindo Putra Pratama

  • Novartis Indonesia

Affordability BasedPricing Models

Full price

Partial price

No price

Patient segments

11| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Lucentis ranibizumab for amd uae affordability based model with shared contribution
Lucentis (ranibizumab) for AMD – UAE different from innovative pricing schemes: value-based pricing Affordability based model with shared contribution

  • Novartis introducing MUSANDA Program, a patient access & affordability program which enables ophthalmologist to treat a segment of patients that was left with no treatment

  • Program helps patients with funding gap and creates a financing option for self-pay patients

  • It helps restoring sight and prevent blinds & visual impairment for AMD/DME patients

  • Program also offers discounted fees for patients at affiliated clinics and hospitals

  • 3rd party conducts financial assessment to identify eligibility for different level of support

Affordability BasedPricing Models

Partial price for all segments

Patient Purchase

Patient segments

12| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Musanada different from innovative pricing schemes: value-based pricing program designed to help patients with no access

Affordability barrier

No Access

Patients wAMD & DME for MUSANADA program :

13| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


Q&A different from innovative pricing schemes: value-based pricing

[email protected]


Examples of estimated icer thresholds
Examples of Estimated ICER Thresholds different from innovative pricing schemes: value-based pricing

If the ICER is within a defined acceptable range (threshold) by the payer/ provider of healthcare, then there is a high likelihood that the treatment could be accepted

ICER = incremental cost-effectiveness ratio; QALY = quality-adjusted life-year; LYG = life-years gained;

GDP = gross domestic product; WHO = World Health Organization; DALY = disability adjusted life-years; NICE = National Institute for Clinical Excellence (UK); PBAC = Pharmaceutical Benefits Advisory Committee

Value in Health 2004;7:518

15| Innovative Reimbursement Models | Keskinaslan| 17 Nov 2011


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