Risk Sharing Schemes

1. Risk Sharing Schemes Dr Rafiq Hasan Director of Market Access Novartis Pharmaceuticals UK Ltd This presentation reflects my personal views and not those of Novartis Pharmaceuticals UK Ltd

2. Summary - risk share schemes facilitate access to innovative therapies • Risk share schemes are many and varied in design and structure. Examples include outcome based guarantees, price adjustments based on outcome and dose capping schemes to name but a few. • Schemes are likely to differ depending on the nature of the medicine and the condition to be treated • Schemes should only be used in exceptional circumstances and in consultation with the manufacturer • Schemes should provide clear benefit to patients 2 | Presentation Title | Presenter Name | Date | Subject | Business Use Only

3. Context - risk share schemes provide a method to reduce uncertainty and enable patient access • Risk share schemes usually arise in the context of a Health Technology Appraisal (HTA) • HTA is based upon complex mathematical modelling incorporating data and critically assumptions from varied sources • Economic modelling is an evolving science and often results in wide-ranging estimates of cost-effectiveness – based on methodology and assumptions • At time of launch clinical data set tends to be limited resulting in greater uncertainty in economic modelling • More difficult to accurately estimate the cost effectiveness of the intervention and therefore likely to result in negative HTA decision with little or no patient access • Risk share schemes can reduce this uncertainty whilst allowing appropriate patient access and importantly the ongoing collection of relevant naturalistic data for future HTA 3 | Presentation Title | Presenter Name | Date | Subject | Business Use Only

4. Principles underlying such schemes – industry perspective • Benefit to patients • Not mandatory – initiated by manufacturer • Consideration of administrative burden of implementing the scheme – simplicity is essential • Scheme should be based on objective, transparent and workable criteria such as measures of response • Pragmatic approach required from all stakeholders to allow different models to be applied flexibly • Predetermined duration usually linked to HTA re-review and/or when new data is available • Maintain patient confidentiality • Must comply with relevant local regulations including PMCPA Code of Practice 4 | Presentation Title | Presenter Name | Date | Subject | Business Use Only

5. Early engagement with key stakeholders critical for success • Manufacturer • Department of Health • HTA agency – NICE, SMC • Professional bodies – Royal Colleges • Patient Support Groups • Local NHS stakeholders • Local clinicians • Hospital Pharmacy/Medicines Management Team • PCT Commissioners/Pas • Agreement between commissioners and providers 5 | Presentation Title | Presenter Name | Date | Subject | Business Use Only

6. Benefits of such schemes • Patient access and consequent health benefits • Support commitment to demonstrating value of the technology and reducing uncertainty to budget holders • Ensure appropriate use of technology – eligible patients and objective assessment of benefit • Encourage compliance • Transparent assessment of outcomes • Ongoing data collection assessing use of technology in ‘real life’ circumstances – useful for future HTA • Partnership working between NHS and industry 6 | Presentation Title | Presenter Name | Date | Subject | Business Use Only

7. Challenges • Administrative burden • Complexity of multiple NHS systems • Alignment with NHS financial flows • Agreement on objective measures that underpin a particular scheme • Mechanisms for conflict resolution required 7 | Presentation Title | Presenter Name | Date | Subject | Business Use Only

8. Experience to date and future direction Experience to date • Still early days – mixed opinions • Initial teething problems overcome in most instances • Enable patient access Future Direction • A useful option in specific circumstances to facilitate early market access • Improved operational efficiency as experience with current schemes matures • Further consideration and quantification of resources required to administer such schemes 8 | Presentation Title | Presenter Name | Date | Subject | Business Use Only