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The New Pricing and Reimbursement of Pharmaceuticals in Italy Prof. Fabrizio Gianfrate LUISS University & Business School, Rome, Italy EFA – Vilnius - May, 29 2010 Organization of Italian NHS NHS € MAJOR HOSPITALS REGIONS € €

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The New Pricing and Reimbursement of Pharmaceuticals in Italy Prof. Fabrizio Gianfrate LUISS University & Business


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slide1

The New Pricing and Reimbursement of Pharmaceuticals in Italy

Prof. Fabrizio Gianfrate

LUISS University & Business School, Rome, Italy

EFA – Vilnius - May, 29 2010

slide2

Organization of Italian NHS

NHS

MAJOR HOSPITALS

REGIONS

Local Healthcare Units (ASL)

+

SMALL HOSPITALS

Patient

G.P./Spec

Pharmacies

Wholesaler

Company

main items of nhs expenditure 2009
Main Items of NHS Expenditure (2009)

Public Health Care Exp./GDP = 6,7%

Total Health Care Exp./GDP = 8,7%

the public hospital expenditure is 47% of the public health care expenditure

Ministry of Economy, 2010

* estimation

slide5

NHS and Private pharma expenditure composition (2009)

Private pharma exp.:

7 bn €

NHS pharma exp: 16 bn €

(11,8 bn retail; 4,2 Hospital)

Source: Farmindustria (mod.)

slide6

Pricing and reimbursement of drugs

Pricing & Reimbursement:

Negotiation

CLASS A:

Assigned price – Reimb. 100%

OFF-PATENT

Assigned price (min – 20% of patented);

Reimb. Reference Price

CLASS H

Only Hospital;

Assigned price;

100% reimbursed

CLASS C

Free price –

Pom No reimb.

CLASS C bis

Free price –

OTC.

No reimb.

market access process
Market access process

AIFA

Italian Drug

Agency

Registered medicines

off patent

reference

price

in patent

“negotiated”

price

NHS pricing and reimbursement

Hospital Bid

Hospital medicines purchased on local bid

ASL (Local

Healthcare

Units)

Medicines bought by local units – Retail channel

pro and cons of the italian reimbursement system
Freedom of the company to choose if asking for reimbursement or not

MA quite fast for not reimbursed medicines

Discussion is mainly focused not on the reimbursement system but on the price system

It means that the decisions on the medical value is tied to the price

Pro and Cons of the Italian reimbursement system
negotiation
Negotiation

Only one process price-reimbursement

Per product

On portfolio

Temporary

Conditional: including specific clauses or agreements (price/volume, monitored, ecc.)

slide10

Negotiation main criteria

NHS budget impact

Comparison with prices of other EU countries

Value of innovation degree

Temporary application by monitoring

Price volume ratio

Cost effectiveness analysis

Total mkt of that area

N. of patients supposed to treat

Mkt forecast and expected share

Annual cost or saving for NHS

Ranking in therapy

Portfolio compensation

Other major EU countries pricing

Risk sharimg – Payment by results

hospital price
Hospital Price
  • for all medicines bought by hospitals the price is based on AIFA negotiation system
  • Starting price for negotiation is 50% of the negotiated price
  • Local bid (when applicable)
reference price for off patent
Only for off-patent medicines (ATC Ctg. IV level)

Reference price is the lowest price of the ATC category IV

Reference Price for off-patent
last 5 years of gov nts rules targeting pharmaceuticals
Last 5 years of Gov’nts rules targeting pharmaceuticals
  • Introduction of the National Drug Agency (AIFA)
  • Cap of 13% farma exp. of NHS expenditure
  • Price reduction of 5% (7% on 2003)
  • Regional based formularies
  • Direct distribution from hospitals
  • Direct purchase from hc unit (50% discounted)
  • Price cut of off-patent drugs
  • Price/volume ratio at negotiation
  • Strong reduction of SPC time
  • New national formulary based on reference price
  • Pharmacies extra discount
  • Prescription limitation notes
  • “Pay-back” clause for overspending 13% on NHS budget
  • 5% tax on promotional expenses
  • Regional reference price on top spending patented drug classes
  • New caps: 14% (retail) and 2,4% (hospitals)
  • Price cut of generics
nhs pharma expenditure caps
NHS pharma expenditure caps

Ceiling of the public pharmaceutical expenditure

13,3% of the financed public health care fund for retails distribution (primary care)

Payback from industries, wholesalers, pharmacies

- Direct from industries on respective calculated budget

- By discount from wholesalers and pharmacies

2,4% of the expenditure of medicines delivered through Hospitals

Extra cap only from regions

Only if all NHS exp exceed

To be taken even from other extra HC budget

20% of annual incremental resources to innovative drugs prices

innovation evaluation criteria
Innovation evaluation criteria

therapeutic effect

therapeutic innovation

=

+

disease seriousness

availability of treatments

+

a

IMPORTANT

b

a

a

c

for each therapeutic agent

b

b

a

b

MODERATE

c

c

c

a

b

MODEST

technological innovation

c

pharmacological innovation

drugs registered with risk sharing
Drugs registered with risk sharing
  • ERLOTINIB (Tarceva) 50% by NHS for 2 months/2 cycles
  • SUNITINIB (Sutent) 50% by NHS for 3 months/2 cycles
  • SORAFENIB (Nexavar) 100% by NHS for 2 months then non refound non resp.
  • DASATINIB (Sprycel) 50% by NHS for 1 month/1 cycle (cytogenetic resp.)
  • NILOTINIB (Tasigna) 100% by NHS for 1 month then refound non resp.
  • BEVACIZUMAB (Avastin) 50% by NHS for 6 weeks then 100% after 15° cycle (10 mg/Kg every 2 weeks) or 16° cycle (15 mg/Kg every 3 weeks)
  • PEGAPTANIB (Macugen) 100% by NHS for 2 doses, then refound non resp.
  • RANIBIZUMAB (Lucentis) 100% by NHS for 3 months then refound non resp.
  • LAPATINIB (Tykerb) 100% by NHS for 3 months then refound non resp.
slide19

Fabrizio Gianfrate

Professor of Health Economics

Luiss University and Business School

University of Ferrara

Consultant

Editor-in-chief Tecnica Ospedaliera magazine

tel.: +39 335 6060065e-mail:fgianfrate@tiscali.it