1 Pharmacoeconomics: future aheadPresented by- Sonu Bhardwaj Sharma
2 Flow of presentation Changing healthcare environment Use of pharmacoeconomics and methodologies Transition from EBM to VBM concept Evolving drivers Increasing demand of PE studies Healthcare technology assessment( HTA) Comparative effectiveness Future of PE Risk sharing agreement PE and regulatory appraisals PE Case Study : Lucentis
3 Changing healthcare environmentClinical development Marketing authorization Marketing & sales 20th century Market access Clinical development Marketing authorization Marketing & sales 21st century
4 Pricing and reimbursement Formulary listing/ coverageCriteria for market access are different from those for marketing authorization Market access Market authorization Pricing and reimbursement Formulary listing/ coverage Efficacy Safety Quality Unmet medical & economic need Relative effectiveness Cost-effectiveness Budget Impact (national level) Budget Impact (local level) Rebates and discounts Additional services/studies Regulatory authorities National Pricing & Reimbursement authorities HTA organizations Regional and hospital Purchasers
5 USE OF PHARMACOECONOMIC RESEARCHPharmaceutical reimbursement Selecting formulary products Price Negotiations Clinical Practice Development guidelines Communication to prescribing physicians COMPARING PHARMACOECONOMIC METHODOLOGIES METHODOLOGY Cost-Minimization Cost-Effectiveness Cost-Benefit Cost-Utility Cost-Consequence CONSEQUENCES Quality-Adjusted Life Years (QALYs) long-term cost–benefit assessments treatment convenience and compliance for patients long-term risk-benefit analysis The Main Uses Of Pharmacoeconomics research are in pharmaceutical reimbursements
6 Evolution from “EVIDENCE” based medicine to “VALUE” basedClinical Evidence Focus Clinical Value Focus VBM GUIDELINES AND COMPENDIAS EBM TRIAL BASED RESEARCH VBM (value based medicine) Focus on effectiveness and “value” to stakeholders PRE EBM focus on novel MOA EBM (evidence based medicine) Focus on efficacy only Value pyramid
7 The evolving drivers for assessing the “value” of a drugExisting drivers Evolving drivers Features – what it is Molecule Mechanism of action Features – what it is Molecule Mechanism of action Benefits – what it does Efficacy Safety Benefits – what it does Efficacy Safety Value – why it matters Cost effectiveness Quality of life Convenience
8 The increasing demand for comparative clinical effectiveness and cost effectiveness (pharmacoeconomics) NICE Economic evaluation introduced into pricing & reimbursement process in Ontario in 1991 and Australia in 1992. “Opportunity cost” concept as justification for “rationing”: have to compare new technology to the next best alternative in terms of benefits and costs: comparative clinical effectiveness and cost effectiveness Expansion of HTA & evidence-based reimbursement Full consideration of clinical, economic, legal and ethical aspects Applied in some shape or form in every major market ex-U.S. Increasingly also applied at the regional and hospital level Comparative effectiveness research CMS has always provided coverage guidance based on clinical effectiveness for devices and procedures Private payers are requesting clinical and economic data based on the AMCP format for formulary submissions
9 Health Technology AssessmentsDefinition Effects of HTA dissemination HTA is a broad concept referring to evaluation of both clinical and economic performance for many types of medical technologies: • surgeries • diagnostics • pharmaceuticals Affect corporate investment decisions • Modify R&D priorities and spending levels • Change regulatory policy • Modify marketing of a technology • Change third-party payment policy • Affect acquisition or adoption of a new technology • Change the rate of use of a new technology • Change clinician behaviour • Change patient behaviour • Reallocate national or regional health care resources In UK, the National Institute for Clinical Excellence (NICE): uses HTAs to assess cost–benefit of newly licensed agents and has traditionally fixed a bar of £30,000 incremental cost per QALY for treatments to prove cost effectiveness Centres for Medicare and Medicaid Services (CMS), for evidence of value demonstration. In U.S, HTAs and comparative-effectiveness research (CER) used to compare cost to benefit comparisons Recent example : Provenge. The assessment of Provenge by CMS marks a landmark event in US reimbursement history.
10 Comparative effectivenessCost per quality-adjusted life-year (QALY) gained from selected clinical strategies Drug comparison cost per QALY gained Switch to am aromatase inhibitor for early-stage breast cancer vs. continued tamoxifen $22,900 Implant a cardioverter-defibrillator (primary prevention) vs. continued medical management $37,400 to $77,200 Perform fusion surgery for degenerative spondylolisthesis with spinal stenosis vs. conservative management $120,000 Prescribe trastuzumab for metastatic breast cancer vs. standard chemotherapy $150,000 Prescribe erlotinib for advanced pancreatic cancer vs. gemcitabine alone $370,000 to $500,000 *Values are given in 2008 U.S. dollars, with adjustment for inflation according to the Consumer Price Index. Numbers are the ratios of the added cost per person to the gain in QALYs per person
11 Risk-sharing agreements (RSAs) will evolveWhat is an RSA? RSAs typically serve to hedge a payer’s financial risk and to ensure value where it might not be clear • RSAs can be performance and/or financially based • Risk-sharing contracts may be pushed for by patient-advocacy groups where patient access might be limited Who is utilizing RSA? A number of European countries, including the UK, Germany and France; Australia; Canada; and the US • Specifically, RSAs are gaining momentum in the UK where guidance decisions by NICE determine whether drugs will be covered and reimbursed by the NHS Why use a RSA? A shift in the clinical trials’ process to bring drugs to market more quickly, the increasing cost of drugs, and a focus on value demonstration is driving the popularity NICE delivered the preliminary assessment of a multi-technology appraisal of treatments for metastatic renal cell carcinoma (RCC) Example: declaring that Sutent® (sunitinib), Avastin® (bevacizumab) (+ interferon), Nexavar® (sorafenib), and Torisel® (temsirolimus) were not costeffective Options and should corrected before making available on NHS .
12 PE studies and regulatory appraisalsAt present , bodies like NICE perform PE studies but occur after regulatory approvals, FDA and EMA continue to use EBM But in future, As VBM begins to permeate and shape clinical decision making, other factors such as QoL, which are already computed with HTAs, might begin to influence regulatory approvals. Capture data that can be used to support value propositions for products in clinical development. like: Health-related Quality of Life Target Patient Subgroups Value from the Stakeholders’ Perspective Communicating Value Propositions (PFS – progression free survival; TTP – time to progression; ORR – overall response rate), safety endpoints, and measures of generic and disease-specific QoL. These outcome “channels” should be prioritized based on indication characteristics such as: > tumor type (stage/grade) > epidemiology > severity of disease (morbidity) > age of onset > unmet medical need
13 PE Case evaluation Situation Outcome ComplicationDose modelling to support Lucentis market access in Europe, Canada and Australia Situation Lucentis (ranibizumab) licensed for patients with wet age-related macular degeneration Pivotal trials used monthly dosing regimen Smaller scale trials and drug simulation indicated that flexible dosing would achieve similar outcomes Outcome Label specifies 3 initial monthly injections followed by flexible OCT guided dosing scheme Complication Economic assessment driven by annual treatment cost Payers concerned about the annual cost of monthly dosing
14 Modelling cost-effectiveness of LucentisEfficacy data from registration trials •Translating vision benefits into patient utilities & QALYs Resource use and cost data from drug modelling • Costs driven by the number of vials used and the associated costs of injection Resulting cost-effectiveness found highly acceptable, subject to uncertainty about real- world dosing (and resulting efficacy) “Risk-sharing” offered by manufacturer • can bear this risk given the additional information manufacturer has about product characteristics
15 Drug Costs are high and on the riseU.S. costs roughly double those rest of world Overall Rising Costs– Due to 3 components: 1. Increased per capita drug use Some related to aging population But some pure increase in drug #s/use 2. Increased prices of individual drugs Rising significantly higher than inflation rate 3. Shift to newer more expensive drugs
16 Needs to monitor value of pharmaceuticalsIncreased cost. Increased number of alternatives available to treat illness and disease. Growing demand for pharmaceuticals. Introduction of high cost biotechnology products. Indexes of Average U&C Prices for 50 Brand and 46 Generic Drugs Frequently Used by BCBS FEP Enrollees, by Month, 2000 through 2004
17 PE studies are becoming a part of clinical studiesClinical trials of future oncology products need to consider overall survival and other clinical endpoints deemed meaningful for a given cancer, safety endpoints, and measures of generic and disease specific quality of life. These outcome “channels” should be prioritized based on indication characteristics such as: (For cancer patients) tumour type (stage/grade) epidemiology severity of disease (morbidity) age of onset unmet medical need
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