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ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
ABC1 - D.A. Cameron - Managing costs in higher-income countries
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ABC1 - D.A. Cameron - Managing costs in higher-income countries

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  • This slide has presented many times before, showing that whilst R&D spending has continued to increase, the number of new medicines approved has declined, so productivity of pharma R&D is falling.
  • Transcript

    • 1. Managing costs in higher-income countries David Cameron University of Edinburgh
    • 2. Economics
    • 3. Is there anything more to be said?
    • 4. France Highest per capita health care expenditure in Europe including €14 billion each year on cancer. Estimated annual GDP loss of €17 billion from cancer. ~ 20% of all cancer spend is on drugs
    • 5. Cost of treatment <ul><li>Imaging costs – rising the fastest in US </li></ul><ul><li>Hospitalisation </li></ul><ul><li>Staff costs </li></ul><ul><li>Drugs ~ 20% but rising faster than total costs </li></ul>
    • 6. Cost of treatment <ul><li>Imaging costs – rising the fastest in US </li></ul><ul><li>Hospitalisation </li></ul><ul><ul><li>We give drugs as outpatients </li></ul></ul><ul><ul><li>Can we manage complications as outpatients? </li></ul></ul><ul><li>Staff costs </li></ul><ul><li>Drugs ~ 20% but rising faster than total costs </li></ul>
    • 7. Cost of treatment <ul><li>Imaging costs – rising the fastest in US </li></ul><ul><li>Hospitalisation </li></ul><ul><ul><li>We give drugs as outpatients </li></ul></ul><ul><ul><li>Can we manage complications as outpatients? </li></ul></ul><ul><li>Staff costs </li></ul><ul><ul><ul><li>No one wants pay cuts </li></ul></ul></ul><ul><ul><li>Can we work more efficiently ? </li></ul></ul><ul><ul><ul><li>Duplicate tests, poor communication, frequent visits </li></ul></ul></ul><ul><ul><li>Can we delegate to others who are paid less? </li></ul></ul><ul><ul><ul><li>WITHOUT reducing quality? </li></ul></ul></ul><ul><li>Drugs ~ 20% but rising faster than total costs </li></ul>
    • 8. European cancer drug spend <ul><li>Inexorable rise in cancer drug expenditure – most of which is NOT on new drugs…… </li></ul>
    • 9. Rising drug costs <ul><li>Rising demand </li></ul><ul><ul><li> incidence </li></ul></ul><ul><ul><li> treatments </li></ul></ul><ul><ul><li> survival of patients </li></ul></ul><ul><ul><li> expectations from patients </li></ul></ul><ul><li>Rising costs </li></ul><ul><ul><li>Low success rate for new drugs </li></ul></ul><ul><ul><li> cost of trials </li></ul></ul><ul><ul><li> blockbuster drugs </li></ul></ul>
    • 10. Productivity is falling… Even allowing for inflation, industry is investing twice as much in R&D as it was a decade ago to produce two-fifths of the new medicines…..
    • 11. Solutions <ul><li>Better collaboration between Pharma and academia </li></ul><ul><ul><li>Translational work in phase I/II </li></ul></ul><ul><ul><li>FEWER, more +ve phase III trials? </li></ul></ul><ul><li>Better dialogue around regulations </li></ul><ul><ul><li>Clinical trials – do we need ALL the data? </li></ul></ul><ul><ul><li>Companion diagnostics </li></ul></ul><ul><ul><ul><li>Pick the right patients </li></ul></ul></ul><ul><ul><ul><li>Avoid monopolies but ensure quality </li></ul></ul></ul>
    • 12. New models ? Phase I. Many drugs………………………… Phase II. Fewer drugs…………… Phase III. Few drugs Phase I. € Phase II. €€ Phase III. €€€€€€€€€€€€€€€ Market €€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ Phase I/II. Some drugs… Phase II/III smaller, less data Phase I/II. € Phase II/III. €€€€ Market €€€€€€€€€€€€€
    • 13. Choice in spending
    • 14. Choice in spending for society
    • 15. So how to choose <ul><li>Cost per QALY </li></ul><ul><ul><li>Quality adjusted life year </li></ul></ul><ul><ul><li>Perfect health = 1.0 </li></ul></ul><ul><ul><ul><li> 1 year perfect health = 1 QALY </li></ul></ul></ul><ul><ul><li>1 year alive with Metastatic breast cancer: </li></ul></ul><ul><ul><ul><li>Stable disease on therapy 0.72 </li></ul></ul></ul><ul><ul><ul><li>Responding disease 0.79 </li></ul></ul></ul><ul><ul><ul><li>Stable disease with toxicity ~ 0.57 </li></ul></ul></ul><ul><li>3 month gain survival for stable metastatic breast cancer patient, no toxicity = 0.25 * 0.72 = 0.18 QALY </li></ul>Lloyd A et al, British Journal of Cancer (2006) 95, 683 – 690
    • 16. Price ≠ Cost <ul><li>NICE threshold around £30 000/ QALY </li></ul><ul><li>3 month survival gain gives 1/6 QALY </li></ul><ul><ul><li>Treatment (drug+nurse+pharmacy+doctor+..) </li></ul></ul><ul><ul><ul><li>< £5 000…………… </li></ul></ul></ul><ul><ul><li>Is it right to charge > £ 1 000/month for the drug? </li></ul></ul><ul><li>Saving the life of a tiny baby = 80 QALY </li></ul><ul><ul><li>So we can spend £ 2.4 million…….. </li></ul></ul><ul><li>Doing a hip replacement in an 80 year old? </li></ul>
    • 17. The future <ul><li>Value based pricing? </li></ul><ul><ul><li>Drug price = Y * QALY benefit </li></ul></ul><ul><ul><li>Would make Bevacizumab much cheaper than Trastuzumab for advanced breast cancer </li></ul></ul><ul><li>Drug trials </li></ul><ul><ul><li>3 end-points? </li></ul></ul><ul><ul><ul><li>Efficacy </li></ul></ul></ul><ul><ul><ul><li>Safety </li></ul></ul></ul><ul><ul><ul><li>Cost-effectiveness? </li></ul></ul></ul>
    • 18. Conclusion <ul><li>Can we afford all the new developments at current prices ? </li></ul><ul><ul><li>ONLY if we think it is the most important disease </li></ul></ul><ul><li>How can we reduce the health care costs without reducing progress? </li></ul><ul><ul><li>More efficient & effective health care systems </li></ul></ul><ul><ul><li>More efficient drug development   cost to Pharma </li></ul></ul><ul><ul><li>More efficient use of medicines   cost to payers </li></ul></ul><ul><ul><li>Price must reflect benefit   cost to payers </li></ul></ul><ul><ul><ul><li>Without  incentive to innovate and invest </li></ul></ul></ul>
    • 19. Conclusion <ul><li>How to make sure we get access to effective drugs ? </li></ul><ul><ul><li>Prospective, collaborative Correlative science </li></ul></ul><ul><ul><ul><li>Pharma </li></ul></ul></ul><ul><ul><ul><li>Academics </li></ul></ul></ul><ul><ul><ul><li>Pathologists </li></ul></ul></ul><ul><ul><ul><li>Regulators </li></ul></ul></ul><ul><ul><ul><li>Investigators </li></ul></ul></ul><ul><ul><ul><li>Statisticians </li></ul></ul></ul><ul><ul><li>Understand Health Economics </li></ul></ul><ul><ul><ul><li>Train Oncologists who understand Health Economics </li></ul></ul></ul><ul><ul><ul><li>Collect real data on costs and benefits, not estimates </li></ul></ul></ul>
    • 20. Make drug development AND drug use cost-effective

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