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