Determining Medicines Prices in Europe: Changes in France, Germany and UK


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The presentation summarises recent changes implemented or being discussed in pricing and reimbursement/HTA systems in France, Germany and the UK. In Germany and France, the emphasis of the recent reforms is centred around the evidence requirements and, in particular, the use of comparator and head-to-head trials. In the UK, however, VBP is about the weighting given to the evidence and the social value of a drug. Overall, emphasis is increasing on 'proving' innovation and/or an additional health benefit as a precondition for a price higher than competitors.

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Determining Medicines Prices in Europe: Changes in France, Germany and UK

  1. 1. Mechanisms for Setting Medicines PricesNew Trends in Europe ‒ Changes in France, Germany and the UK Jorge Mestre-Ferrandiz Nuevos procedimientos de fijación de precios y financión de medicamentos tras el RDL 16/2012 Cambrios en el sistema de fijación de Precios Madrid, 13 December 2013
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  3. 3. Conference Agenda 3
  4. 4. AgendaRecent and on-going changes in: • France • Germany • UKCommon themes 4
  5. 5. France• Current reforms being implemented in France are part of an on-going discussion around pharmaceutical regulation, prompted by what has been termed the “Mediator scandal”• Focuses on improving pharmacovigilance and pharmaceutical regulation• But also new requirements around comparators 5
  6. 6. France – Comparators• New regulations also include a decree changing the comparator requirement for new medicines introduced to the French market – this can be viewed as part of an on-going trend in France • Manufacturers are required to provide evidence demonstrating that the new drug has an additional benefit against an active comparator as well as placebo • The Transparency Committee is becoming stricter in its application of the SMR and ASMR criteria• Some uncertainties still exist around how comparator requirements will be implemented in practice 6
  7. 7. France – Ratings• Long history of SMR/ASMR rating • Determines copayments (SMR) and pricing (ASMR)• SMR: absolute medical value• ASMR: relative medical value• Possibility of integrating the SMR/ASMR rating into one index (relative therapeutic index: Index Thérapeutique Relatif, ITR)• Future role of economic evaluations – methods guideline published in October 2012 7
  8. 8. Germany• AMNOG represents a paradigm shift in the way new drugs launched in Germany are assessed and priced • Came into effect on 1 January 2011• The main difference pre- and post-AMNOG is the lack of free pricing• After nearly two years of AMNOG, some tweaks to the system – see later 8
  9. 9. Germany – AMNOG Process Source: Gerber et al. 2011 9
  10. 10. AMNOG – Timelines1. The manufacturer submits a comprehensive value dossier to the decision-making body, the Federal Joint Committee (GBA) – focusing on clinical / health gain and added value2. The GBA, the IQWiG (or another commissioned third party) has three months to determine the additional clinical benefit of the new drug relative to appropriate therapeutic alternatives (Early Benefit Assessment)3. The manufacturer then can comment on the review in a hearing process. GBA analyses the hearing comments received and, after another three months, passes a resolution as to whether or not the new drug has an additional benefit4. If a drug is categorised as having “no additional benefit”, it is priced according to similar drugs in the same therapeutic reference group5. If the drug provides an additional benefit, the GBA (or the IQWiG) assesses the extent of additional benefit proven, by patient group. The size of the additional benefit is categorised on a six point scale (a “major” improvement corresponds to a score of 1 while a “smaller benefit” corresponds to a score of 6)6. The manufacturer and the National Association of the Statutory Health Insurance Funds (GKV-SV) then negotiate a reimbursement price7. If no agreement is reached, an arbitration board has three months to determine a price 10
  11. 11. AMNOG – Key Issues (1)Comparator definition • The definition of the appropriate comparator is based on very formal requirements that sponsors cannot negotiate with the GBA • In most circumstances, if the comparator used does not correspond to the one selected by IQWiG/GBA, the drug will be deemed as having no added value and be reimbursed at the reference price. This has been one of the most important reasons for market withdrawals. 11
  12. 12. AMNOG – Key Issues (2)• Process is transparent• Some greater pragmatism from the decision body• Assessments can be mechanistic and formulaic• Price transparency to be implemented soon 12
  13. 13. UK – VBP (1)Value based pricing (VBP) is the pricing scheme that will replace the currentPharmaceutical Price Regulation Scheme (PPRS) in the UK from 1 January2014 • Decisions about what principles will be applied and how has not yet been decided • The Government will set a cost-effectiveness threshold structure that applies weights to the benefits provided by new medicines that determine the “value” of a new drugVBP operationalisation might imply: • Identifying the health gain and other attributes of the technology that are deemed to be of value • A means of measuring and valuing those attributes for each particular medicine • A way of aggregating the relevant benefits and costs • A decision rule to convert the overall measure of value into a maximum price the health care system would be willing to pay 13
  14. 14. UK – VBP (2)The Government has established which attributes of a medicine it believesdeliver value to society: • Improving health across the NHS • Tackling diseases with the greater “burden of illness” (BoI) • Demonstrating greater therapeutic innovation and improvements (TII) compared with other products • Demonstrating wider societal benefits (WSBs)The criteria to measure the value of each element will be decided by theGovernment: • The value provided by health gains most probably still will be measured by QALYs • BoI might be weighted by the severity of the disease • TII might reflect different dimensions, e.g. unmet need, rarity • WSBs might include the savings in the indirect costs of care borne by patients and their caregivers 14
  15. 15. UK – VBP (3)How and who will determine the appropriate value based priceof a new drug based its cost-effectiveness ratio still is unknownOther aspects of VBP that potentially could provide importantopportunities or pose significant challenges for industry are: • Stability of the new system • Transparency and confidentiality of price negotiations • Speed of assessment 15
  16. 16. UK – VBP (4)• Joint DH/ABPI statement (3 August 2012) ‒ number of points and principles that need to be taken into account in the new arrangements• Examples: • Our joint aim is to achieve a negotiated agreement for the new arrangements, including value based pricing • The Government and ABPI are committed to strengthening the UK environment for life sciences • …ensure stability and predictability in the framework for pricing of existing branded medicines…aiming for an agreement that will operate for five years • …important that there is a common branded medicines pricing policy across the UK 16
  17. 17. Common Themes• In Germany and France, the emphasis of the recent reforms is centred around the evidence requirements and, in particular, the use of comparators and head-to-head trials• In the UK, however, VBP is about the weighting given to the evidence and the social value of a drug• Overall, increasing emphasis is being placed on proving innovation and/or an additional health benefit in order to get a high(er) price (relative to comparators) 17
  18. 18. To enquire about additional information and analyses, pleasecontact Dr. Jorge Mestre-Ferrandiz at jmestre-ferrandiz@ohe.orgTo keep up with the latest news and research, subscribe to our blog, OHENewsFollow us on Twitter @OHENews, LinkedIn and SlideShareOffice of Health Economics (OHE)Southside, 7th Floor105 Victoria StreetLondon SW1E 6QTUnited Kingdom+44 20 7747 8850www.ohe.orgOHE’s publications may be downloaded free of charge for registered users of itswebsite.©2012 OHE 18