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Reimbursement were prices are negotiated based on value for the country as a whole, by using existing health technology as...
Health Technology Assessment (HTA) <ul><li>HTA  is a field of scientific research to inform policy and clinical decision-m...
Option: pan-Canadian HTA-based price negotiation <ul><li>HTA is widely practiced in Canada and reimbursement decisions in ...
Example – Blood Glucose Test Strips <ul><li>Over $330 million expended annually –  50% is for patients not using insulin  ...
Example – Blood Glucose Test Strips (c) VBP of test strips at cost-effectiveness threshold of marginal sub-group  (a) (b) ...
Be nefits – pan-Canadian HTA-based price Negotiation <ul><li>Reduce unnecessary spending – At least $150 million would be ...
Challenges – pan-Canadian HTA-based Price Negotiation <ul><li>Healthcare is a provincial/territorial responsibility and a ...
Conclusion   <ul><li>Reimbursement where prices of health technologies are based on the value they provide is desirable  <...
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WHAT IF: The entry of new pharmaceuticals was managed and their prices were negotiated based on value for the country as a whole, by using existing health technology assessment capacity?

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Chris. G. Cameron, CADTH

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WHAT IF: The entry of new pharmaceuticals was managed and their prices were negotiated based on value for the country as a whole, by using existing health technology assessment capacity?

  1. 1. Reimbursement were prices are negotiated based on value for the country as a whole, by using existing health technology assessment : Case Study using Blood Glucose Test Strips Chris Cameron, Health Economist, Canadian Agency for Drugs and Technologies in Health CHSRF iHEA Pre-Conference Symposium, July 11, 2011
  2. 2. Health Technology Assessment (HTA) <ul><li>HTA is a field of scientific research to inform policy and clinical decision-making around the incremental value, diffusion, and use of health technologies </li></ul><ul><li>Does the technology work, for whom, at what cost, and how does it compare with alternatives? </li></ul><ul><li>HTA can happen prior to widespread distribution (ex ante ) or after the technology has been widely adopted (ex post ) </li></ul>
  3. 3. Option: pan-Canadian HTA-based price negotiation <ul><li>HTA is widely practiced in Canada and reimbursement decisions in Canada are informed by HTA </li></ul><ul><li>HTA-based processes (e.g., Common Drug Review) in Canada can lead to implicit price negotiation </li></ul><ul><li>Some Canadian jurisdictions (e.g., British Columbia, Alberta, and Ontario) have implemented price negotiation processes linked to HTA </li></ul><ul><li>No pan-Canadian HTA-based price-negotiation process but bulk-purchasing alliance has been discussed </li></ul><ul><li>Other countries (e.g., United Kingdom) are considering adoption of HTA-based price negotiation (or value-based pricing) </li></ul>
  4. 4. Example – Blood Glucose Test Strips <ul><li>Over $330 million expended annually – 50% is for patients not using insulin </li></ul><ul><li>Top five class in terms of total expenditure in drug plans </li></ul><ul><li>Modest clinical benefits in patients not using insulin </li></ul><ul><li>~ $1/day in patients not using insulin </li></ul><ul><li>Frequent use (>1 per day) not cost-effective in patients not using insulin - incremental cost per QALY of $113,643 per QALY </li></ul><ul><li>Reduced price of strips or frequency (e.g., 1 or 2 per week) would improve cost-effectiveness </li></ul>
  5. 5. Example – Blood Glucose Test Strips (c) VBP of test strips at cost-effectiveness threshold of marginal sub-group (a) (b) Current pricing of test strips in Canada (dashed line) a) Diminishing marginal utility of SMBG HTA-based price reduction from $0.76 to $0.30 using would save drug plans >$150 million annually and not compromise the health of Canadians
  6. 6. Be nefits – pan-Canadian HTA-based price Negotiation <ul><li>Reduce unnecessary spending – At least $150 million would be saved annually on test strips alone </li></ul><ul><li>Increased access and unnecessary pressure </li></ul><ul><li>Improved health outcomes for Canadians </li></ul><ul><li>Reduce inequity across jurisdictions by leveraging buying power </li></ul><ul><li>Build-off existing HTA capacity </li></ul><ul><li>Standard and coordinated pricing approach </li></ul><ul><li>More capacity for stratified HTA assessments </li></ul><ul><li>Handle uncertainty at time of launch - managed entry agreements </li></ul><ul><li>Price can be tied to real-world assessment - ex post HTA </li></ul>
  7. 7. Challenges – pan-Canadian HTA-based Price Negotiation <ul><li>Healthcare is a provincial/territorial responsibility and a pan-Canadian approach would require coordination </li></ul><ul><li>Population and health system heterogeneity </li></ul><ul><li>HTA as currently practiced may not accurately reflect the full value (i.e. quality-adjusted life years (QALY) may not reflect full value) </li></ul><ul><li>No empirical cost-effectiveness threshold - a n explicit recognition of what constitutes good value in Canada is required </li></ul><ul><li>International reference pricing – manufacturers may be unwilling to reduce list price to value based price for fear of global leakage </li></ul><ul><li>Health technology assessment capacity in Canada </li></ul><ul><li>Expensive drugs for rare diseases </li></ul><ul><li>Impact on producers, innovation and spill over effects to the broader economy </li></ul>
  8. 8. Conclusion <ul><li>Reimbursement where prices of health technologies are based on the value they provide is desirable </li></ul><ul><li>HTA based price negotiation has the potential to reduce unnecessary expenditure, increase access, reduce inequities, and improve health outcomes of Canadians </li></ul><ul><li>Although there are challenges to overcome, a coordinated system of HTA-based price negotiation in Canada is feasible and could be built on existing processes, applied health research and HTA capacity in Canada </li></ul><ul><li>The negotiation body must be linked to or embody a research entity that can: </li></ul><ul><ul><li>develop managed entry agreements (e.g., accommodate uncertainty around value of health technology prior to widespread adoption) </li></ul></ul><ul><ul><li>perform or collect information regarding drug or health technology performance after adoption </li></ul></ul>

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