The document discusses a study investigating the accessibility and affordability of medicines in specialist medical care in the Netherlands. It provides context on key players in the supply chain and financing of these medicines. The study included interviews, literature reviews, surveys, and data analysis. It examines current expenditures on these medicines, how costs may develop, and ways to better ensure accessibility and affordability. The summary provides high-level information on the purpose, methodology, and focus of the study without copying significant text.

1. 1
Investigation of
the accessibility and affordability
of medicines
in specialist medical care
NEXT
june 2015

2. 2
1
Description of the policies
concerning SMC medicines
NEXTBACK
Introduction
References
Context
2
Supply chainContext
Description of the supply chain
and financing of medicines in
SMC
6
Recommendations
4
Findings
Results from the
qualitative part of
the investigation
5
Conclusions
3
Figures
Results from the
quantitative part of
the investigation

3. 3
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations
Understanding accessibility
As yet, nearly all patients have sufficient access to medicines
in specialist medical care (SMC). But will this always be the
case? And will healthcare remain affordable? What can the
key players in the healthcare system do to help? And what
are the bottlenecks and areas for improvement regarding
the assurance of the accessibility and affordability of SMC
medicines?
The Dutch Healthcare Authority (NZa) investigated these questions
from mid-March until June 2015. This was done through
interviews with the most important parties in the healthcare
system, literature review, surveys submitted to healthcare
providers and health insurers, and the analysis of data.
This interactive report is a rendition of that qualitative and
quantitative research, commissioned by the Dutch Ministry of
Health, Welfare and Sport (VWS).
Motivation
Objectives
Focus
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INTRODUCTION

4. 4
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Motivation
In 2014, the Ministry received the report
‘Accessibility of expensive cancer medicines,
now and in the future’. In this report,
the Dutch Cancer Society wrote that the
accessibility of expensive cancer medicines
is currently good, but could come under
pressure. This could be prevented by specific
measures related to the way the supply
chain is financed, among other things.
The Ministry wants to guarantee the
accessibility and affordability of expensive
medicines for patients. They have therefore
asked the Dutch Cancer Society to carry out
further research into the provision of cancer
medicines. At the same time, the Ministry
also requested that the NZa conduct
further research, without limiting itself to
cancer medicines and looking at the entire
(hospital) medicine market from its position
as market supervisor.*
Objectives
The following issues are of key importance
to the Ministry of VWS:
- How accessible and affordable are SMC
medicines?
- What are the threats to accessibility and
affordability?
- How has expenditure on SMC medicines
developed?
- How will these costs develop in years to
come?
- How can accessibility and affordability be
guaranteed more effectively?
The NZa was required to investigate:
- what the current financial situation
concerning SMC medicines looks like;
- how the various parties in the healthcare
system try to keep these medicines
accessible and affordable;
- the obstacles these parties encounter in
the process;
- what areas of improvement there are and
what possible measures can be taken.
Focus
The NZa focused its investigation on
medicines in SMC, especially medicines that
give rise to relatively high costs per patient.
In general, these are the medicines for
which hospitals can bill surcharges on their
regular rates, and which are referred to as
‘expensive medicines’, ‘orphan medicines’
and ‘coagulation factors’ in this report.
A list of all the medicines that were part
of this investigation has been included in
the appendix. In this report, the NZa refers
to ‘SMC medicines’. These medicines are
generally administered to patients in a
hospital environment. The investigation
also focused on the behaviour of parties
within the healthcare system; not least
the way in which (price) agreements are
reached. Special attention was paid to the
interactions between:
- healthcare provider and manufacturer;
- hospital and specialist;
- specialist and patient;
- healthcare provider and insurer.
INTRODUCTION
* The NZa carried out this investigation independently. To do so, it set up a careful investigation process, as described in the methodology included in this report. With this independence and level of care, the NZa
intends to present the results of its investigation as objectively as possible. There has been no intermediary alignment of the contents of the findings and recommendations with other ongoing investigations. It is
possible that the Dutch Cancer Society and the NZa will have different advice to offer in the areas where their investigations overlap.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

5. 5
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1
Context
Description of the policies
concerning SMC medicines
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

6. 6
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The accessibility and affordability of
SMC medicines
Who are the key players in the production, purchasing,
administration and reimbursement of expensive medicines?
What threats are there to the accessibility of these medicines?
And what funding policies apply to these medicines?
Context
Key players Threats Funding policy
- Medicine manufacturers
- Government
- Institutions for specialist
medical care (hospitals)
- Health insurers
- Patients/policy holders
- Physical inaccessibility
- Financial inaccessibility
- Patient selection
- Risk selection and insurance
premium differentiation
- Funding policy until 2012
- Funding policy from 2012
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
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dations

7. 7
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Medicine manufacturers
Medicines are produced and supplied by the pharmaceutical
industry. This industry consists of industrial companies in
the private sector, many of which are listed companies.
Since a recent wave of mergers and acquisitions, the vast
majority of these pharmaceutical manufacturers are globally
active. In order to produce and supply pharmaceuticals, they
are required to comply with a great deal of national and
international legislation and regulations.
Manufacturers decide for themselves which medicines to develop
and produce. They are also free to choose which market to supply
to. Presently, the most important markets are the US, the EU
and Japan, but there are many highly populated, fast-growing
economies that represent large potential markets.
Types of manufacturers
Manufacturers can be classified as: a) manufacturers that put
new medicines onto the market and b) manufacturers that
produce generic medicines. To a certain extent, the first category
of manufacturers has development (the invention of a new
mechanism of action) carried out by other parties. These parties
could be universities, research institutions or spin outs from
universities.
Generic medicines are ‘unbranded’ medicines that are made up of
the same active ingredients and formula as the original medicine
(brand/reference listed). The production/sale of a generic medicine
is only permitted if the patent on the original medicine has
expired, which is typically after approximately twenty years.
CONTEXT > KEY PLAYERS
Recovering investments
Manufacturers want to fully recover all of their costs. In addition,
they want to see some return on their investments (for their
shareholders and for future research). For this reason, they aim
to sell their medicines for a profit. After being approved, the
medicine may be sold.
The recovery of costs truly begins when a medicine becomes
available as part of the basic insurance package, because
only then does it become available to the majority of
patients. Recovery occurs mainly while the patent is still valid.
Manufacturers can extend the patent period by making changes
(often only minor) to the formula or indication. A new indication
requires the medicine to be re-registered.
Market dynamics
The development, research and production of medicines occur
in a dynamic market. This dynamism is partially a result of the
emergence of spin outs from universities or research institutions,
large-scale acquisition of companies (including the spin outs)
often by the larger medicine manufacturers, loss of patents
due to setting aside development of medicines, bankruptcy of
companies and high investment costs using venture capital from
investors who want a rapid return on their investments. These
developments have driven up costs.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
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dations

8. 8
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Government
In most EU countries the sales prices within the
pharmaceutical industry are regulated by legislation and
regulations. For many medicines, the Dutch government
determines the maximum price that the manufacturer can
ask from hospitals and pharmacies. The goal here is to reduce
costs for healthcare providers, in the hope that the resultant
savings will be transferred to insurers and policy holders/
patients in the form of lower rates and premiums.
Ministry of VWS
In the Netherlands the Minister of VWS can set maximum sales
prices using the ‘Pharmaceuticals Pricing Act’ (WGP).1
Much like
in other EU member states, this involves making a comparison
with reference prices in other countries (see box to the right).
In compliance with the WGP, the Ministry conducts biannual
investigations into whether there is any reason to reassess the
maximum prices.
The National Healthcare Institute (ZIN)
The ZIN makes (non-binding) statements (indications) about some
of the specialist medicines, the aim of which is to clarify whether
or not they should be included in insured healthcare. The Ministry
of VWS makes the final decision regarding what is included in the
basic insurance package.
The Dutch Healthcare Authority (NZa)
The NZa sets declaration titles and maximum rates for specialist
medical care, including medicines. Medicines that cannot
be funded with DBC healthcare products receive a separate
declaration title (add-on).
CONTEXT > KEY PLAYERS
Reference prices and countries
Most EU member states have a fixed system for determining
maximum selling prices. These systems often involve looking
at prices in other countries. This is also the case for the
Dutch system. The Minister of VWS (with the help of the
agency Farmatec) determines the maximum price that may be
demanded for a new medicine when it’s put on the market.
If the price requested by the manufacturer is higher than the
arithmetic mean of the prices in the four legally designated
reference countries (Belgium, Germany, France and the United
Kingdom), then this price is adjusted downwards. As a result,
the prices that the manufacturers suggest in other countries
or the prices that are determined by the authorities in these
countries have a direct effect on the maximum price in the
Netherlands.2
1 For outpatient medicines this is regulated indirectly using the Medicine Reimbursement
System (GVS). The maximum reimbursement that the insurer pays for a medicine is determined
using the GVS. However, this investigation is focused on the SMC medicines that are provided
by hospitals.
2 So the Minister does not determine the price that the hospital can charge to the health
insurer; that is the role of the NZa. See also the supply chain step 9.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
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9. 9
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SMC Institutions (hospitals)
Institutions authorised to provide specialist medical care3
are
allowed to supply SMC medicines to patients. Between 2012
and 2014 an increasing number of medicines were transferred
from the ‘pharmaceutical healthcare designation’ (outpatient
medicines) to the ‘medical healthcare designation’ and the
specialist medical care Budgetary Framework. This means that
only SMC institutions are currently permitted to supply these
medicines and receive reimbursement at the expense of the
Health Insurance Act (‘Zorgverzekeringswet’ or Zvw).
Expenditure
The table on this page shows the expenses of general hospitals
and UMC’s, including the share of expenditure for each item.
The table reveals that the average margins (differences between
turnover and expenditure) are relatively small. The SMC medicines
are categorised under ‘Materials’. In contrast to the expenditure
on, for example, equipment and accommodation, the costs
incurred for medicines are largely variable. After all, hospitals can
adjust purchasing to suit the number of patients being treated.
However, a large proportion of hospitals’ expenditures are ‘fixed’.
These are expenditures that do not depend on the amount of
healthcare that must be provided. This means that (in the short
term) a hospital cannot realise savings by using less equipment,
but it can realise savings if it administers less medicines or treats
less patients with expensive medicines.
The integral funding system gives hospitals a choice as to how
they spend money and makes them responsible for expenditure
and operating risk. In general, the hospitals’ expenditures on
inpatient medicines compete with all the other expenses. From a
CONTEXT > KEY PLAYERS
financial perspective, there is no difference between an increase
in the price of medicines and, for example, an increase in VAT
or in the prices of medical equipment, buildings and interest
on loans. Since 2015, an important new expenditure item has
been added: hospitals now have to negotiate the wages of their
consulting specialists.
Source: Dutch Hospital Data, Hospital indicators 2012
3 Under the Healthcare Institutions Approval Act (WTZi)
4 The expenses do not include expenditure for consulting specialists. As of 2015 this
expenditure will also be included under personnel expenses.
Hospital expenditure in 2012 (€ Millions))
Proportion of total expenditure (%)
Total General University
hospitals hospitals
Personnel4
11.786 / 58% 7.645 / 55% 4.141 / 62%
Materials 6.036 / 30% 4.226 / 31% 1.804 / 27%
(inc. medicines)
Maintenance, 533 / 3% 335 / 2% 198 / 3%
electricity, etc.
Asset depreciation 1.621 / 8% 1.232 / 9% 389 / 6%
Interest 443 / 2% 337 / 2% 106 / 2%
Total expenses 20.414 13.775 6.639
Turnover 20.650 13.799 6.852
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

10. 10
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SMC institutions (hospitals)
Income
The majority of SMC institutions’ income comes from
reimbursements from health insurers. Income is now almost
completely dependent on declared production. So unlike in the
past, the institutions no longer receive one fixed annual budget.
Instead, they are paid based on healthcare output (i.e. for each
‘Combined Diagnosis and Treatment Healthcare Product’ or
‘DBC’). In turn, the price per DBC is dependent on the agreements
that have been made with health insurers. The transition from
traditional funding to this system of performance-based funding
was completed in 2013.
Hospitals can deal with the costs of SMC medicines in various
ways. One way is to try to lower purchasing prices (for example,
by negotiating lower prices, limiting provision or cutting other
costs). The other way is to increase their income, for example
by reaching different agreements with insurers and/or supplying
more (paid) production.
The reimbursement of SMC medicines can proceed via two
channels:
1. Institutions can declare medicines as part of an integral
healthcare product, in compliance with DBC prices that have
been agreed with insurers.
2. Institutions can declare some medicines separately. A separate
declaration title for such a medicine is known as an add-on.
CONTEXT > KEY PLAYERS
Add-ons
Medicines for which add-ons are available and for which
the NZa has established a maximum price are listed in the
NZa provisions and rates table. Until 2015, the criterion for
admission to the add-on list was that the average annual
expenditure on a medicine per patient was more than € 10,000.
From 2015 it is possible for less expensive medicines to be
admitted if healthcare providers and/or health insurers submit
a request. They do that if they are of the opinion that it is not
desirable to fund a specific medicine using the average rate
from the integral healthcare system (a DBC).
+
Medicine as part
of a DBC healthcare
product
Medicine as an
add-on in a separate
declaration
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
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11. 11
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SMC Institutions (hospitals)
Influencing income
The majority of hospitals’ and UMC’s turnover comes from
healthcare services that they declare through the Health Insurance
Act (Zvw). If the ‘Zvw turnover’ of all hospitals and UMC’s
rises above a pre-determined level, the ‘Budgetary Framework
for Healthcare’ (BKZ), then the government can intervene. The
Ministry of VWS then instructs the NZa to remove a part of
the individual turnover from each institution, so that the total
turnover drops to the agreed level. This charge is known as
‘the macro-management instrument’. The Ministry’s macro-
management instrument only applies to the Zvw turnover and has
not yet been applied to SMC.
Turnover limit from insurers
Health insurers, hospitals and UMC’s follow the Administrative
Outline Agreement (BHA), agreed upon by the Ministry of
VWS, the Dutch Hospital Association (NVZ), the Netherlands
Federation of University Medical Centres (NFU), Zelfstandige
Klinieken Nederland (ZKN) and Zorgverzekeraars Nederland (ZN).
This agreement states, among other things, that expenditure by
hospitals and UMC’s may not rise above 1 percent per year for
the period from 2015 to 2017. For 2012 and 2013 the limit was
2.5 percent per year, and for 2014 it was 1.5 percent per year. As
a result of this growth limitation, health insurers and hospitals
often agree upon a turnover limit; a contractually established ban
on declaring more than an agreed amount per year.
CONTEXT > KEY PLAYERS
No financial incentive for expensive drugs
When a hospital or UMC uses or provides SMC medicines, the
declarable turnover rises. This is profitable if the marginal costs
are lower than the marginal returns. But because of the turnover
limit, the marginal returns (for example, from an expensive add-
on) can be zero, while the marginal costs of expensive medicines
are high – especially the costs of purchasing those medicines. As
a result, the treatment of more patients does not result in more
reimbursement, but still costs money. Considering the presence
of the turnover limit, it could be financially safer to provide
more treatments with lower variable costs. The contribution
to the covering of fixed costs is then comparatively higher. A
turnover limit provides a financial incentive to stop providing SMC
medicines after reaching the limit.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
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Health insurers
Health insurers have a directorial role within the healthcare
system. Every Dutch citizen is required to have insurance and
must have a policy with one of the twenty-six health insurers.
In turn, these insurers are required to accept anyone who
signs up as a customer (obligation to accept).
Expenditure
The Health Insurance Act (Zvw) requires insurers to purchase or
reimburse sufficient healthcare services for their policy holders.
This ‘duty of care’ does not apply to supplementary insurance.
Most SMC medicines are included in basic insurance packages and
so insurers are obliged to purchase them as (part of) specialist
medical care.
Insurers bear a certain amount of risk due to their healthcare
expenditures. If they purchase or reimburse more than they earn
in revenue, then they make losses that can only be compensated
by increasing rates, decreasing expenditure or depleting reserves.
By increasing its premiums an insurer worsens its position in
the insurance market and policy holders are then more likely to
choose to move to a competitor.
CONTEXT > KEY PLAYERS
Revenue
Insurers are permitted to make and distribute profits, although
most of them are not profit-driven. Requirements set by De
Nederlandsche Bank (DNB) demand that they keep a minimum
amount of reserve that must, in principle, consist of initial capital
and retained profits. Insurers earn revenue from three sources:
nominal premiums (directly from policy holders), additional
payments (in the form of deductibles and excess) and risk
equalisation payments determined by the government (see next
page). Basic insurance does not require payment of excess for
SMC. However, all SMC, including SMC medicines, is subject to
the legally required deductible.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

13. 13
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Health insurers
Risk equalisation
The government’s Health Insurance Fund distributes an
‘equalisation contribution’ to insurers annually, based on rules
and criteria drawn up by the National Healthcare Institute. The
Minister of VWS can change these rules or have them changed,
and in February 2015 the Minister announced that this was to be
done, particularly for patients with chronic diseases.5
However, it
has yet to be seen how this adjustment will take shape.
The characteristics of policy holders, including their health
characteristics, are essential to the determination of the size of
the equalisation contribution. When a policy holder incurs high
healthcare costs over several consecutive years, this also has an
effect. For example, insurers receive a lower contribution if they
have a relatively high number of young, healthy, highly educated
customers with high incomes.
A large group of medicines, which includes oncolytics and orphan
drugs, is currently considered to represent unpredictable levels
of risk. For this reason, expenditures on these medicines are part
of the so-called ‘fixed healthcare costs’, for which an insurer only
takes a limited risk and receives a risk equalisation.6
Risk equalisation works using ‘macro-provision sums’, for
example for specialist medical care, mental health care and other
services such as outpatient pharmacies and healthcare provided
by general practitioners. These macro-provision sums (mpb’s)
assume predictable healthcare costs and represent the upper limit
of the equalisations. As such they are more or less the insurers’
equivalent of the Budgetary Framework for Healthcare that
applies to healthcare providers.
CONTEXT > KEY PLAYERS
The main difference is that healthcare providers may be charged
a fine if their turnover exceeds the Budgetary Framework for
Healthcare. Even though health insurers do not have to pay a fine
when they exceed the macro sums, they still have to supplement
their shortages, for example by spending their reserves or
Extending packages without increasing
macro-provision sums
It is possible to broaden the basic insurance package (for
example, by including a new and expensive medicine) without
increasing the mpb’s. To do so insurers need to take a closer
look at other expenditures and take steps to change them.
Broadly speaking, there are two ways to do this:
1. Increase the nominal premium. (Unlike for hospitals,
there is no regulation that limits the collective turnover of
insurers. Only the risk equalisation has a maximum limit.)
2. Limit expenditure (on medicine for example). This can be
achieved by, for example:
- establishing a turnover limit;
- encouraging healthcare providers to behave in a certain
way when prescribing medicines;
- negotiating with manufacturers;
- cutting back on other expenditures, although this
increases the danger of applying disguised risk selection.
5 Ministry of VWS, Letter ‘Quality pays’ (6 February 2015)
6 Parliamentary letter ‘Risk equalisation 2016: improving compensation for chronic diseases’ 16
June 2015.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
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Patients/policy holders
All inhabitants of the Netherlands are required to have
insurance. Adult policy holders (>18 years old) must pay a
nominal premium to their health insurer. People with lower
incomes can receive compensation (healthcare benefit),
regardless of actual healthcare consumption.
Premium and deductible
In principle, all basic policies chosen by policy holders provide
the same cover; at most there is a difference in the number of
healthcare providers. Policy holders are permitted to choose
their own health insurer and can change insurer once a year. The
insurance market is competitive.
In addition to paying a nominal premium policy holders and
their employers also pay an income dependent premium. This
is then used by the Health Insurance Fund to finance the risk
equalisation and healthcare for minors in the Netherlands. Policy
holders (not including minors) who actually receive healthcare
are required to pay the initial costs themselves. This compulsory
deductible applies to all specialist medical care but does not apply
to certain kinds of healthcare, for example general practitioner
care, obstetric care, maternity care or district nursing. In 2015
a compulsory deductible of € 375 applies. Policy holders can
arrange a voluntarily increase in this deductible with their insurers
up to a maximum of € 875 in exchange for a discount on their
nominal premium.
CONTEXT > KEY PLAYERS
Worried because of low income?
There is some debate in the Netherlands regarding whether the
compulsory deductible could cause people with lower incomes
to avoid or postpone necessary healthcare. Although this is
possible for general care, it is less likely for specialist medical
care. After all, it is probable that patients being referred for
treatment with expensive medicines have already been receiving
secondary care for some time, and have therefore already paid
their deductibles. In such cases there are then no additional
costs associated with the use of expensive medicines.
Only in cases where patients receive treatment for two
successive years are they required to pay the deductible in the
second year. However, there is no indication that this causes
patients to refuse further treatment. Neither are their personal
expenses affected by the general increase in expenditure on
healthcare. Instead, at most policy holders (including patients)
are affected indirectly, by a potentially higher nominal premium
or a higher income dependent premium. However, for a large
proportion of this group of policy holders a higher nominal
premium leads to a higher deductible. And a higher income
dependent premium is usually accompanied by a set of tax
measures that make the net effect on an individual difficult to
predict.
So far all increases in healthcare costs have largely been
reimbursed collectively (and to a lesser extent, by increased
deductibles). The policy holders bear the smallest financial
risk. Their main concern is then primarily whether a specific
expensive medicine is included as part of their basic insurance. A
soon as this is the case, and they have also received reasonable
notification of the fact, they are theoretically entitled to it.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
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Physical inaccessibility
Important potential threats to the physical accessibility of
SMC medicines are problems with production and (temporary)
problems with distribution. The unavailability of medicines
because they have not yet been developed is also a problem. For
example, at the start of the 21st century there was a shortage of
Enbrel, a cheaper alternative to the arthritis medicine Infliximab
(Remicade). This made it necessary to introduce new regulations
for the reimbursement of Remicade.
Physical inaccessibility due to production and/or distribution
problems
The tendency to focus strongly on the use of generic medicines
(especially for outpatient prescriptions) leads to high levels of
price competition and low margins. This results in the relocation
of production, which in turn threatens distribution and
availability. The Royal Dutch Association for the Advancement
of Pharmacy (KNMP) recently informed the government that the
threat of shortages in the availability of medicines is increasing.7
According to the KNMP, supply problems have been encountered
with more than 500 medicines. This is especially applicable to
medicines that are supplied via the community pharmacy. The
KNMP states that the causes are lower stock inventory levels
and the closure of production facilities in an attempt to increase
efficiency.
CONTEXT > THREATS
Physical inaccessibility due to unavailability
For some conditions effective medicines are simply not yet
available. For example, until recently this was the case for cystic
fibrosis and hepatitis C. The EU could also provide incentives
focused on solving these issues.
These examples describe the difference between two forms of
physical inaccessibility. The first form arises from temporary
production or distribution problems and the second form is the
result of insufficient research and development. It is conceivable
that research and development of innovative medicines would
stagnate if it was not possible to recuperate the money invested
in the process.
7 Source: KNMP
Conceivable stagnation
Sometimes physical inaccessibility is the result of insufficient
research and development. It is conceivable that research and
development of innovative medicines would stagnate if it was
not possible to recuperate the money invested in the process.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
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Financial inaccessibility
For the vast majority of policy holders SMC medicines are only
financially accessible if they are covered as part of the basic
insurance package. Presently, nearly all SMC medicines which are
required are available through basic insurance.8
Two years ago a
concept report authored by the ZIN, at that time still called the
CVZ, suggested the exclusion of two orphan drugs from the basic
insurance package. This did not lead to the exclusion of these
medicines and the advice was changed.
In the Netherlands there are no hard criteria on the basis of which
a medicine can be included or excluded from the basic package.
In a report published in 2006 entitled ‘Sensible and sustainable
healthcare’, the Council for Public Health and Healthcare (RVZ)
proposed setting a limit of € 80,000 per quality adjusted life
year.9
This method was disputed and the minister chose not to
accept the recommendation.
When new SMC medicines are approved for the market, they are
then immediately incorporated in the basic insurance package.
This is done based on the implicit assumption that they comply
with the state of the art in science and practice. In principle, they
are then directly available to patients (see step 7 in the supply
chain). The Dutch Healthcare Institute carries out a risk selection
for approved SMC medicines on the basis of which it determines
which medicines are eligible for further assessment regarding
their status in the package.
CONTEXT > THREATS
It is also possible for an individual patient to have limited
financial access to a medicine that has been included as part of
the basic insurance package. For example:
- if a health insurer states that the policy holder does not meet
the conditions of his or her policy.10
A difference in opinion
may arise regarding policy conditions. In such cases the Health
Insurance Complaints and Disputes Foundation (SKGZ) or a civil
court can be asked to make a statement;
- if the health insurer tightens the criteria based on which
patients become eligible for treatment or remain eligible
for further treatment. This is known as ‘management for
appropriate use’.
8 There are four substances included in the list of add-on medicines that are not included in
basic insurance. These substances are collagenase clostridium histolyticum (Xiapex®),
belimumab (Benlysta®), catumaxomab (Removab®) and mifamurtide (Mepact®). These
medicines do not comply with the state of the art in science and practice criterion and so they
cannot be included in the basic insurance package.
9 ‘Sensible and sustainable healthcare’, RvZ, Zoetermeer, 2006.
10 For pharmaceutical healthcare designations (outpatient pharmacy) health insurers are
permitted to implement preferential policies under the Health Insurance Decree. This means
that the health insurer may choose to only reimburse the cost of medicines that it has listed in
the policy conditions. For example, this could be a generic medicine and not the original, unless
the doctor indicates that the use of the original is medically necessary. Similar preferential
policies are not permitted for SMC medicines that are part of the designation ‘medical
healthcare’.
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Patient selection
There are various forms of patient selection:
- A healthcare provider refers patients or groups of patients to
other healthcare providers.
- A healthcare provider places patients or groups of patients on a
waiting list.
- A healthcare provider stops admitting patients or groups of
patients.
- A healthcare provider cancels or postpones treatments, with or
without discussion with the relevant policy holders.
Patient selection is a genuine problem for policy holders. The term
‘postcode healthcare’ is often seen in the media. This refers to the
phenomenon whereby patients who are dependent on treatment
with expensive medicines are unable to receive this treatment in
certain hospitals or UMC’s.
Around 2000-2001, the fact that some groups of patients were
being rejected or referred to other healthcare providers led the
government to change its funding policies and to introduce the
policy rules ‘Expensive medicines’ and ‘Orphan drugs’.
CONTEXT > THREATS
Why select patients?
The current DBC system is based on average expenditure. As
a result, it is financially beneficial to healthcare providers to
exclude patients who require relatively expensive treatment.
The same situation can also occur with medicines if healthcare
providers fail to negotiate lower prices. Turnover limits,
pressure on prices, the macro-management instrument and
selective contracting are all incentives that can stimulate
patient selection. In 2012, in order to counteract this selection,
separate declaration titles (add-ons) that are not connected to
the reimbursement of hospital treatment were developed which
should theoretically cover the costs of SMC medicines.
The decision to concentrate healthcare is not a direct incentive
for patient selection. This concentration does lead to referral
(and the associated travel times and expenses), but the referral
should be compensated for with higher quality treatment. One
obvious side effect of the concentration of healthcare is that the
financial risks associated with expensive medicines (the fact that
they crowd out other forms of spending) are concentrated at a
limited number of healthcare providers.
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Risk selection and differentiation of
premiums
In the insurance sector ‘risk selection’ or ‘adverse selection’ refers
to the avoidance of customers with a high risk of making claims
or customers who are already making claims. In the Netherlands
differentiation of premiums is not permitted. Health insurers
have an obligation to accept all potential customers. Even so, it
is possible for limited forms of premium differentiation and risk
selection to arise.
Limited risk selection
The risk equalisation system is not perfect. As a result it is
still advantageous for an insurer to avoid policy holders with
a predictably (relatively) high risk of making claims whilst
attempting to attract customers with lower risk. This does not
involve direct risk selection (rejecting ill policy holders) but rather
marketing drives designed to recruit customers with a beneficial
risk profile. The NZa is currently investigating risk selection by
health insurers and will publish its results later in 2015.
CONTEXT > THREATS
Differentiation of premiums
In 2006 differentiation of premiums occurred in the private
health insurance sector; for example, premium prices were higher
for older policy holders. Presently, premium differentiation is
only possible through offering various policies with different
conditions. It is forbidden to demand varying premiums for the
same policy. Recently, cheap policies with limited healthcare
provision have come under the spotlight. These could be seen as
showing a limited form of premium differentiation. Customers
who took out more expensive policies were allowed to go straight
to the UMC.
These variations between policies are also possible with regards to
SMC medicines. Patients who are dependent on certain medicines
are more likely to choose a more expensive policy if it includes
the hospitals that provide these medicines. As long as insurers are
able to identify potential customers who are more likely to use
these expensive medicines, then there is a risk of limited premium
differentiation occurring. However, as yet there are no indications
that this is happening.
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Funding policy until 2012
Until 2012, healthcare providers received an average
reimbursement in their healthcare budget. They did not
consider this to be sufficient in view of the rising cost of
medicines. As a result patients did not have the same level of
access to expensive medicines in all hospitals. The NZa wanted
to curb patient selection, and in 2001 it introduced the policy
rules ‘Expensive medicines’ and ‘Orphan drugs’ in an attempt
to do so. This was ‘open-ended regulation’ (with no maximum
limit), which allowed hospitals to have expenses reimbursed
retroactively.11
The government:
- provided customised reimbursement: health insurers were
able to offer healthcare providers reimbursement of 80%
of their purchasing costs through the budgeting system.12
The supplementary reimbursement only applied to a list of
medicines that met specific cost requirements.13
- classified the budget reimbursement for insurers in the context
of equalisation14
as ‘fixed expenditure’. Insurers only take
limited risks with these expenses.
Nine consequences of the policy rules
‘Expensive medicines’ and ‘Orphan drugs’
1. Rising costs
Now that hospitals and insurers no longer had to take the significant
financial risks previously associated with the medicines on the list,
they also had less incentive to limit their distribution. As a result,
costs rose and were covered by the Budgetary Framework for
Healthcare (BKZ).
CONTEXT > FUNDING POLICY
2. More budget discounts
The increase in expenditure on expensive medicines led to an
increase in healthcare expenditure (more than the budget) and was
also partially responsible for the discounts imposed upon healthcare
providers.
3. Higher premiums
Considering that the additional funds required for the BKZ had to
come from somewhere, this has also partially contributed to the
increase in expenditure. In general, the increases in expenditure on
healthcare have led to higher insurance premiums and higher taxes.
4. Counterproductive incentives
In some cases and for some medicines it was suddenly more
profitable for insurers to provide medicines (that were on the list)
via the hospital instead of providing a cheaper equivalent from the
community pharmacy. Within hospitals it was also more profitable to
use ‘listed medicines’ rather than a cheaper alternative.15
11 This was not the first ever measure designed to guarantee access to expensive medicines:
earlier ad-hoc regulations had been drawn up to deal with taxoids and HIV inhibitors, among
other things.
12 Initially, the maximum was 75% and hospitals and insurers could negotiate. Later this was
changed to fixed percentage.
13 This was independent of approval for the basic insurance package: in all cases the medicines
were already available as part of the package (pre-2006: ZfW).
14 Only applied to health insurance funds until 2006.
15 Moreover, there are very few alternatives to most expensive medicines.
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Funding policy until 2012
5. Improper use
Furthermore, medicines were often placed on the list for a specific
indication (and not for other indications). This connection with the
indication was probably not always strictly adhered to (improper
use).
6. Permanent list
Despite the criteria, the list suffered from ‘one-way traffic’:
medicines that were placed on the list were never removed in
practice. Not even if these medicines no longer met the policy rule’s
financial criteria (such as a minimum macro-turnover and minimum
expenditure per treatment).
7. Desirable position
For manufacturers of medicines, getting a medicine onto the list was
nearly as important as getting it approved for inclusion in the basic
insurance package.
8. Collective lobbying
It was not long before a collective lobby involving healthcare
providers, medicine manufacturers and patient groups was formed,
with the goal of adding more medicines to the list. The government
did not offer effective resistance.
9. Bureaucracy
At the same time, the list also involved a large amount of
bureaucracy.
CONTEXT > FUNDING POLICY
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Funding policy from 2012
An add-on is a declaration title that can be declared by a
SMC institution, independent of (or as a supplement to) a
DBC healthcare product. Add-ons are intended as a way to
compensate large differences in expenditure within DBC
healthcare products. In the current DBC system there are
add-ons for medicines and for intensive care (IC). When we
refer to add-ons in this document, we are referring to SMC
medicines (and their declaration titles).
The repeal of the budgeting system (from 2012) also meant the
repeal of the policy rules ‘Expensive medicines’ and ‘Orphan
drugs’. Add-ons represent an alternative to these policy rules,
within the performance based funding system (based on DBC’s).
Add-ons were initially limited to the medicines that were subject
to the earlier ‘Expensive medicines’ and ‘Orphan drugs’ policy
rules.
From 2012 the list was expanded to include medicines that cost
more than € 10,000 per patient per year. The Minister of VWS
also decided to add specific medicines to this add-on list. In the
meantime, the criteria for adding medicines to the add-on list
have been extended (from 2015). Healthcare providers and health
insurers now negotiate whether the price of a medicine should
be reimbursed as part of the rate for the treatment or separately
as an add-on. The goal of separate reimbursement of expensive
medicines is the prevention of patient selection (just like the
goal of the policy rules). Several of the consequences that were
mentioned for the funding policy until 2012 (especially 4 to 9) are
still at least partially applicable to current policy.
CONTEXT > FUNDING POLICY
The turnover due to add-ons is no longer unlimited and is also
governed by the macro-management instrument. In addition,
insurers and hospitals can agree on a turnover limit. For insurers,
add-ons are partially included under expenditures that involve
a degree of risk in the risk equalisation. Costs incurred for
oncolytics and orphan drugs do not involve any risk for health
insurers, since the government largely reimburses those costs. The
other products do involve a certain degree of risk.
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2
Supply chain
Description of the
supply chain and financing
of medicines in SMC
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SMC medicines in 13 steps
What route do SMC medicines have to take before they
become available on the market? What are the most
important parties that deal with the medicine in the process?
And how and at what stage in the supply chain do these
parties interact with one another?
Supply chain
octrooi
Dutch Healthcare Institute
Ministry of VWS
NZa
STEP 1 STEP 2
STEP 10 STEP 11 STEP 12
policy
STEP 7
STEP 3 STEP 4 STEP 5
STEP 6STEP 8STEP 9
+
ADD-ON
STEP 13
Universityt
Manufacturer
Hospital Health insurer
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STEP 1: The search for molecules
The pharmaceutical industry (hereinafter referred to as:
industry) researches, manufactures and markets medicines.
The research phase is preceded by research into a disease
process and a medicine’s mechanism of action. This research
is often carried out by universities and research institutes
that receive funding from charities (such as the Dutch Cancer
Society or the Kidney Foundation) or the government. In
addition, the EU also grants subsidies for the development of
medicines.
Horizon 2020
This is an EU programme aimed at stimulating research and
innovation. Its goal is to put Europe in a strong and competitive
position globally. It is the commission’s intention that this will
create economic growth and job opportunities. Horizon 2020
started on 1 January 2014 and is the successor of the Seventh
Framework Programme (KP7). Its total budget for the period
2014-2020 is € 80 billion, 2 percent of which is to be used
for research into new medicines under the name Innovative
Medicines Initiative 2 (IMI2).
SUPPLY CHAIN
Innovative Medicines Initiative (IMI2)
This is a partnership between the European Union (represen-
ted by the European Commission) and the European pharma-
ceutical industry (represented by the European Federation of
Pharmaceutical Industries and Associations, of which the Dutch
industry association Nefarma is a member). The European Uni-
on and the pharmaceutical industry will each invest € 1.725
billion in the collaboration from 2014 to 2020. The goal of IMI2
is to speed up the development of innovative medicines and
make them more widely available. IMI2 is helping to strengthen
cooperation between involved parties; from universities and
industry to small and medium-sized enterprises, patient groups
and the government / market regulators. IMI2 is also financing
‘The European Lead Factory’; a platform for the development of
promising medicines. The non-profit organisation TI Pharma is
this platform’s organiser.
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STEP 2: Patent application
Once a molecule has been shown to work, pharmaceutical
companies (‘the industry’) apply for a patent. In other words,
they establish that they are its legal, intellectual owner. They
then proceed to develop the molecule into a medicine. This
also involves patent applications; for example, on the way
in which the medicine is made or on the form in which it is
administered.
SUPPLY CHAIN
Conditional protection
A medicine can be patented in various forms. From the basic
molecule up until the medicine is put on the market in a specific
form and in specific packaging. Two conditions are crucial when
applying for a patent. Firstly, a new medicine or a new way of
producing a medicine must be involved. Secondly, the medicine or
method must have shown some practical results. The government
uses these conditions to encourage entrepreneurs to invest in
innovative and useful medicines. The granting of a patent is a
prerequisite for the process of getting a medicine approved for the
market.
In practice, patents for medicines are applied for by the industry.
Once a patent has been granted, the party it has been granted
to becomes the owner of the associated knowledge, products
and methods. This prohibits other parties from earning money
from the patented product. In Europe this legal protection from
competition is valid for a maximum of twenty years, starting from
the application date. Patents on pharmaceutical products and
on production methods can be extended by five years with the
Supplementary Protection Certificate (SPC).
However, the period during which the industry can profit from
a given medicine is actually shorter than 25 years. Patents are
usually requested long before a medicine’s introduction to the
market is requested and approved. In reality, manufacturers
have less time to recuperate their investments and make a profit.
According to industry associations representing manufacturers of
pharmaceuticals, the average time between the approval of an
original medicine for the market and the licensing of a generic
medicine is eight to ten years. For the medicine Glivec (chemical
name: imatinib) and its generic equivalent Imatinib this period
was indeed eight years. Sometimes it is longer. For example,
market approval was granted to two biosimilars of the medicine
Infliximab fourteen years after the original Remicade (chemical
name: infliximab) was granted access to the market.
20 year patent > 5 year extension
PATENT ABC
PATENT
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STEP 3: Research
The development process from molecule to medicine requires
preclinical research using animals and clinical trials with
human volunteers. The industry determines the hospitals
in which the clinical research takes place. A medicine may
only be approved for release onto the market after three
research phases have been properly completed (see step 4). In
addition, after release of the medicine research continues to
determine whether there are any unexpected side effects or
interactions with other medicines.
SUPPLY CHAIN
Successive clinical research phases
1. Research into the correct dosage of the medicine with small
groups of healthy volunteers. What dosage is tolerable,
how is the medicine absorbed into the body and how is it
excreted?
2. Research into the effectiveness of the medicine with a
relatively small number of patients. What is the most
effective dosage that can be safely administered? How does
the reaction of the patients to the medicine differ from their
reaction to a placebo?
3. Research into side effects and the correct dosage for the
medicine. How effective is the new medicine compared to
other medicines?
4. Research into unexpected side effects or unexpected
interactions with other medicines. At this stage the medicine
is already on the market. This phase is focused on the
patients who are using the medicine.
Therapeutic indication
Every research project focuses on a specific group of patients.
They have certain characteristics, including a clearly definable
disease. The group on which the research is focused is also
the group for which the medicine will eventually be released
onto the market (see step 4). For example, the industry could
receive a marketing authorisation for a medicine targeting
‘patients over 18 years of age, who are receiving tertiary care
for metastatic breast cancer’. This is known as the medicine’s
‘therapeutic indication’.
Research phase 1
Research phase 2
Research phase 3
Research phase 4
+ = ?
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STEP 4: Marketing
authorisation application
After the required preclinical and clinical research phases the
medicine is eligible for marketing authorisation. The industry
can choose three paths that lead to a marketing authorisation
(also known as ‘registration’). These are the national, the
centralised and the decentralised procedures.
The centralised procedure is obligatory for biotechnologically
produced medicines and for medicines that are designed to
treat, among other things, cancer, AIDS, neurodegenerative
diseases and diabetes. In other cases, developers of medicines are
permitted to choose which procedure to follow. For certain kinds
of medicines, exceptions are applicable and procedures can differ.
SUPPLY CHAIN
- DCP
- Mutual recognition
procedure
National
procedure
Centralised
procedure
Decentralised
procedure
Exceptions
applicable to
procedures
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STEP 4: Marketing
authorisation application
The procedures
1. The national procedure
The industry can apply for an authorisation for the Dutch market
by submitting a registration dossier to the Medicines Evaluation
Board (CBG). The CBG is an independent administrative body
associated with the Ministry of VWS. It evaluates the function,
risks and quality of the medicine and then decides whether
the beneficial effects sufficiently compensate for the potential
drawbacks. If that is the case, the CBG then grants a marketing
authorisation. This market authorisation is only valid in the
Netherlands and is not based on an authorisation for the same
medicine from another EU/EER member state.
2. The centralised procedure
The industry can also apply for market authorisation that is valid
for the entire EU, including the Netherlands. For this procedure
the applicant must submit its registration dossier to the European
Medicines Agency (EMA) in London. The dossier is then evaluated
by the EMA’s medicines evaluation committee, the Committee
for Medicinal Products for Human Use (CHMP). This committee
presents its recommendations to the European Commission,
which is responsible for the market authorisation. Finally, the
committee makes a binding decision.
SUPPLY CHAIN
The evaluation committee
All European member states are represented in the CHMP. The
committee appoints two reporters for each medicine. The CHMP
members operate in their personal capacity and have a bridging
role between the European and national systems. In the
Netherlands the Dutch members of the CHMP are accountable
to the CBG.
3. The decentralised procedures
The third route that the industry can choose has two variants, both
of which are designed to lead to European market authorisation
– albeit without the authorisation being requested through the
central European body. The first variant is actually referred to as
the ‘decentralised procedure’ (DCP) and in this case the applicant
has not yet received any authorisations from any member states.
Using the DCP, it is possible for an applicant to receive a market
authorisation that is valid in multiple member states.
The second variant is known as the ‘mutual recognition
procedure’. An applicant using this procedure already has a
market authorisation from at least one member state. This
applicant submits a request to other countries via the CMDh (a
European coordinating body, see box) with a view to persuading
them to follow the example of the ‘Reference Member State’
(RMS). The member states are thus asked to approve the
medicine, including the Summary of Product Characteristics, the
patient information leaflet and the labelling text.
The coordinating body
The Coordination Group for Mutual recognition and
Decentralised procedures (CMDh) is the European coordinating
body responsible for the proper functioning of the mutual
recognition and the decentralised procedures. The CMDh is part
of the Heads of Medicines Agencies (HMA).
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STEP 4: Marketing
authorisation application
Exceptions applicable to procedures
For orphan drugs
Orphan drugs are medicines for ‘rare diseases’: life threatening
or chronically debilitating disorders that affect a maximum of five
out of ten thousand EU citizens. At 250,000, the average number
of patients suffering from each disease is relatively small. Under
normal market conditions the development and marketing of
medicines for such a small number of people is not interesting
for pharmaceutical companies. Nevertheless, the EU wants these
medicines to be developed and so it provides various incentives.
For example, pharmaceutical companies that both focus on
the development of medicines for small groups of patients and
choose the centralised procedure for market authorisation:
- receive support while developing the medicine (‘protocol
assistance’);
- are allowed to pay lower fees when applying for a market
authorisation;
- get a ten year period of market exclusivity after market
authorisation has been granted. This market protection can
be extended by two years if the company has pledged to
conduct research into applications in paediatrics. During the
market exclusivity period the EMA and the member states
will not accept registration applications for similar medicines
or extensions of indication that are of a similar nature. The
manufacturer of the medicines indicates what the competing
medicines are.
SUPPLY CHAIN
Number of orphan drugs
Year Number Number
2002 1
2003 2
2004 2
2005 3
2006 7
2007 14
2008 8
2009 8
2010 3
2011 5
2012 12
2013 8
2014 17
2015 3
(Until May)
Number of medicines that have received market
authorisation and orphan drug status
Number of unregistered medicines that have received
orphan drug status
Source: European Medicines Agency (EMA), European public assessment reports
Source: European Commission, Pharmaceuticals – Community Register
15
98
73
106
130
107
148
136
187
78
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STEP 4: Marketing
authorisation application
Adaptive pathways approach
In cases where there is no medical treatment for potentially
serious diseases, treatments must be found as quickly as possible.
The European Medicines Agency (EMA) has developed a special
set of rules designed to help get new medicines for potentially
serious diseases onto the market rapidly. This ‘adaptive pathways
approach’ (formerly known as ‘adaptive licensing’) has two forms.
Either an initial market authorisation can be granted for a group
of patients that is limited in size (the medicine can be made
available to more people later), or an earlier market authorisation
can be granted without this limit on the patient population.
Conditional approval
Imagine a situation in which a disease is a serious threat to public
health and there is no treatment for it. In such cases the EMA’s
medicines assessment committee, the CHMP, can recommend
the granting of a market authorisation based on information
that is less comprehensive than what is normally expected. The
registration holder is then subject to specific obligations that are
checked annually. This type of market authorisation is known as
a ‘conditional approval’ and is an example of the second form of
the adaptive pathways approach.
SUPPLY CHAIN
Compassionate use
In the Netherlands manufacturers are allowed to make a non-
registered medicine available to a group of patients (‘cohort’),
but only if the Medicines Evaluations Board (MEB) has deemed it
necessary. According to the MEB, this level of necessity applies
if the cohort is suffering from a serious disease for which there
are no medicines on the market. In other words, if supplying
the medicine can be viewed as ‘compassionate use’. It must
also be plausible that the medicine will eventually be granted
market authorisation. At the very least, clinical research into the
medicine must have shown promising results. If all conditions are
met, the manufacturer can submit an application to the MEB’s
compassionate use programme.
Doctor’s statement
In the Netherlands an individual patient may be given a non-
registered medicine if he or she has a doctor’s statement
recommending this. Doctor’s statements are the responsibility of
the Healthcare Inspectorate.
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STEP 5: Determining the
recommended price
Pharmaceutical companies that want to sell a new medicine in
an EU member state must determine the price of the medicine
in the relevant country. This recommended price can be
determined in variety of ways.
Firstly, there is the bottom-up approach. Considering the
duration of patent protection and the expected number of
patients, what is the minimum price that is required to keep the
company financially healthy? Secondly, there is the top-down
approach. What is the maximum price that buyers are willing to
pay? This willingness to pay is affected by a number of factors,
such as the reimbursement system, funding systems and the
price of competing medicines in each country. For example, in
the Netherlands the Pharmaceuticals Pricing Act (WGP) has an
important role to play.
SUPPLY CHAIN
The pharmaceutical company’s point of view
‘Upon introduction of a medicine, companies issue a price
indication. This involves a balancing act. On the one hand the
price is meant to recuperate the company’s expenditure, as well
as earning the profit margins that any company needs in order to
reward its investors and to invest in research and development,
so that the company can continue to thrive in the future. On the
other hand companies look at the value added by the treatment
of a disease, both medically and economically. They also consider
the revenue and savings associated with the new medicine and
compare it to alternative methods of treatment. Based on these
considerations they determine a recommended price, which
can then be negotiated with governments. This process must
achieve a balance between public interests as represented by the
government and the private interests of the company. Once the
recommended price has been determined, hospitals and insurers
can then negotiate specific prices.’
Source: Nefarma, website
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STEP 6: Determining
the maximum price
The Ministry of VWS can set maximum prices for medicines
based on the Pharmaceuticals Pricing Act (WGP).
This maximum price applies to the price for which a
pharmaceutical company may sell a medicine to hospital
pharmacies, community pharmacies and wholesalers. It does
not apply to the price that the health insurer reimburses the
healthcare provider for.
The Ministry of VWS sets maximum prices via Farmatec, part of
its executive organisation the Central Information for Professions
in Healthcare (CIBG). When determining the maximum price,
Farmatec looks at the average of recommended prices for the
same medicine on the price lists of four reference countries:
Belgium, Germany, France and the United Kingdom.
These price lists do not show the full picture. For example,
pharmaceutical companies are not obliged to include a medicine
(and the associated recommended price) in these price lists.
Neither are all medicines with market authorisation included in
the Dutch price list (the G-standard).
SUPPLY CHAIN
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STEP 7: Determining what is
covered by basic insurance
There are two systems through which medicines can become
part of the basic insurance package. Which system is used
depends on the legal designation of the medicine in question.
If the medicine is administered in the hospital as part of a
specialist medical treatment, then it is designated as ‘medical
healthcare’. If the medicine is supplied outside the hospital then
it is ‘pharmaceutical healthcare’. This investigation is focused
on medicines within medical healthcare (SMC medicines). An
explanation of both systems is provided here for the sake of
comparison.
Pharmaceutical healthcare
The list of medicines that are covered by basic insurance and available
as part of pharmaceutical healthcare is limited. If a medicine is on this
list then policy holders are entitled to reimbursement of the price of
the medicine as part of their basic insurance. This is referred to as a
‘closed system and the list is called a ‘positive list’. If a medicine is not
on the list, paracetamol for example, then the patient must pay for it.
In this system it is immediately apparent whether or not the patient
is entitled to reimbursement for a specific medicine. Furthermore, the
reimbursement system that applies to this designation takes the prices
of medicines into account.
A pharmaceutical company can request reimbursement for a specific
medicine (i.e. inclusion in the positive list) from the Ministry of VWS.
The Dutch Healthcare Institute then decides if the medicine could
be replaced with any medicines that are already on the positive
list. If this is the case, then a reimbursement limit applies for the
cluster of interchangeable medicines, and so also for the medicine in
SUPPLY CHAIN
question. If the manufacturer demands a price that is higher than this
reimbursement limit, then the policy holder must pay this difference. If
there is no possibility of replacing the medicine and it is therapeutically
superior to other treatments, then the medicine will be added to the
positive list without a reimbursement limit.
Patients are not entitled to reimbursement of the costs of a medicine
until it has successfully gone through this procedure. A medicine’s mere
presence on the market is not sufficient justification for its inclusion
on the positive list. The procedure to get on the list takes three to six
months. A health insurer must state in its policy which trade names
of each active substance policy holders are entitled to. Policy holders
are then free to choose from insurers with varying numbers of brands
included in their policies.
Medical healthcare
In medical healthcare there is no limited list. Medicines that are
approved for use are automatically included in the basic insurance
package. As a result, medicines immediately become available
to patients upon being granted market authorisation. Medical
healthcare has an ‘open system’ instead of a ‘closed system’ and the
insurer has the first say as to whether a policy holder is entitled to a
medicine. The Dutch Healthcare Institute can provide an indication of
a medicine’s therapeutic value. The Institute only assesses specialist
medicines that are highly significant to the affordability and quality
of the insurance package; for example, medicines that cost a total of
more than € 2.5 million per year and that the manufacturer claims are
therapeutically superior. Based on this assessment the Institute can
recommend the exclusion of the medicine from the basic insurance
package. This could happen for two reasons:
1. Unfavourable or unpredictable cost effectiveness.
2. High impact on the budget.
policy
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STEP 8:
Decreasing the price if necessary
Some medicines have a high impact on the budget and/or
are not cost effective (According to research by the Dutch
Healthcare Institute). The government may then decide to enter
direct negotiations with manufacturers to establish a new price.
This is the responsibility of the Ministry of VWS’ Bureau for
Medicine Price Arrangements. By effectively negotiating with
manufacturers the Ministry hopes to limit expenditure on
medicines. The government only makes use of this option when
it thinks that health insurers and healthcare providers have not
succeeded in lowering the price enough. The eventual outcome
of negotiations is a contractual agreement between the Ministry
of VWS and the manufacturer regarding the price, and often also
the volume. The outcomes of these negotiations are confidential.
The manufacturer charges the healthcare provider the standard
price for the medicine but then pays the discount that was
agreed with the Ministry of VWS to a Trusted Third Party (TTP).
This intermediary divides the refunded amounts amongst health
insurers based on their share of the market. The health insurer
that supplied the medicine to the patient is therefore unable to
see the discount in its accounts.
SUPPLY CHAIN
TTP
Manufacturer Ministry of VWS
Health insurersHealthcare providers
Discount
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STEP 9: Performance and
determining maximum rates
A SMC medicine must be declared as part of a DBC healthcare
product. In principle, separate declaration is prohibited.
This general rule applies for DBC healthcare products in the
regulated and free sector.
Exception to the rule: add-ons
At the moment, treatment costs using a certain medicine can
significantly vary from person to person. In addition, medicines
can be supplied for a variety of indications, and therefore within a
variety of DBC healthcare products. Both of these issues can lead
to large variations in cost between one or more DBC healthcare
products. In order to prevent the negative effects of cost variation
(such as patient selection), some medicines are excepted from
the general rule. These medicines are allowed to be declared
separately, and are referred to as add-ons.
SUPPLY CHAIN
Conditions for separate declaration
The NZa determines whether combinations of substances and
indications receive add-on status. These add-ons are then added
to a list. If a patient uses a medicine for the indication on the
list, then the institution must declare the medicine as an add-
on. If the patient uses a medicine the chemical name of which
is not on the list, then the institution must declare the medicine
as part of a DBC healthcare product. If a patient uses a medicine
the chemical name of which is on the list, for an indication that
is not on the list, then the institution must also declare it as
part of a DBC healthcare product. Furthermore, the presence or
absence of an add-on is no indication of entitlement or right to
reimbursement for an individual patient.
+
Medicine part of
a DBC healthcare
product
+
Medicine as
add-on (separate
declaration)
NZa approval
DBC ADD-ON
+
ADD-ON
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STEP 9: Performance and
determining maximum rates
Advice regarding add-on application
Healthcare providers and health insurers can submit a request to
the NZa asking for the inclusion of removal of a chemical name
or indication. When this happens, the NZa asks representatives of
healthcare providers and health insurers for advice. This advice
must yield objective and verifiable evidence regarding:
- whether funding of the relevant chemical name and/or
indication leads to homogenously priced DBC products;
- the methods used in the assessment to test whether an
add-on’s inclusion or exclusion in a DBC product results in a
homogenously priced DBC product;
- if and how other advice has been carefully and consistently
considered when generating the new advice.
The representatives of healthcare providers and health insurers
use various criteria to determine whether a situation can be
deemed non-homogenously priced. One of these criteria is that
a medicine costs more than € 1000 per patient per year for the
relevant indication.
SUPPLY CHAIN
Determining maximum rates
A maximum rate is the highest amount a hospital is permitted to
charge to a health insurer or patient and the maximum amount
an insurer is permitted to reimburse to a hospital or patient.
The maximum rate is therefore not the maximum price that the
manufacturer is permitted to charge to the hospital; maximum
prices are determined by the Pharmaceuticals Pricing Act. The NZa
determines maximum rates for add-on medicines.
For each chemical name and drug delivery method (for example,
a tablet or an injection) the maximum rate is determined based
on the lowest price per milligram. Here ‘price’ refers to the price
that the manufacturer has registered in the G-standard, the
Pharmacy Purchasing Price (AIP). If there are more products on
the market with the same active ingredient using the same drug
delivery method, then the rate is adjusted to the lowest Pharmacy
Purchasing Price per milligram, after which 6 percent VAT is
added.
+
ADD-ON
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STEP 10: Purchasing medicines
Hospital pharmacies buy most of their medicines from
wholesalers (Brocacef, Mediq, Alliance Healthcare) but they
carry out negotiations over prices of medicines directly with
the pharmaceutical industry.
Their goal is to stipulate discounted prices. The extent to
which hospitals succeed here varies with each medicine and
is dependent on the amount of competition. Some hospitals
succeed in stipulating a larger discount on a specific medicine
than others. The hospital benefits from discounted prices, and
eventually so does the patient. The size of discounts is not public
knowledge but is established in contracts between hospitals and
manufacturers.
SUPPLY CHAIN
Combining forces
Although most hospitals still negotiate with the industry
individually, it is becoming increasingly common to combine
forces. More hospitals are joining forces to negotiate with
industry and then forming purchasing groups.
Example 1: the Santeon group
A group of six hospitals, the so-called ‘Santeon group’, purchases
medicines from manufacturers collectively. Among other
things, they have developed their own guidelines for healthcare
provided to patients who use biologicals. The Santeon group
is made up of: the Canisius-Wilhelmina Hospital in Nijmegen,
the Catharina Hospital in Eindhoven, the Martini Hospital in
Groningen, the Medisch Spectrum Twente in Enschede, the St.
Antonius Hospital in Utrecht/Nieuwegein and the Onze Lieve
Vrouwe Gasthuis in Amsterdam.
Example 2: the Achmea collaboration
Since early 2015, nineteen hospitals and the health insurer
Achmea have been collectively purchasing TNF inhibitors. One
third of the revenue generated by the higher discount that
is agreed upon as a result of this collaboration goes to the
hospitals, one third goes to policy holders via Achmea and the
remaining third is invested into an innovation fund.
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STEP 11: Prescribing medicines
Medical specialists prescribe medicines based on treatment
guidelines. Treatment guidelines are drafted by professional
groups. There is a great deal of variation in the degree to
which professional groups assemble in order to draft good
treatment guidelines.
Medical oncologists for example are good at this kind of
organisation. The Dutch Medical Oncology Association (NVMO) in
particular is very effective at developing treatment guidelines (see
box).
Sometimes medicines are prescribed for unregistered indications.
This is known as off-label usage. In specific cases the medical
specialist can deviate from the treatment guidelines, although he
or she must at the very least have a sound medical justification
for doing so. The industry is keen to have certain medicines
included in treatment guidelines as ‘preferred medicines’ and
makes use of various marketing instruments to promote them (to
medical specialists among others).
Each hospital has its own formulary. This contains a preferred list
of medicines for each disease, among other things. Sometimes
specialists are able to choose which medicine to use. The choice
of medicines in the formulary is grounded on considerations of
effectiveness, safety, convenience and expediency (including the
price).
SUPPLY CHAIN
Medicines for children
Prescriptions for children are more often off label, meaning
that they are intended for the treatment of an unregistered
indication. This is often the cause for discussion between
healthcare providers and health insurers. All off label
prescriptions for children that they consider to satisfy the
state of the art in science and practice are listed in the Dutch
Knowledge Centre for Children’s Pharmacotherapy (NKFK)
children’s formulary (www.kinderformularium.nl)
Treatment guidelines professional group
Treatments with medicines are usually assessed by medical
professional groups. They decide whether or not to include
specific treatments in their guidelines. One example of such
a group is the committee for the Assessment of Oncological
Medicines. This committee evaluates the clinical value of new
medicines, treatment methods and treatment indications in the
field of oncology. Their goal is to improve the coordination of
the practical use of these new, often expensive medicines at the
national level. For the committee to assess a new medicine, there
must be at least one scientific publication available containing
the results from a randomised phase III study. In addition, the
medicine must be registered with the European Medicines
Agency and, if applicable, the Dutch Healthcare Institute’s
Medicines Committee must have passed judgement on the
medicine.16
Haemato-oncology for Adults in the Netherlands
(HOVON) also engages in similar activities. (www.hovon.nl)
16 Source: NVMO (consulted 18-06-2015)
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STEP 12: Purchasing
specialist medical care
Health insurers purchase SMC medicines as part of specialist
medical care. Add-ons are declared separately and it is
therefore easier for insurers to keep track of them. However,
quite the opposite is true for medicines that are not add-ons,
since their cost is not visible to health insurers. Insurers have
borne all risk associated with add-ons since 1 January 2015,
with the exception of oncolytics and orphan drugs.
Health insurers purchase specialist medical care using a variety
of contract types and if a medicine’s patent has expired they can
stimulate the use of generic medicines (such as biosimilars) via
contractual agreements.
Preferential policies that are used outside the hospital are legally
prohibited within medical healthcare. This is because preferential
policies are linked to the designation ‘pharmaceutical healthcare’
and not to the designation ‘medical healthcare’. Nevertheless, it
is still possible for an insurer to encourage the use of a particular
medicine.
SUPPLY CHAIN
Negotiating discounts
The NZa determines the maximum rates for add-on medicines for
each chemical name and method of delivery based on the lowest
Pharmacy Purchasing Price (AIP). The health insurer may then
negotiate any further purchasing discounts to the maximum rate
with the hospital. Purchasing discounts that manufacturers grant
to hospitals are not included in the maximum rates by the NZa.
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STEP 13: Receiving the medicine
and paying reimbursements
Patients can request healthcare from the basic package if it
satisfies the ‘state of the art in science and practice’ and if
they are ‘reasonably entitled’ to it. Health insurers are obliged
to cover the costs of any treatment with medicine that meets
these criteria. As a result they must make purchases for policy
holders with a basic policy or reimburse policy holders with a
reimbursement policy. Just like in pharmaceutical healthcare,
deductibles also apply in medical healthcare.
Sometimes SMC medicines are part of a DBC healthcare product
so that one rate is charged to the patient and then reimbursed by
the health insurer. These medicines are then not shown separately
on the patient’s declaration overview. Conversely, SMC medicines
for which an add-on has been established are not part of a DBC
healthcare product and are therefore shown separately.
SUPPLY CHAIN
Patient’s rights (international)
Various human rights issues play a role in the promotion of
health. The ‘right to healthcare’ is recognised in the International
Covenant on Economic, Social and Cultural Rights (ICESCR), the
European Social Charter (ESC) and the Charter of Fundamental
Rights of the European Union.
This means that the Dutch state has an obligation to ensure the
provision of a high quality healthcare service. Good quality medi-
cal facilities, pharmaceuticals, treatments and medical personnel
must be available to anyone who has need of them. The right to
healthcare also includes the responsibility of the state to ensure
that all its inhabitants are safe and healthy.
Furthermore, EU directive 2011/24 covers the rights of patients
in cross-border healthcare situations. This directive also applies
in the Netherlands and specifies that patients who are treated
outside their home country are, in principle, eligible for reimbur-
sement of the costs of the treatment.
However, such reimbursement is limited to treatments that
would also be reimbursed in the patient’s home country. The
directive therefore recognises that member states such as the
Netherlands may make autonomous decisions regarding the co-
verage provided by public health insurance (i.e. which treatments
are covered and which are not).
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STEP 13: Receiving the medicine
and paying reimbursements
SUPPLY CHAIN
Patient’s rights (the Netherlands)
The Health Insurance Act (Zvw) states that policy holders are
entitled to insured provisions (healthcare) or reimbursement of
the cost of healthcare. The health insurer has a duty of care. The
available insured provisions are partly determined by the state
of the art in science and practice or, in case such a reference
point is not available, by what is considered to be adequate and
responsible care within the field in question. Whether a medicine
is applied as off-label does not matter here. Furthermore, the
policy holder must be ‘reasonably entitled’ to the healthcare.
With regards to the designation ‘medical healthcare’ (the basic
insurance package), it is up to the minister to decide whether
to exclude certain forms of healthcare (including medicines)
from this designation. However, directive 89/105/EEG specifies
that this exclusion can only occur based on objective and
verifiable criteria. The Dutch Healthcare Institute can also decide
that a specific medicine does not satisfy the state of the art in
science and practice, thereby excluding the medicine from the
designation ‘medical healthcare’.
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3
Figures
Results from the
quantitative part of the
investigation
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Turnover, expenditure and prices
The NZa carried out a quantitative analysis of medicines in
specialist medical care (SMC), in collaboration with the Dutch
Healthcare Institute (ZIN). The analysis concerns all expensive
medicines, orphan drugs and coagulation factors for which
the NZa establishes provisions and rates.
In this chapter sources have been mentioned for each analysis.
The data here concerns medicines that were on the lists ‘expensive
medicines’ and ‘orphan drugs’ in the years 2010 and 2011,
medicines that were on the add-on list ‘Expensive medicines and
orphan drugs’ in the years 2012 and 2013, and all coagulation
factors that have separate declaration titles. Appendix 1 contains
a list of all the medicines included in the analysis.
The following analyses are dealt with in this chapter:
- Total turnover SMC medicines.
- Turnover percentage per institution type
- Relative turnover SMC medicines.
- Turnover per medicine category.
- Turnover medicines per patient.
- Top 25 medicines based on turnover.
- Top 25 medicines based on turnover per patient.
- Purchasing cost of medicines vs. total hospital expenditure.
- Purchasing price vs. contract price vs. maximum rate.
- Successful applications for add-on medicines from 2014.
FIGURES
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Total turnover SMC medicines
Turnover outpatient SMC
medicines (before transfer)
Turnover transferred inpatient
SMC medicines (after
transfer)
Turnover regular SMC
medicines*
Total
2010 2011 2012 2013
0
500
1.000
1.500
* ‘Regular’ refers to all medicines, orphan drugs and coagulation factors that are permanently
included as part of specialist medical care.
FIGURES
Total turnover SMC medicines from 2010 to 2013 (€ millions)
522 539 432
197
679
690
1.212
716
1.255
764
1.393 1.530
Sources:
Outpatient turnover before transfer: GIP-data, Dutch Healthcare Insitute
Turnover transferred inpatient SMC medicines: Claims data 2012 and 2013, Dutch Healthcare
Institute
Inpatient turnover 2010 and 2011: NZa rekenstaten (FB)
NB. Medicines with 80% reimbursement have been adjusted to 100%.
Inpatient turnover 2012 and 2013 (everything but coagulation factors): Claims data 2012 and
2013, Dutch Healthcare Institute
Inpatient turnover 2012-2013 (coagulation factors): Vektis data 2012 and 2013
Distribution of turnover per institution type: Vektis data 2013
Amounts transferred to BKZ specialist medical care: Budget VWS 2012
Explanation
The total turnover from SMC medicines is shown in the figure
above, including transferred medicines. Transferred medicines
from 2012 accounted for € 432 million turnover in 2012. In 2013
transferred medicines from 2012 and 2013 accounted for a total
turnover of € 679 million, € 451 million of which was from 2012
and the remaining € 228 million of which was from 2013.
For these transfers the government also transferred money from
the Budgetary Framework for specialist medical care. In 2012 this
amounted to € 455 million and in 2013 the total amount was
€ 701 million. This causes the amounts made available for this
transfer to seem sufficient.
Amounts transferred to BKZ specialist medical care (€ millions)
2012 2013
Transfer TNF inhibitors 2012 450 461
New melanoma medicine 5 25
Transfer medicines 2013 - 214,7
Total 455 700,7
852
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Relative turnover SMC medicines
FIGURES
2010 2011 2012 2013
Total turnover SMC 18.195 18.813 19.449 20.711
Total turnover inpatient SMC medicines 690 716 1.197 1.530
Percentage expensive medicines in total SMC expenditure 3,8% 3,8% 6,2% 7,4%
Relative turnover from inpatient medicines compared to the total SMC turnover for 2010 to 2013 (€ millions)
Sources:
Total turnover from specialist medical care: Healthcare data Dutch Healthcare Institute
databank
Outpatient turnover before transfer: GIP-data, Dutch Healthcare Insitute
Turnover transferred inpatient SMC medicines: Claims data 2012 and 2013, Dutch Healthcare
Institute
Inpatient turnover 2010 and 2011: NZa rekenstaten (FB)
NB. Medicines with 80% reimbursement have been adjusted to 100%.
Inpatient turnover 2012 and 2013 (everything but coagulation factors): Claims data 2012 and
2013, Dutch Healthcare Institute
Inpatient turnover 2012-2013 (coagulation factors): Vektis data 2012 and 2013
Turnover distribution in 2013
General hospitals 30,9%
Other institutions* 3,2%
Specialist hospitals 31,6%
University Medical Centres 34,4%
*‘Other institutions’ refers to: revalidation,
affiliated institutions and ZBC’s.
Turnover percentage per institution type
Hospital results
The scope of this report does not include the operational results
and solvency of hospitals. Obviously, their financial position is
affected by the expenditure and income related to treatment
with expensive medicines. Conversely, the finances available
for expensive medicines are partly determined by the financial
position of the hospital. The NZa publishes an annual market
assessment of specialist medical care in which, among other
things, developments in results, solvency and liquidity are shown.
The market assessment of 2014 will be published in July 2015.
Exceeding the budget for medicines
Various parties have suggested that hospitals have problems due
to ‘exceeding the budget for medicines’. The NZa has noticed
that there is no separate budget for SMC medicines. Instead,
they are included in the Budgetary Framework for specialist
medical care. However, the agreements that hospitals make with
health insurers regarding the reimbursement of medicines, or the
sums reserved for medicines by hospitals in their own budgets,
can both be considered budgets for medicines.
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Turnover per medicine category
FIGURES
Turnover per medicine group 2010 2011 2012 2013
Oncolytics 379.430 372.251 447.884 548.592
TNF alpha inhibitors (anti-arthritic) 462.406 472.079 529.459 542.422
Coagulation factors 130.850 138.721 138.784 126.488
Metabolic disease medicines 72.963 74.963 72.453 83.388
Growth hormones 55.189 55.739 52.351 47.973
Immunoglobulin 24.444 26.121 34.534 47.443
Other anti-arthritics (other than TNF inhibitors) 11.168 21.293 27.089 38.075
Other** 14.784 19.069 22.933 28.413
MS medication 18.690 21.866 20.327 19.159
Macular degeneration medication 14.529 17.921 17.125 15.453
Antifungals 12.376 17.052 13.439 15.069
Asthma medication 9.204 11.596 11.344 12.501
Botulinum toxin 5.808 6.400 5.687 5.505
Turnover from 2010 to 2013 divided into groups of medicines (x € 1000)*
*Including (outpatient) turnover from transferred medicines
**Palifermin, Pethyl aminolevulinate, Collagenase clostridium histolyticum, Eculizumab, Canakinumab, Ivacaftor, Drotrecogrin alpha and ChondroCelect.
Sources:
Outpatient turnover before transfer: GIP-data, Dutch Healthcare Insitute
Turnover transferred inpatient SMC medicines: Claims data 2012 and 2013, Dutch Healthcare Institute
Inpatient turnover 2010 and 2011: NZa rekenstaten (FB)
NB. Medicines with 80% reimbursement have been adjusted to 100%.
Inpatient turnover 2012 and 2013 (everything but coagulation factors): Claims data 2012 and 2013, Dutch Healthcare Institute
Inpatient turnover 2012-2013 (coagulation factors): Vektis data 2012 and 2013
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Turnover medicines per group
Here the turnover and the number of users per medicine
group are dealt with. For coagulation factors this information
is not available at the individual level. It is available for all
other medicines (including transferred medicines).
FIGURES
Turnover per patient
Number of users per group expensive medicines
2012 2013 2012 2013
Oncolytics 51.512 57.377 8.695 9.561
TNF alpha inhibitors (anti-arthritic) 40.919 44.530 12.939 12.181
Metabolic disease medicines 217 242 333.887 344.580
Growth hormones 5.248 5.014 9.975 9.568
Immunoglobulin 3.157 3.488 10.939 13.602
Other anti-arthritics (other than TNF inhibitors) 2.250 3.063 12.039 12.431
Other* 9.498 8.907 2.415 3.190
MS medication 1.181 1.134 17.211 16.895
Macular degeneration medication 4.634 3.663 3.695 4.219
Antifungals 2.551 2.715 5.268 5.550
Asthma medication 836 938 13.569 13.327
Botulinum toxin 9.557 9.766 595 564
Total average turnover per patient per medicine group (€)
*Palifermin, Methyl aminolevulinate, Collagenase clostridium histolyticum, Eculizumab, Canakinumab, Ivacaftor, Drotrecogrin alpha and ChondroCelect.
Source: Claims data 2013, Dutch Healthcare Institute
107.597
Number of users
2012
1.254.626.278
Total turnover
2012
11.660
Average turnover
per patient 2012
125.924
Number of users
2013
1.403.998.118
Total turnover
2013
11.150
Average turnover
per patient 2013
Total average turnover per patient (€)
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Top 25 medicines based on turnover
FIGURES
Rank Chemical name Group Total turnover (x € 1000)
1 Adalimumab TNF alpha inhibitor (anti-arthritic) 208.385
2 Etanercept TNF alpha inhibitor (anti-arthritic) 156.044
3 Infliximab TNF alpha inhibitor (anti-arthritic) 143.670
4 Trastuzumab Oncolytics 72.653
5 Rituximab Oncolytics 59.692
6 Alglucosidase alpha Metabolic disease medication 51.390
7 Somatropin Growth hormone 47.840
8 Immunoglobulin IV Immunoglobulin 47.443
9 Bevacizumab Oncolytics 41.721
10 Lenalidomide Oncolytics 39.191
11 Imatinib Oncolytics 38.078
12 Docetaxel Oncolytics 29.134
13 Pemetrexed Oncolytics 27.481
14 Bortezomib Oncolytics 26.197
15 Abirateron Oncolytics 24.045
16 Everolimus Oncolytics 20.635
17 Ustekinumab Other anti-arthritics 20.621
18 Eculizumab Other 19.518
19 Natalizumab MS medication 19.112
20 Oxaliplatin Oncolytics 18.300
21 Paclitaxel Oncolytics 17.172
22 Golimumab TNF alpha inhibitor (anti-arthritic) 16.978
23 Ipilimumab Oncolytics 15.447
24 Tocilizumab Other anti-arthritics 15.208
25 Ranibizumab Macular degeneration medication 14.834
Total turnover per medicine in 2013
Source: Claims data 2013 excluding coagulation factors, Dutch Healthcare Institute
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Top 25 medicines based on turnover per patient
FIGURES
Rank Chemical name Group Turnover per user (x € 1000)
1 Idursulfase Metabolic disease medication 550
2 Galsulfase Metabolic disease medication 518
3 Alglucosidase alpha Metabolic disease medication 432
4 Eculizumab Other 320
5 Laronidase Metabolic disease medication 257
6 Ivacaftor Other 209
7 Agalsidase alpha Metabolic disease medication 190
8 Ibritumomab-tiuxetan Oncolytics 180
9 Agalsidase beta Metabolic disease medication 157
10 Ipilimumab Oncolytics 68
11 Canakinumab Other 67
12 Crisantaspase Oncolytics 61
13 Lenalidomide Oncolytics 35
14 Dasatinib Oncolytics 32
15 Vandetanib Oncolytics 32
16 Vemurafenib Oncolytics 31
17 Nilotinib Oncolytics 29
18 Brentuximab Oncolytics 28
19 Ofatumumab Oncolytics 27
20 Imatinib Oncolytics 27
21 Crizotinib Oncolytics 26
22 Mecasermin Growth hormones 26
23 Trabectedin Oncolytics 25
24 Chondrocytes, autologous Other 22
25 Azacitidin Oncolytics 22
Total turnover per user in 2013 (€)
Source: Claims data 2013 excluding coagulation factors, Dutch Healthcare Institute
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Purchasing cost of medicines vs. total hospital expenditure
FIGURES
Excluding transfer Including transfer*
2010 2011 2012 2013 2010 2011 2012 2013
General hospitals 3,3% 3,3% 2,5% 2,5% 3,3% 3,3% 6,1% 6,5%
Specialist hospitals 3,3% 3,4% 2,6% 2,6% 3,3% 3,4% 6,0% 6,8%
University Medical Centres 6,1% 6,4% 6,8% 5,7% 6,1% 6,4% 8,0% 7,5%
Total 4,6% 4,8% 4,9% 4,2% 4,6% 4,8% 6,9% 7,0%
*No data are available about transferred medicines before they were transferred.
The purchasing costs of medicines as a percentage of
total hospital expenditure are shown below. The data are
displayed including and excluding medicines transferred from
outpatient pharmaceutical healthcare to specialist medical
care, for the period from 2010 to 2013, and are based on a
selection of 31 general hospitals, 22 specialist hospitals and 7
UMC’s.
These hospitals supplied data for the NZa pricing model for both
2012 and 2013. The table shows the average percentage that
purchasing costs of SMC medicines represent compared to total
hospital expenditure. The percentage is weighted by purchasing
costs.
Sources:
Purchasing cost of medicines 2010 and 2011:
NZa rekenstaten (FB) for 31 general hospitals, 22 specialist hospitals and 7 University Medical Centres
Purchasing cost of medicines 2012 and 2013:
Pricing information submitted for NZa pricing model for 31 general hospitals, 22 specialist hospitals and 7 University
Medical Centres
Total hospital expenditure: Total expenditure from annual statements of 31 general hospitals, 22 specialist hospitals and
7 University Medical Centres
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Purchasing price vs. contract price vs. maximum rate
FIGURES
Sources:
Rates: Maximum rates as set in the provisions and rates table 2013
Contract prices: Average contract prices 2013 submitted by health insurers.
Purchasing prices 2013: Submission of pricing information for the NZa pricing model of 44
general hospitals, 25 specialist hospitals and 7 University Medical Centres
Below, the percentage difference is shown between maximum
rates as determined by the NZa and the average contract
prices set by agreements between insurers and hospitals.
Also visible is the percentage difference between the average
contract price and the average purchasing price paid by the
hospital to the manufacturer. These differences are based on
the available data from 2013.
Maximum rate set by
the NZa
Contract price agreed upon
by hospital and insurer
Purchasing price
hospital pays to manufacturer
1,0%
lower than
the maximum
rate set
by the NZa
5,0%
lower than the
average contract
price agreed
upon by hospital
and insurer
The purchasing
price is
The average
contract price
is
Explanation
The percentages concern the percentage differences between the
production values based on the production quantities from the
pricing model, compared to the rates, the average contract prices
and the purchasing prices. The fact that there is a percentage
difference does not mean that the hospital actually benefits
financially: that is dependent on other agreements with the health
insurer (such as ‘turnover limit or no turnover limit’ or costing).
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Successful applications for add-on medicines from 2014
FIGURES
So far, the analyses have dealt with data up to and including
2013. The NZa does not have sufficient data from 2014
onwards to conduct the same kinds of analyses.
For example, the lack of data makes it impossible to give a good
indication of the amounts that have been declared by hospitals
and reimbursed by insurers from 2014 until the present day. As
a result, this report does not contain an analysis of the turnover
from medicines since 2014. Nor does the NZa have sufficient data
to make predictions regarding medicines that will be declared in
the years to come. For this reason, the report does not contain a
predictive analysis.
However, the NZa does receive requests from healthcare providers
and health insurers to place medicines on the add-on medicine
list. The table on the following page provides an overview of the
requests that the NZa has approved, including the associated
medicines that have been added to the add-on list since 1
January 2014.
The table also shows the average expenditure that the applicants
(healthcare providers and health insurers) expect to incur per
patient per year.
For a full overview of add-ons and their associated indications see
the Provisions and Rates Table Add-on Medicines at www.nza.nl.
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Successful applications for add-on medicines from 2014
FIGURES
Add-on chemical name Add-on indication Date add-on title Expected average cost
(month and year) p.p.p.y (€)
alfibercept macular degeneration jan-14 7.131
canakinumab gouty arthritis feb-14 22.000
alemtuzumab multiple sclerosis feb-14 28.000
trastuzumab-emtansine breast cancer feb-14 77.088
adalimumab axial spondyloarthritis mar-14 13.832
paclitaxel albumin pancreatic adenocarcinoma mar-14 14.580
stabilised
MACI knee cartilage defects apr-14 19.550
defibrotide veno-occlusive disease may-14 71.355
everolimus subependymal giant cell astrocytoma may-14 45.589
bedaquiline tuberculosis jun-14 23.350
rituximab Non-Hodgkin lymphoma jun-14 14.577
siltuximab Castleman’s disease aug-14 72.720
vedolizumab ulcerative colitis aug-14 18.454
vedolizumab Crohn’s disease aug-14 18.454
regorafenib gastrointestinal stromal tumours sep-14 27.080
5-aminolevulinic acid actinic keratosis oct-14 225
etanercept axial spondyloarthritis oct-14 14.012
bevacizumab epithelial ovarian, fallopian tube or nov-14 26.631
primary peritoneal cancer
ibrutinib mantle cell lymphoma nov-14 99.061
ibrutinib chronic lymphatic leukaemia nov-14 74.296
idelalisib follicular lymphoma nov-14 41.800
idelalisib chronic lymphatic leukaemia nov-14 45.600
obinutuzumab chronic lymphatic leukaemia nov-14 31.241
ofatumumab combination lymphatic leukaemia nov-14 14.553
therapy for chronic
adalimumab enthesitis related arthritis dec-14 14.352
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Successful applications for add-on medicines from 2014
FIGURES
Add-on chemical name Add-on indication Date add-on title Expected average cost
(month and year) p.p.p.y (€)
canakinumab systemic juvenile dec-14 66.000
ideopathic arthritis
elosulfase alfa mucopolysaccharidosis type IVA dec-14 508.090
nelarabine T-cell acute lymphoblastic leukaemia dec-14 18.404
and T-cell lymphoblastic lymphoma
plerixafor Haematopoietic stem cell mobilisation dec-14 16.250
enzalutamide prostate cancer jan-15 55.660
ramucirumab stomach cancer or adenocarcinoma feb-15 43.756
aflibercept diabetic macular edema mar-15 7.804
nintedanib non-small cell lung carcinoma mar-15 14.063
olaparib epithelial ovarian, fallopian tube or mar-15 75.885
primary peritoneal cancer
omalizumb urticaria mar-15 7.139
ranibizumab diabetic macular edema mar-15 903
secukinumab plaque psoriasis mar-15 16.478
aflibercept macular edema due to central retinal jan-16 6.727
vein occlusion
belatacept prophylaxis kidney transplant rejection jan-16 17.860
ranibizumab macular edema due to central retinal, jan-16 903
hemiretinal or branch vein occlusion
ranibizumab choroidal neovascularization jan-16 903
arseen trioxide acute promyelocytic leukemia jan-17 48.414
Sources: Add-on applications for add-on provisions submitted to the NZa. Only includes add-
ons added to the list since 2014.
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4
Findings
Results from the qualitative
component of
this investigation
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Expenditure and reimbursement in
specialist medical care
A combination of in-depth interviews, literature review and
quantitative analyses formed the basis of this investigation
into the costs and reimbursement of medicines carried out by
the NZa.
In part 1 of this chapter the NZa describes all of its findings
regarding expenditure on medicines in specialist medical care. The
following steps in the supply chain are significant here:
1. The search for molecules
2. Patent application
3. Research
4. Marketing authorisation application
5. Determining the recommended price
6. Determining the maximum price
8. Decreasing the price if necessary
10. Purchasing medicines
FINDINGS
In part 2 of this chapter the NZa describes all of its findings
regarding the reimbursement of medicines. The following steps in
the supply chain are significant here:
7. Determining what is covered by basic insurance
9. Provisions and determining maximum rates
11. Prescribing medicines
12. Purchasing specialist medical care
13. Receiving the medicine and paying reimbursements
Part 1
Expenditure on
medicines
Part 2
Reimbursement of
medicines
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FINDINGS > PART 1
Expenditure on SMC medicines
The topic ‘expensive medicines’ is attracting increasing
amounts of attention from both politicians and the general
public and there has been a noticeable increase in the
number of news items and articles appearing on the subject.
Hospitals, specialists, journalists, patients and policy makers
are all openly concerned as to whether or not medicines
for specialist medical care have become too expensive and
whether patients are still being prescribed the most suitable
medications.
Questions in part 1
The first part of the NZa’s findings deals with the following
questions
- Why are ‘expensive medicines’ receiving so much attention?
- How do manufacturers determine recommended prices?
- How do prices develop after medicines are put on the market?
- What kind of interactions and relationships exist between the
pharmaceutical industry and the healthcare sector?
- What policy measures are available to influence prices?
- WGP
- Price determination
- How should medicines be used?
- How do hospitals purchase medicines?
octrooi
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Why are ‘expensive medicines’ receiving
so much attention?
The increasing amount of attention attracted by medicines can
partly be explained by the fact that over the past few years the
price per medicine, and therefore per patient, has risen. This has
started to put pressure on established budgetary limitations.
More and more people are becoming worried that this pressure
will eventually lead to patients being unable to access the
medicines that they need.
A sense of injustice
Citizens are both premium payers and potential patients.
They are at least partially dependent on medication to remain
healthy. Does this dependence mean that SMC medicines are
too expensive? And are other forms of treatment also at risk
due to high prices? This NZa investigation has shown that the
accessibility of SMC medicines will come under pressure.
Many respondents to the interviews that the NZa carried out with
various parties in the field were critical of the pharmaceutical
industry’s pricing policies. Their view was that it seems as if only
the industry has a handle on the pricing of medicines – not the
general public via their government, despite the fact that a share
of the development costs of medicines is funded using public
money. Many respondents believe this system to be unjust.
FINDINGS > PART 1
Government support for the industry
There are programmes that support the development of new
medicines at both the national and the European level. In
addition, research is also financially supported through the
financial resources of universities or other research institutions
linked to healthcare providers. There are also subsidies available
from the national government and from the EU. Furthermore, the
development and marketing of SMC medicines for smaller groups
of patients, so-called ‘orphan drugs’, are supported by additional
governmental policy mechanisms; from the provision of market
exclusivity to the shortening of the required period of medical
trials.
Within the EU subsidy programme, the pharmaceutical industry
may choose for immediate exploitation and publication of
research results during the first research phase (molecular
research), even if the industry has closely collaborated with a
university or research institute, as if often the case. This is just
one example of the various ways that the national and European
governments provide support for the industry and help reduce
financial risk. The goal of this support is the development of more
new medicines.
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Why are ‘expensive medicines’ receiving
so much attention?
A lopsided relationship
Many respondents consider the current system to be lopsided: the
industry profits from fundamental research that the government
and various charities have financially contributed to. The indus-
try’s justification for its pricing policies is that it takes a great
many risks and also heavily invests in research and development.
Furthermore, a great deal of research does not lead to medici-
nes that can be marketed. Only a small percentage of the active
ingredients that are discovered can be used to earn money and
recuperate investments. This money is then needed to finance
future research.
Medicines used in healthcare are of huge public interest. As a
result, a government with a handle on the prices of medicines is
also very important. But, despite the fact that SMC medicines are
reimbursed via the public health insurance system and the gover-
nment has access to various legal instruments, the Dutch national
government has little control over the price of these medicines.
It stimulates front-end research without placing any emphasis on
price, whilst trying to reduce the price at the back-end without
being able to test or guarantee reductions.
Questions for society
This situation raises a lot of questions. How could the Dutch
government more effectively manage expenditure on medicines?
How can it simultaneously ensure that new and effective medi-
cines continue to make it onto the market? How much is society
prepared to pay for medicines that are primarily focused on small,
specific groups of patients?
FINDINGS > PART 1
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How do manufacturers determine
recommended prices?
The pharmaceutical industry uses a market access strategy for the
introduction of each new medicine. This strategy consists of a
recommended price range, the launch date for each country, the
acquisition of the most optimal reimbursement status and the
inclusion in treatment guidelines, among other things.
Retaining market exclusivity
The development costs and the minimum expected patent
period play a role for the manufacturer when determining the
recommended price, also known as the ‘Pharmacy Purchasing
Price (AIP). During this period generic medicines (unbranded
medicines with the same active ingredient) cannot be brought
onto the market. The new medicine is legally protected from
competition until the patent expires.
It is in the manufacturers interest to obtain market exclusivity.
This exclusivity makes competition from generic medicines
impossible, thus excluding the price lowering effects of
competition. The Consumers & Market Authority (ACM) has
observed that it is indeed possible for manufacturers of branded
chemical medicines to prevent competing medicines from
entering the market by maintaining and extending their own
patent protection.17
Determining ‘willingness to pay’
It is difficult to fully understand how manufacturers determine
their recommended prices. However, it is clear that they take
the current status of national reimbursement systems, price
regulation systems and prices of standard treatment into account.
FINDINGS > PART 1
Each country has its own reimbursement system and its
own criteria for approving medicines for inclusion in the
basic insurance package. In several European countries, cost
effectiveness plays a role in reimbursement policy decisions to
some extent.
Based on this, among other factors, the manufacturer decides on
a price range for each country prior to launching its product. The
manufacturer justifies this price based on improvement of health,
increases in quality of life, the participation in the labour market
(if possible) and the price of similar treatments. This justification
is also known as value pricing.
17 ACM, Pharmacy under the microscope, opportunities for the inclusion of generic medicines
and choice for patients (February 2015).
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How do manufacturers determine
recommended prices?
Politicians and healthcare professionals have voiced a lot of
criticism regarding the pricing of medicines by manufacturers
(see box). Some critics blame the lack of moral motivation and
feel there is an excessive focus on profits. They consider the price
determination process to be purely opportunistic, aimed at the
maximum possible price that countries are prepared to pay. This
process involves looking at similar medicines that are already on
the market, with a particular focus on the previously accepted
prices these medicines have been bought for.
FINDINGS > PART 1
18 Answers to parliamentary questions by MP’s Leijten (SP) and Van Gerven (SP) about the forty
fold increase in a medicines price upon reregistration (2014Z22311).
Parliamentary inquiries into manufacturers’ pricing
The prices requested by manufacturers of medicines are
increasingly often a subject for public debate – both in wider
society and in the political arena. Indeed, the Minister of VWS
was recently asked questions in parliament regarding the prices
of the medicines Lemtrada and Tecfidera.
The manufacturer Genzyme first registered a medicine as a
leukaemia medicine under the name MabCampath. The price for
this medicine was € 17 per milligram; a price that was in line
with the market price for similar leukaemia medicines. Genzyme
then registered the same medicine again, this time for MS, and
named it Lemtrada. Their asking price for the medicine was
€ 618 per milligram, a price that was in line with the market
price for similar MS medicines. Members of the Dutch Parliament
had strong reservations about the fairness of this price increase.
The medicine Tecfidera, which was also registered as a treatment
for MS, was met with the same kind of reservations. This
medicine’s price was € 32.59 per 240 mg, but mass producers
were able to offer the same drug for € 1.73 per 240 mg. Why
was Tecfidera so much more expensive?
The minister answered these questions with general
disapproval: ‘I disapprove of manufacturers choosing to pursue
disproportionately high profit margins over and above accepting
their social responsibility to contribute to healthcare and patients
for reasonable prices. They are putting huge pressure on our
healthcare systems and, in the long run, they are threatening
their own position.’18
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How do manufacturers determine
recommended prices?
Revealing the recommended price late
Usually, the manufacturer only reveals the recommended price in
the Netherlands at or near the market release date, since this is
the moment when it becomes possible for hospitals to buy the
medicine and demand is high. This late revealing of prices can
have adverse effects:
- Spending outside the budget
Medicines are released onto the market throughout the year.
Usually, health insurers and hospitals reach agreements before the
start of the calendar year. If a medicine is released on the market
later, they are then unable to include it in their agreements. At
this point hospitals are faced with costs they had not taken into
account and over which no reimbursement agreements have been
made.
As a result of this situation several hospitals have become more
critical than before when deciding whether to participate in
clinical research into new medicines. Patients who take part in
the research must continue treatment with a medicine after its
registration (if necessary), which leaves hospitals with previously
unknown expenses to pay. An example of a critical consideration
could be whether the research sufficiently suits the hospital’s area
of expertise.
- Harder to say ‘no’
By revealing the recommended price late, the manufacturer
limits the opportunities for doctors, hospitals and health insurers
to carry out cost-benefit analyses. Since the medicine is then
already available to the patient, it becomes harder to say ‘no’ if
the cost-benefit ratio is unfavourable. As a result, the doctors,
FINDINGS > PART 1
hospitals and health insurers feel more or less forced to accept
the recommended price. This would be different if recommended
prices were published long before the launch of a medicine.
19 These medicines were removed from the orphan drugs list after the expiry of the ten year
period of market exclusivity
20 G standard, April 2015
The G standard
The price of a new medicine becomes known, at least locally, as
soon as a hospital purchases that medicine, but there are also
other ways to reveal the price. Manufacturers can decide to
submit the medicine for inclusion in the G standard: the national
medicine price list. For manufacturers the most important financial
incentive to get a medicine onto this list is that pharmacies and
hospital pharmacies order their medicines from it.
Manufacturers are not legally obliged to include their medicines
in a price list. One important incentive not to include a medicine
on the list is the fact that the Ministry of VWS implements
the Pharmaceuticals Pricing Act (WGP) based on this list. In
addition, inclusion in the G standard demands a certain degree of
transparency, making it easier for insurers, doctors and consumers
to compare prices. That could also be a reason not to place a
medicine on the list.
Some examples of medicines that are not part of the G standard
are expensive orphan drugs (or expensive former orphan
drugs) designed to treat cancer and metabolic diseases such as
Fabry’s disease and Pompe’s disease: Myozyme (alglucosidase
alpha), Aldurazyme (laronidase)19
, Replagal (agalsidase alpha)19
,
Fabrazyme (agalsidase beta)19
, Elaprase (idursulfase), Evoltra
(clofarabine), Soliris (eculizumab), Mozobil (plerixafor) and
Vargatef (not an orphan drug).20
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How do prices develop after medicines
are put on the market?
When a medicine becomes available on the market, it has a
recommended price (AIP) and usually one registered indication.
After introduction it is common for more indications to be
registered for the same medicine. The industry has to pay for
registering new indications. Due to the increase in the number
of indications, it is possible for greater numbers and a greater
variety of patients to be treated with the same medication. The
volume sold on the market increases, but this does not usually
lead to a drop in prices. The table below shows some examples
of medicines for which more indications were registered, but for
which the recommended price remained approximately the same.
FINDINGS > PART 1
Medicine ZI-number date AIP at #of registered AIP in #of registered
introduction introduction indications July 2015 indications
adalimumab (Humira) 148888432 Jan 2004 € 1056,26 1 € 1070,33 11
etanercept (Enbrel) 14771918 Mar 2005 € 543,47 5 € 546,44 8
infliximab (Remicade) 13409602 Jan 2003 € 653,98 4 € 602,43 8
trastuzumab (Herceptin) 14612437 Nov 2000 € 704,40 1 € 606,49 3
rituximab (Mabthera) 14219557 Jan 2003 € 614,46 1 € 526,92 4
Bevacizumab (Avastin) 15023753 Mar 2005 € 371,25 1 € 321,08 9
Lenalidomide (Revlimid) 15293939 Sept 2007 € 5298,80 1 € 5083,54 2
Imatinib (Glivec) 14914050 Jan 2004 € 1250,00 1 € 1257,64 9
docetaxel (Taxotere)* 14899396 Jan 2004 € 204,20 2 € 120,83 5
The researchers perspective
A frequently voiced criticism of the government from universities
and research institutes is that too little research is funded using
public money. According to these critics, researchers are forced
to use industry money to finance their research. And if the
government does provide financing, it is often as part of a public-
private arrangement with industry (see the earlier description
of the IMI2 programme). According to universities and research
institutes this means that our society cannot financially benefit
from investments in this kind of research.
* Presently (2015) there are no generic varieties of docetaxel on the market.
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What kind of interactions and
relationships exist between the
pharmaceutical industry and the
healthcare sector?
The pharmaceutical industry and the scientific/medical world are
dependent on one another. Treatment concepts are discovered
during laboratory research that is partly financed with public
money. In the following phase, molecules and eventually
medicines are developed from these treatment concepts. The
research groups involved in this phase are dependent on the
pharmaceutical industry, which possesses the necessary chemical
and biological infrastructure to develop medicines.
Once a medicine has been developed, it is tested on animals and
then on humans in hospitals. Research institutes also develop
treatment concepts, using already existing medicines for new
applications. In both cases, the manufacturer is the patent holder
of the molecules and the medicines. Research institutes also try to
apply for patents on treatment concepts in order to turn a profit.
The NZa investigation appears to show that only a few institutes
are successful in these endeavours, and only to a limited extent.
FINDINGS > PART 1
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What policy measures are available to
influence prices? (WGP)
The Dutch government checks the price of a medicine using
price lists from Germany, Belgium, France and the United
Kingdom. It then calculates the average of these prices and
establishes this as the maximum price. Manufacturers may not
market their medicines at a price higher than this average. The
Dutch government monitors the recommended prices set by
manufacturers. If they exceed the maximum price, then offending
manufacturers are legally obliged under the Pharmaceuticals
Pricing Act (WGP) to lower the recommended price.
Loopholes in the law
In practice, the government only carries out this monitoring
process on medicines that are part of the G standard. Not all add-
on medicines are on this list. If a manufacturer does not allow its
medicine to be included on the G standard, then the government
does not apply the rules of the WGP.
Not lowering prices
Other countries in Europe have laws and regulations that are
similar to the WGP. In these countries, governments also check
price lists in neighbouring countries to see whether or not their
own prices are too high. As a result, when a recommended price
drops in one country, this also affects prices in other countries.
For this reason, it is in the pharmaceutical industry’s best interest
to set recommended prices as high as possible and keep them at
this level.
FINDINGS > PART 1
If a manufacturer is willing to agree to a lower price, this does
not usually lead to a reduction in the recommended price, but
rather to a private agreement with a customer. Nor do pay for
performance agreements or agreements with the government’s
Bureau for Medicine Price Arrangements lead to reduction of the
recommended price in the present situation.
Until now, a manufacturer has never lowered the recommended
price of a medicine in the G standard as a result of unfavourable
cost-effectiveness.
Reference prices affect each other
The month and the order of release in different countries form
part of the market access strategies chosen by pharmaceutical
companies. Manufacturers determine this order by looking at,
among other things, the ‘WGP price’ for each country. Their
goal is to start with the country in which they can succeed in
getting the highest possible recommended price accepted, which
surrounding countries then accept as the norm. However, due to
periodic recalculations of maximum prices, the effect is often only
temporary. This industry strategy has led governments to question
whether the WGP and the reference price system are really the
best way to control and influence medicine prices.
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To date, the Dutch government’s Bureau for Medicine Price
Arrangements has primarily focused on outpatient medicines.
Access to the basic insurance package is offered here as a means
of leverage to reach an agreement on the price of a medicine. It is
more difficult to reach price agreements for inpatient medicines,
since entitlement to SMC medicines is not limited. Even so,
some price arrangements have been made. The government has
succeeded in making price arrangements for two medicines; a
medication for the treatment of Fabry’s disease and a medication
for the treatment of Pompe’s disease.
These price arrangements were preceded by a debate that
was sparked by a concept report published by the Dutch
Healthcare Institute. This report suggested that, considering their
effectiveness, the price of these medicines was too high. For this
reason the Healthcare Institute (conceptually) recommended not
including the medicines in the basic insurance package. A social
and political debate prevented this exclusion, and it was decided
that policy holders were entitled to have access to the medicines.
However, despite this outcome, doubts surrounding the cost
effectiveness of the two medications did not disappear. They
are currently still part of cost-effectiveness investigations
being conducted by the Dutch Healthcare Institute. If the cost
effectiveness of these medicines is determined to be unclear
or unfavourable, then the minister may decide that their
recommended prices should be lowered or that they should be
removed from the basic insurance package. Whether the minister
actually wants to and is capable of doing this, remains unclear.
What policy measures are available to
influence prices? (Price arrangements)
FINDINGS > PART 1
Leverage
For outpatient medicines, the government can use the threat
of exclusion from the basic insurance package as leverage to
persuade manufacturers to agree on a price. Although it is
possible for the minister to exclude a medicine from use in
hospital treatments, this presents more difficulties than the
exclusion of medicines provided outside the hospital. This is
because SMC medicines are automatically included in the basic
insurance package as soon as they have satisfied the state of the
art in science and practice (a satisfaction that doesn’t guarantee
that they are cost-effective). An SMC medicine that meets the
standards of the state of the art in science and practice cannot
simply be excluded from basic coverage. Such exclusion would
require a ministerial decree.
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There is not always advance knowledge of the effects a medicine
will have on a given patient. The effective, ‘appropriate’ use of
medicines can be stimulated by registering certain information
(patient characteristics, method of administration, treatment
results) and sharing this information with treatment providers.
This kind of registration is becoming more common, and yielding
an increasing number or registries, especially in the field on
oncology. The proper creation and use of registries requires
central funding and organisation in order to minimise the
administrative workload for hospitals. According to hospitals this
central funding and organisation is definitely needed, so that
more and higher quality registries can be set up.
In addition, academics have started a variety of initiatives aimed
at labelling medicines based on their actual effectiveness, such
as the ESMO-MCBS (see box). This a reaction to the fact that
medicines are often marketed as being ‘ground-breaking’, when
in reality their impact is somewhat less spectacular.
How should medicines be used?
FINDINGS > PART 1
Objective assessment framework
The European Society for Medical Oncology (ESMO) developed
the Magnitude of Clinical Benefit Scale (MCBS or ESMO-MCBS), an
objective assessment framework for the evaluation of the added
value contributed by cancer medications.21 The ESMO oncologists
want to generate information about the cost-effectiveness of
these medicines by measuring the actual clinical benefits they
provide and assigning them a relative ranking. This information
is also targeted at policy makers. The goal is to guarantee the
accessibility and affordability of medicines. Governments could
also eventually use similar assessment frameworks, for example to
help them make decisions regarding approval for inclusion in the
basic insurance package and/or reimbursement of medicines.
21 http://annonc.oxfordjournals.org/content/early/2015/05/28/annonc.mdv249.long
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How do hospitals purchase medicines?
As soon as a medicine is released onto the market, hospitals
can start negotiating prices below the recommended price.
The degree to which they are successful depends largely on
competition between manufacturers. The buyers’ purchasing
power also has a role to play. Data from 2013 reveals that
hospitals negotiated an average discount on SMC medicines of
5% compared to contract prices they had agreed to with health
insurers.22
In 2013, health insurers negotiated an average discount
of 1% on the contract prices compared to the NZa’s maximum
rates.
Hospitals are responsible for purchasing the medicines that they
use. In many hospitals, this responsibility is still given to the
hospital pharmacy, which negotiates with the manufacturer about
the price of medicines. Medicines are purchased separately from
other materials. However, this system is gradually changing. In
increasing numbers of hospitals purchasing is being carried out
as a collaboration between hospital pharmacies, specialists and
management. The intention here is to achieve better-negotiated
prices.
Collaboration between hospitals and health insurers
TNF alpha inhibitors (biologicals) are a class of medication on the
add-on medicines list. Each of these medicines uses a different
molecule, but they are all used for the same indication. The health
insurer Achmea and nineteen hospitals collectively negotiated
with the manufacturers of these medicines. A ranking was made,
with the cheapest medication at the top of the list. Doctors can
still choose from all the biologicals, but they have agreed to try to
choose the cheapest medicine for 80 percent of new patients.
Hospitals participating in this system receive one third of the
FINDINGS > PART 1
saved expenditure. The remaining savings are then divided
between the insurer and a shared innovation fund. Using this
arrangement Achmea hopes to keep a wide range of treatment
options for hospitals in the market, for an acceptable price. The
pharmaceutical company Janssen-Cilag BV and the Dutch Psoriasis
Association filed a lawsuit against this policy, but lost on all
counts.23
Limited competition between manufacturers
The amount of competition for many new medicines is limited.
It is becoming increasingly common for medicines to be focused
on specific gene mutations. They are an example of Personalised
Medicine: medicines that are registered for only a small group of
patients. This has broadened the arsenal of available medicines,
but has limited their similarity. In addition, indications for similar
treatments are generally never identical, partly due to the fact
that an indication is based on a trial group that has first received
a general treatment. Only when this general treatment fails does
the patient group receive the experimental medicine. But regular
adjustments are made to the standard treatment, which leads to a
change in the conditions under which the experimental medicine
can be administered.
22 This does not automatically mean that the hospital is left with surplus funds at the end of
each year: that depends on other agreements with the health insurer (for example, whether or
not there is a turnover limit).
23 Rechtbank Midden-Nederland, 5 December 2014, ECLI:NL:RBMNE:2014:6753
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How do hospitals purchase medicines?
Price agreements without lowering the recommended price
Hospitals have claimed that it is not possible to negotiate
discounts if there is no competition. Manufacturers are simply not
prepared to lower the recommended price. Sometimes they are
prepared to try alternative solutions, such as pay for performance
agreements (see box).
In addition to the agreements between the government and
manufacturers, agreements are also made at the local level,
between hospitals and manufacturers. Again, the motivation here
is the refusal of the manufacturers to lower the recommended
price. An example of such an agreement is that some hospitals
will only participate in clinical trials if they are offered a discount
on the recommended price when the medicine being tested is put
the market.
Some hospitals and health insurers have also agreed to purchase
a specific, effective medicine under certain circumstances even
though they consider it to be too expensive to include in the
treatment guidelines. A condition of this purchase was that the
manufacturer would reimburse the insurers costs if the medicine
failed to have an effect. This agreement was combined with a
price-volume agreement, the implication of which was that if a
patient became chronically ill, the price of the medicine would
drop (because the purchased volume would then increase).
Hospitals complain that these pay for performance agreements
involve a great deal of administrative work. They are also
displeased by the fact that such agreements allow manufacturers
access to information about the use of medicines.
FINDINGS > PART 1
Pay for performance
In 2012 the CVZ – now known as the Dutch Healthcare Institute
(ZIN) – presided over a pay for performance agreement for the
medicine omalizumab, designed as a treatment for severe allergic
asthma. This medicine was effective, but very expensive. The
ZIN decided that, due to its unproven cost-effectiveness, the
medicine should not be included in the basic insurance package.
As an alternative, the manufacturer agreed to only charge for
medication that led to successful treatment. This system would
then be evaluated after two years, at which time ZIN would advise
the Minister of VWS as to whether or not to include the medicine
in the basic insurance package. This evaluation is due to take place
in 2015.
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FINDINGS > PART 2
How the healthcare system works
The foundations of the Dutch healthcare system are made
up of four laws. These are the Health Insurance Act (Zvw) for
curative medicine, the Long Term Care Act, the Social Support
Act and the Youth Support Act. The Health Insurance Act
(Zvw) is especially relevant to this report.
Questions in part 2
The second part of the NZa’s findings deals with the following
questions:
- What are the healthcare system’s foundations?
- How does the ‘open system’ for access to the basic insurance
package work?
- How are contracts negotiated between health insurers and
hospitals?
- Which signals are there regarding the limited accessibility of
medication?
The most important features of the Health Insurance Act:
- All inhabitants of the Netherlands have compulsory health
insurance. Policy holders over the age of 18 pay a nominal
premium in addition to an income dependent premium.
- Premium differentiation is not permitted.
- Policy holders are free to choose their insurer and can change
insurers annually.
- A compulsory deductible applies to policy holders over the age
of 18. This does not apply to certain types of healthcare (GP,
obstetrics).
- Health insurers are private organisations, not public bodies.
- Health insurers have an obligation to accept: they must accept
everyone who registers for an insurance policy (basic insurance).
- The minister determines what is covered by the basic insurance
package.
- Health insurers have a duty of care to their policy holders. That
means that depending on the type of policy, they must either
purchase enough healthcare or reimburse the costs of this
healthcare. The NZa monitors their fulfilment of this obligation.
- Health insurers receive compensation from the Health Insurance
Fund. This compensation serves to reimburse insurers for policy
holders at a greater risk of incurring high healthcare costs.
The Health Insurance Fund is paid for by revenue from income
dependent premiums and government grants.
polis
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What are the healthcare system’s
foundations?
Health insurers have an important role to play in the current
healthcare system. On the one hand they must purchase
competitively priced and responsible healthcare for their policy
holders (as a result of their duty of care, among other things). On
the other hand they must be transparent in their dealings with
customers within the framework of the Health Insurance Act,
regarding the health insurance policies they offer. The insurers
also benefit from this, since they are private parties and can profit
if they make enough savings (although many health insurers claim
to not be profit-driven).
Insurers compete with each other to offer the best nominal
premium that citizens are obliged to pay. This premium must be
low enough to attract customers, which stimulates insurers to
limit their expenditure. However, since they have a duty of care,
this limitation must not prevent them from providing policy
holders with satisfactory healthcare. This mechanism is central to
the healthcare system.
Medicines in the basic insurance package
The Minister of VWS determines what is covered by basic
insurance in the Netherlands. This includes pharmaceutical
healthcare (medicines and healthcare that is provided from the
community pharmacy) and medical healthcare (specialist medical
care which also includes the medicines dealt with in this report).
SMC medicines that satisfy the criterion ‘state of the art in science
and practice’ (i.e. that the use of these medicines is sufficiently
justified and internationally accepted) are included in the basic
insurance package as long as the patient is reasonably entitled
FINDINGS > PART 2
to the medicine. There is therefore no need for a separate
decision to include these medicines in basic coverage. This means
that the medicines are covered by the insurers’ duty of care;
they are obliged to reimburse the costs of these medicines (for
reimbursement policies) and/or reach agreements with hospitals
regarding the use and reimbursement of the medicines for their
policy holders (for basic policies).
Controlling expenditure
In 2013, the minister made multi-annual agreements with
national sector associations representing health insurers and
healthcare providers, regarding expenditure on healthcare, among
other things. The agreements applicable to specialist medicine
were set out in the so-called ‘Administrative Outline Agreement’.
This agreement specifies that the real growth of expenditure
on specialist medical care until 2017 must not exceed 1% per
year (the maximum for 2012-2013 was 2.5%). Based on this
decree the minister drafts a framework each year: the Budgetary
Framework for Healthcare (BKZ). Part of this framework covers
specialist medical care. The agreement for 2015, 2016 and 2017
specifies the availability of € 20.5 billion, € 20.7 billion and € 20.7
billion respectively for SMC, including the associated expensive
medicines. If expenses should exceed the specified limits, then the
minister can retrieve the excess by charging healthcare providers.
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What are the healthcare system’s
foundations?
Influencing price negotiations
Insurers take the Administrative Outline Agreement into account
during their negotiations with hospitals. The growth limit and
the financial framework specified in the agreement must not be
exceeded. For this reason insurers often reach agreements with
providers whereby an absolute maximum annual limit is set for
declarations (a ‘reimbursement limit’ or ‘turnover limit’).
A hospital then often no longer receives reimbursement above
this limit, even though it has provided healthcare.
The reimbursement of expensive medicines may or may not be
included in such a ‘reimbursement limit’. If they are included,
a hospital runs the risk of using medicines that will not be
reimbursed. The hospital misses out on reimbursements if it
continues to provide healthcare above the turnover limit.
FINDINGS > PART 2
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How does the ‘open system’ for access to
the basic insurance package work?
Once a medicine has been approved for the market, patients
are entitled to treatment with these medicines as part of basic
insurance package. The government no longer has to test them.
This open approach to medicine ensures that new medication
becomes rapidly available to patients in hospitals. The open
entitlement to medical healthcare (and its associated open influx
of SMC medicines) puts a great deal of financial, ethical and
societal pressure on hospitals, prescribers and health insurers.
Many parties consider the open system to be a bottleneck,
especially when combined with macro-management from the
government and management from insurers.
Package measures
The Dutch Healthcare Institute uses risk-oriented package
management. This means that cost-effectiveness is often only
examined after the medicine has already been on the market
for a few years. As soon as judgement has been passed and a
medicine is deemed not to be cost-effective, it is the minister’s
responsibility to decide whether or not to remove the medicine
from the basic insurance package.
These kinds kind of removals are a sensitive issue, and political
and societal lobbyists do their best to prevent them. In order to
prevent ad-hoc decisions and arbitrary behaviour, the Council for
Public Health and Healthcare (RVZ) has recommended setting up
quantitative criteria for removal. Politicians must make decisions
regarding the limits, but in order to get a debate started the
RVZ suggested that a provision should not be allowed to cost
more than € 80,000 per quality adjusted life year (QALY). ZIN has
announced that it will publish a report about cost-effectiveness in
healthcare before 1 July.
FINDINGS > PART 2
Cost-effectiveness
The Dutch Healthcare Institute’s concept advice regarding the
medications for Pompe’s disease and Fabry’s disease led to
negotiations between the Ministry of VWS and the relevant
manufacturers. Based on these discussions, the minister decided
not to exclude these medicines from the basic insurance package.
The grounds on which this decision was made are not clear. The
price negotiations were not public, so it is unknown what the
analysis of the cost-effectiveness of these medicines revealed.
However, it is clear that the manufacturers have not lowered the
recommended prices and the medicines are still part of the basic
insurance package. To date, a medicine has never been excluded
from the medical healthcare designation on the grounds of an
unfavourable cost-effectiveness analysis. Therefore, in the current
situation any proven or unproven (chance of) health benefits is
paid for. As a result it is unclear as to whether the benefits always
outweigh the costs.
24 RVZ, ‘Zinnige en duurzame zorg’ (2006).
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How are contracts negotiated between
health insurers and hospitals?
The health insurer negotiates with healthcare providers regarding
SMC medicines. The resulting agreements are part of the
institution’s total purchase of specialist medical care. The study
revealed a multifaceted situation regarding contracting. A seven-
point summary of the situation is provided below:
Seven characteristics of contracting
1. Care providers purchase specialist medical care as an integral
package, including SMC medication. Many hospitals have a
turnover limit, combined with an obligation to continue providing
care after exceeding the limit. Transfers, or cost posts listed in
separate national budgetary frameworks, are more likely than
other posts to be included in the contract agreements.
2. Whether or not separate agreements are made regarding SMC
medications depends on the size of the hospital, the revenue for
medications and/or the market share that the health insurer in
question has within the hospital. UMC’s and specialised hospitals
are more likely to make separate agreements, for example.
3. In some instances, these special agreements include a separate
sub-limit, but they are more likely to deal with a form of cost
adjustment when the integral hospital limit has been reached.
FINDINGS > PART 2
4.Cost adjustment agreements often involve orphan drugs, or to
a lesser extent oncolytics. These categories fall under the no-risk
part of risk equalisation. Furthermore, resources transferred in
the first year (or years) after transfer are often subject to cost
adjustments.
5. At hospitals where medications are a relatively small segment
of revenue, no sub-agreements are made and the compensation
of medication falls within the total agreement (often a fixed sum
or a ceiling agreement).
6. Medications are rarely or never subject to volume agreements.
7. Concentration policies primarily pertain to orphan drugs.
Health insurers prefer that patients are only administered these
drugs in specialised centres, such as a UMC or the NKI-AVL, so
they make agreements with these centres.
Problems according to health insurers
Health insurers indicate that they experience the open adoption
of new innovative medications as problematic – especially in
combination with a lack of timely information or an explicit link with
the Administrative Outline Agreement. Besides, insurers state that
they miss the assessment of an impartial body regarding the added
value of a new medication (also in relation to the existing therapies)
when new medications are adopted. People are living longer, and as
a consequence they require more care. Moreover, new medications
are extremely expensive. A strict financial limit presents an immense
challenge to all parties involved in the purchase of that care.
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Which signals are there regarding the
limited accessibility of medication?
At the moment, SMC medications are available throughout the
sector. Patient associations confirm this, and they have provided
no concrete examples of patients who have not received certain
medications due to financial reasons.
And yet, accessibility is no longer a certainty. Many parties are
concerned about the accessibility of medications in the future.
The figures indicate that expensive medications are becoming an
increasingly large segment of the total costs. From the interviews,
the NZa has noticed that medications must occasionally be
provided upon the threat of legal action, or even actual suits
brought in court.
Transfer for financial reasons
The NZa has found no hard evidence that patients are transferred
to another hospital due to financial reasons as soon as they
need an SMC medication that is too expensive. The case studies
do show that ‘transfers’ occasionally occur, but it has not been
possible to objectively prove that these took place based on
financial considerations.
Transferring patients is not in itself wrong or illegal, as long
as good agreements are made with the health insurer and the
insurer provides an adequate solution to comply with its duty
of care. However, these conditions require that better and more
specific agreements are made regarding medications in the
contracts between hospitals and insurers.
Some experts also indicate that doctors and hospitals are
hesitant to report undesirable referral behaviour or the denial
FINDINGS > PART 2
of medications to patients who are eligible to receive them
according to treatment guidelines. After all, if they reported such
incidents, they would be admitting to having acted in conflict
with the guidelines. A specialist can be subject to disciplinary
measures based on such actions, and hospitals violate the terms
of the Care Institutions (Quality) Act.
The media and our interviews provided many reports about
refusing patients or withholding medications. However, this study
found no concrete evidence of this, and the parties provided
no evidence themselves. This may be due to the fear of legal
retribution (disciplinary action, administrative law, etc.). Based
on this research, we therefore cannot conclude that the health
insurers have not complied with their duty of care regarding SMC
medications.
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Conclusions
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Accessibility under pressure
Based on its research, the NZa concludes that there is a
realistic chance that the accessibility of treatment with
medications will be placed under pressure in the near
future. The causes are partly due to the choices made in the
organisation of the health system and health care financing
policy.
The figures show that spending on SMC medication is growing
faster than spending on other forms of care. Spending on
medication is also rising faster than the available health budget,
so total expenditures place pressure on specialist medical
care. The transfer of medications to the category of specialist
medical care reinforces this effect, causing a growth in total
SMC expenses. The NZa has received signals that patients are
being withheld treatment due to this situation, but this study
uncovered no figures to justify this claim. Also, no evidence has
been provided, despite explicit requests made by the NZa for such
evidence.
This chapter provides a summary of the primary causes
(conclusions). The following chapter will then suggest possible
solutions (recommendations).
CONCLUSIONS
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CONCLUSION 1:
Legally instituted monopoly and
inelastic price demand
Legally instituted monopoly
There is a strong desire in society to develop medication for
every conceivable illness, or to have such medication developed.
This trend leads to an improvement in general health, but
also to higher expenditures on medication. Moreover, it is not
always possible to predict which innovative medications will
be developed in the near future, and which of those will have
clinically relevant added value.
In order to encourage the development of new medications
and medications for small groups of patients, national and
international governments utilise the following instruments:
- Direct and indirect subsidies.
- Extended market exclusivity (by EMA) and patent law.
Patent protection and market exclusivity both have significant
effects on the functioning of the health care system. Patent law is
intended to give innovative companies - including pharmaceutical
companies - the opportunity to earn a return on their investments
for research and development in a market environment. Brand
protection creates monopolies on the supply side for certain
pharmaceuticals over a longer time period. This in turn creates
a failure of the market regulation, with consequences for price
formation.
Inelastic price demand
Medications for specialist medical care are subject to open
admission criteria to the basic insurance package. If a medication
CONCLUSIONS
is part of the accepted standard intramural treatment according
to the guidelines of a specific profession group, then it is almost
always covered by insurance in practice. This applies both to
registered indications and to non-registered indications for off-
label use.
This situation has the following effects:
- Insured patients want to take advantage of the newest
medicines for their disease, so the demand is guaranteed. Since
they are insured, the high price is not a concern to them.
- Insured patients have an unlimited ‘right to care’, without a
financial limit per insured person.
- Health insurers are obliged to compensate treatment with
medication due to their duty of care.
- Based on the treatment guidelines, care providers are virtually
obligated to offer the treatment.
The cumulative effect of these situations is a very inelastic price
demand. That means that the demand from the insured patients
does not decrease as the prices rise.
In summary: There is both a legally instituted monopoly for the
manufacturers, combined with an inelastic price demand. In
such a situation, high prices are only to be expected and the
prices will not decrease as demand increases (assuming that the
supplier wishes to maximise its profits). The NZa also considers
that the price regulations applicable to the pharmaceutical
market are not very effective.
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CONCLUSION 2:
Growing demand for care and limited
financial resources
Health insurance is paid from communal funds. In order to
manage expenditures, the government sets budgetary frameworks
for various forms of health care. For specialist medications, that is
the framework for specialist medical care.
This framework is not based on a realistic cost estimate,
but rather on a policy-based desire to limit to the growth of
expenditures; a limit that is also magnified by the general
agreement. This is how the development of the insurance
premium is managed. However, it also places a maximum limit on
the space for new treatment methods or resources, unless extra
funding can be found by substitution with (or savings on) other
forms of care.
The distribution of the funding over the various forms of
treatment is not an issue that is decided on by elected
representatives, but is rather entirely decentralised. This
distribution is in fact left to local market parties, although the
insurers are subject to their duty of care, and healthcare providers
must provide treatment in accordance with the guidelines. That
means that the decision on which to spend the premium income
is mainly influenced by cost-benefit considerations at the local
level.
In the interviews, the doctors indicate that decisions about the
use of medication are more likely than in the past to be made by
the hospital administration and not in the treatment room.
CONCLUSIONS
In summary: There is a tension between the unlimited demand
for care on the one side, and the limited financial resources on
the other. This is the case for all forms of care, but expensive
medication adds another unique aspect in that the expenditures
for these medications are growing faster than other expenditures.
If nothing is done to slow this trend, then there is a risk that the
medication will become less accessible to patients.
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CONCLUSION 3:
Positive and negative stimuli for the
affordability and accessibility of
medication
Both the healthcare providers and the health insurers bear
financial risks for their expenses and income. That gives them an
incentive to limit their costs and expenditures, which in general
benefits the affordability of care. Both groups therefore also have
an incentive to keep the price of medicines low, which in principle
increases the accessibility of these medicines.
Together, these groups form a potential counterweight to parties
such as the manufacturer, which wants to keep the price as
high as possible. However, due to the manufacturer’s monopoly
position (see conclusion 1), they have only limited success in
actually keeping prices low.
Considering their financial interests, care providers and insurers
do not only have an incentive to keep prices low. If they are
unsuccessful, then they also have a tendency to limit the access to
expensive medication, as then they would not have to pay for it.
This tendency manifests itself differently in each group:
- Healthcare providers can tend to refuse patients or refer them to
another institution as soon as they receive less in compensation
than they spend on that patient. Treatment guidelines should
remove this incentive.
- Health insurers consider an insured patient who requires
expensive medication to be an unattractive customer if they do
not receive compensation for the high level of risk that such
a patient entails. Premium differentiation is not permitted,
but it is possible that health insurers would try to find other
CONCLUSIONS
‘solutions’. Moreover, there is a chance that they will pass on
the financial risk to the care providers.
The NZa has received several signals indicating that the treatment
guidelines provide insufficient guarantees for the provision of
medication to patients who need it. However, no hard evidence
of specific cases was uncovered during this study. Also, no
reports were received of cases of premium differentiation or
risk selection. The NZa did observe that there were some cases
of financial risk being passed on by the health insurers to the
healthcare providers. The NZa therefore concludes that the
manner in which the healthcare system currently functions
presents an increased risk of such behaviour.
In summary: Healthcare providers and health insurers will try to
keep the price of medication low, but if they are not successful in
doing so, they will also try to limit their financial risks by refusing
patients or coverage. Manufacturers have a disproportionally
strong position in the market, which makes this a realistic risk.
The NZa monitors health insurers to enforce their duty of care.
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6
Recommendations
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Accessibility under pressure
Based on its research, the NZa has concluded that the
accessibility of specialist medical care is increasingly under
pressure. However, there do appear to be methods for
relieving that pressure. The NZa has formulated twelve
recommendations in which it summarises potential
bottlenecks, proposes suggestions for improvement and
highlights the roles played by the main parties responsible
for implementing these improvements. The 12th
recommendation differs from the first 11 in that it deals with
the possibility of implementing more fundamental changes.
General Recommendations
First, the NZa emphasises that medicines should not be
approached as an isolated issue, but rather as an integral element
of specialist medical care. Such care requires many expensive
facilities and forms of treatment that involve high costs per
patient. When we look at the costs of medicines, we should
also examine possible savings in other aspects of care as well.
This study uncovered a complex network of individual laws and
regulations in the areas of price regulation as well as package
management. Many institutions are also involved in implementing
and enforcing these laws and regulations. The NZa recommends
organising this in a more clear and transparent manner. The NZa
also emphasises that there is no single, all-encompassing solution
to the problem of accessibility and affordability of medicines in
SMC.
The recommendations below regularly refer to initiatives that
should be dealt with at the European level. The NZa observes
that these recommendations may require a longer time frame
due to the complexity in implementing the recommended
RECOMMENDATIONS
changes. Regarding these recommendations, if it is not possible
to implement them at the European level, then it may be worth
considering adopting national measures. The implementation of
the recommendations will require the efforts and commitment
of many parties (healthcare providers, health insurers, specialists,
the pharmaceutical industry, government, NZa, ZiNL, CBG and
others).
Recommendations
The first 11 recommendations can be divided into four categories:
- Package measures (1)
- Purchasing measures (2, 3 and part of 4)
- Price measures (part of 4, 5, 6 and 7)
- Other measures (8, 9, 10 and 11)
It may be worth considering the implementation of more
fundamental changes in the manner in which specialist medical
care, especially SMC medicines, are purchased and compensated,
as this would lead to a different relationship between healthcare
providers and health insurers. NZa does not advocate a system
reform, but the current organisational model could include a
different compensation model for SMC medicines.
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Accessibility under pressure
1. More focused package management
2. Hospitals negotiate better purchasing prices from
manufacturers
3. Draw up smarter contracts between the health insurer and the
healthcare provider
4. Creating market influence for the purchase of medicines
5. Amend and apply the Pharmaceuticals Pricing Act (WGP)
6. Require price adjustments for the expansion of indications and
volume
7. Evaluate European stimulus measures
8. Create insight into the development of pharmaceutical prices
in a timely manner
9. Manage volumes and encourage proper usage
10. Improve registrations and obtain greater insight into actual
effectiveness
11. Expand budgetary frameworks if possible
12. Consider a different compensation model
RECOMMENDATIONS
The measures described in this chapter are the result of the
study’s findings. They are grouped in a random order, and all
relate to the other measures. The effects and consequences of
implementing these recommendations have not been studied in
detail. Further research is therefore necessary.
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1. More focused package management
Allowing open access to medications makes drugs available
quickly for patients and hospitals, but there are also
disadvantages to open access. For example, not all medicines
are included in a review process, and according to some such a
review process comes too late, after the drug has been released
on to market and is already in use.
In theory, drugs that are included in the basic insurance package
can also be removed from the package, but this rarely occurs in
practice. Removal from the package is a politically sensitive topic,
because patients are often already accustomed to using the drug.
(See the discussion about drugs for Pompe disease and Fabry
disease.)
RECOMMENDATIONS
NZa recommendations:
Research or package measures, such as a more closed system, would
be desirable. Such a system would include:
- the minimum revenue threshold for evaluation could be adjusted.
At the moment, the threshold is € 2.5 million per indication, but
that may cause manufacturers to tend to avoid review via a low
revenue estimate per indication;
- conditional admission should be truly conditional, with hard requi-
rements for research and justification;
- consider submitting every innovative medication to an evaluation
‘at the front door’ (during the registration process). This would
mean that the current immediate accessibility would be elimina-
ted. It may also result in additional administrative expenses. In
order to ensure that consistent evaluation at registration works
properly, we will have to make agreements with other countries.
Package admission criteria
Politicians could consider implementing strict criteria for
admission to the basic insurance package, as the issues of
package admission criteria and the evaluation of drugs prior to
admission is a political decision. Political decision makers should
also determine whether the costs of medicines should play a
decisive role, or if there should be a maximum compensation
for each quality-adjusted life year (QALY). The NZa has no
recommendations pertaining to these matters.
If political representatives decide that a maximum reimbursement
should be instituted, then that would mean that medicines can
be excluded from the medical care package due to unfavourable
cost effectiveness considerations. This will in turn limit the
accessibility of the medicine. We therefore recommend discussing
this issue at the European level. The NZa notes that a hard
QALY limit for admission is not the same thing as a limit on
expenditures per patient. Such a limit would be an even more far-
reaching measure.
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2. Hospitals negotiate better purchase
prices from manufacturers
The NZa has observed that many hospitals’ purchasing processes
have room for improvement. It is vital that steps be taken to
optimise purchasing methods and strategies. In many hospitals,
the purchasing of medicines is a separate and independent
process that is assigned to the hospital pharmacist, and not
a topic for discussion in the boardroom. This is in contrast to
purchasing negotiations with the health insurer; boards actively
participate in this process. The result is that the purchasing and
sales processes are often not coordinated with one another.
RECOMMENDATIONS
NZa recommendations to hospitals:
- Participate in the purchasing process for medicines at the board
level, so that purchasing and sales processes can be better
coordinated.
- Combine the efforts of purchasers, pharmacists and medical
specialists, so that they can negotiate better terms and
purchase more effectively in order to prevent wastage. The NZa
notes that the Competitive Trading Act places certain limits on
this.
- Establish hospital-wide policy on which drugs can be prescribed
and which cannot. The patient’s interests must be leading
in this. These prescriptions should not differ per specialist,
but should rather be based on the treatment guidelines. If
there is a choice between drugs with the same effect, then
cost considerations could be given a more prominent role.
These considerations may also aid the efficient purchasing of
medicines. See also recommendation 9.
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3. Draw up smarter contracts between
the health insurer and the healthcare
provider
Health insurers and healthcare providers appear to be able to
take more measures to ensure the accessibility and affordability
of medicines when negotiating contracts. They could combine
their efforts when purchasing medication in order to help reduce
prices. They could also deal with medicines in a more intelligent
manner in the contracts they negotiate with one another.
RECOMMENDATIONS
NZa recommendations:
- Negotiate smarter contracts to prevent hospitals from
experiencing financial problems, displaying undesirable referral
tendencies or providing patients with too little treatment
(undertreatment).
For example, health insurers and healthcare providers could
make more specific agreements regarding the purchasing
of SMC medicines. One option involves volume agreements
regarding these drugs. Once the maximum volume has been
reached, a healthcare provider could negotiate with the
health insurer about extending the provision of these drugs.
Agreements between hospitals and health insurers should not
result in confusion for patients. This is also one of the health
insurer’s responsibilities (duty of care).
- Evaluate the proper position of medication in the distribution
of risk. It is remarkable that even oncolytics with a large patient
population per year still fall under the risk-free segment. These
are occasionally relatively inexpensive drugs. Insurers appear to
be more willing to make cost adjustment agreements for these
drugs.
Monitoring the duty of care
Health insurers are required to abide by their duty of care to-
wards their policy holders. The NZa monitors compliance with
this duty of care, and will give greater priority to accessibility of
medicines in its monitoring efforts. If the health insurers do not
comply with their duty of care with regard to the provision of
SMC medicines, then the NZa will intervene.
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4. Creating market influence for the
purchase of medicines
Patents offer manufacturers protection against competition from
similar (copycat) products. This means that the manufacturer of a
new drug by definition has a certain degree of market influence.
The patent model also reinforces the manufacturers’ earnings
model and offers opportunities for maximising prices.
RECOMMENDATIONS
NZa recommendations:
- Create purchasing power to negotiate with the manufacturers
of medicines (within the terms of the Competitive Trading Act).
The NZa has observed four purchasing variants during this
study:
a) Joint purchasing by a group of hospitals
Hospitals combine their efforts by purchasing together.
They have similar interests in purchasing, which can make
cooperation very beneficial.
b) Purchasing by the Dutch government, perhaps in collaboration
with other European governments
The health insurer and the hospital have a shared interest:
purchasing medicines for the lowest possible price. But
they also have divergent interests. For example, the health
insurer will use the lower price to reduce overall health care
expenditures.
Hesitation
At the moment, a single health insurer purchases TNF alpha
inhibitors on behalf of 19 hospitals. One third of the savings
realised in this way goes to the hospitals, one third goes to the
insurer and one third goes to an innovation fund working in
the interests of all parties. (For a hospital, this joint purchasing
is only more beneficial than other constructions if the other
purchasing forms would result in less than a third of the
negotiated discount). Other insurers and hospitals are still
hesitant as to whether or not to begin with joint purchasing.
One of the counter-arguments is that when individual hospital
pharmacies purchase drugs, they often receive package discounts
(discounts on other drugs that the pharmacist would like to
order). They might miss out on these discounts if a health insurer
is responsible for purchasing.
However, the NZa sees opportunities in a cooperative approach
by insurers and hospitals, as a joint approach would result in
greater purchasing power. It is therefore worth considering
applying joint purchasing at a greater scale. However, such forms
of cooperation must remain within the limits of the Competitive
Trading Act.
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4. Creating market influence for the
purchase of medicines
c) Price agreements negotiated by the Dutch government
Few price arrangements seem to have been made for inpatient
SMC medications. In fact, such arrangements have only been
made for Pompe disease and Fabry disease. Many more such
agreements have been made for outpatient care. For outpatient
drugs (which fall under ‘pharmaceutical healthcare’), the
government can exert serious pressure to keep the prices from
rising too high. One of these pressure tools is admitting the
drugs to the package.
- Evaluate whether the current reimbursement model (via a TTP)
is the best solution for the long term. It appears that health
insurers do not profit directly from these discounts, so the
variable medicine costs remain too high.
- Publish the results of negotiations. This will eliminate any doubt
about the effectiveness of these negotiations.
- Study how more arrangements can be negotiated for hospital
drugs (which fall under the category ‘medical healthcare’).
RECOMMENDATIONS
d) Purchasing by the Dutch government, perhaps in collaboration
with other European governments
Almost all participants in this study see the most potential in
this option. They would like to see European countries combine
their efforts, formulate clear and simple frameworks and have
enough pressure (such as the option of allowing manufacturers
to utilise collective compensation). A strong purchasing
position should be created to guarantee the accessibility and
affordability of new innovative medicines. If this is not feasible
at the European level, then the parties could examine whether
it is feasible at the national level for all SMC medicines or a
portion of these medicines to be determined at a later date.
We note that in the Dutch decentralised private care system,
nationwide purchasing will be difficult to organise.
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5. Pharmaceuticals Pricing Act (WGP)
adaptation and application
Most countries in Europe, including the Netherlands, use a
system similar to the Pharmaceuticals Pricing Act (WGP). If the
advisory price goes down in one country, it could have an effect
on the sale prices in other countries. The national legislation
and regulations in individual European countries can therefore
influence one another. But this raises the question as to whether
that is the intention of such legislation and regulations. For
example, do such regulations limit the market forces for
medication?
At the moment, manufacturers regularly decide not to include a
medication in the G standard, which means that the WGP does
not influence the price of that medication.
RECOMMENDATIONS
NZa recommendations to the Dutch government:
- Calculate a maximum legal price for all medication (the ‘WGP
maximum price’). This should also include drugs that have not
been included in the G standard.
- Examine whether the Dutch WGP can be amended. To make
medicines more affordable, it may be beneficial to lower the
maximum prices by means of an amended WGP. One possible
amendment could be that the Netherlands not only consider
the four neighbouring countries in its price limits, but those
of other EU member states as well. Another system for setting
prices is also conceivable.
- Begin a discussion at the European level regarding the utility
and necessity of the current WGPs, in order to improve
the European pricing policy. At the moment, the individual
countries’ regulations keep one another in check
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6. Require price adjustments for the
expansion of indications and volume
The NZa has observed that new innovative medicines are often
released to the market for a specific indication - and therefore for
a relatively low potential volume. In practice, for manufacturers
it is important to be able to count on a high-recommended price
when they introduce a medicine to the market for a small group
of patients, as they need to cover their costs. The NZa notes
that once a drug is registered, the indications (and therefore
the volumes) often increase. This gives more patients access to a
specific medication, but the expansion of the indication area and
sales market does not usually move the manufacturer to lower
their prices; those prices remain as high as they were when the
drug was introduced to the market.
RECOMMENDATIONS
NZa recommendation:
- Examine whether it is possible or beneficial to include provisions
in national and/or European legislation and regulations that
lead to a reduction in the recommended price when the patient
group expands in real terms (on- and off label).
NB. A possible negative consequence of such changes to
legislation and regulations is that manufacturers will have less
incentive to register indications. Another possible negative
consequence is that it may cause the initial recommended prices
to rise as manufacturers calculate the eventual reduction in
prices into the initial price.
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7. Evaluate European stimulus measures
Some European regulations seem to have had unintended
consequences, and currently stand in the way of the proper
functioning of the pharmaceutical market. This applies to the
regulations regarding orphan drugs, among other medicines.
The figures published in this report show that the number of
orphan drugs is increasing. Manufacturers value that status for
their products, as the European Medicines Agency (EMA) offers
ten years’ ‘market exclusivity’ for orphan drugs, during which
it will not accept registration requests from competitors. This
is separate from the patent protection offered by the patent
office. The purpose of market exclusivity is to encourage the
development of drugs for rare, serious diseases. These kinds of
incentives give manufacturers an interest in researching and
registering drugs for a niche market. Such a specific indication
marks the drugs as ‘orphan drugs’. The orphan drug status can
be issued for each individual niche indication. After ten years,
medicines lose both their orphan status and their EMA market
exclusivity.
This means that stimulus measures can give an incentive for the
industry to research and register a medicine strategically for a
small population of patients with a serious disease, so that it can
meet the orphan drug criteria. Meanwhile, the industry can study
which other groups of patients may benefit from the drug, and
then register it for those indications as well, without losing the
market exclusivity that comes with the orphan drug status.
This means that the current orphan drug policy may have a
detrimental effect on the affordability and accessibility of drugs
for serious conditions.
RECOMMENDATIONS
NZa recommendations:
- Evaluate whether the current orphan drug policy has its
intended effect at the European level. Based on the results of
this evaluation, the parties can then decide whether to amend
the relevant European regulations.
- Decide to release new drugs for small numbers of patients to
the market earlier at the European level.
Current research for new drugs to fight orphan diseases often
takes much longer than other studies, as it is more difficult to
obtain the required degree of certainty and to put together
a test group of patients who can be studied. It may be worth
considering placing fewer requirements on releasing such drugs
to the market, and to give manufacturers an opportunity to test
the drugs under real-life conditions.
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8. Create insight into the development
of pharmaceutical prices in a timely
manner
One of the most common bottlenecks reported by researchers
is that the manufacturer only announces the price for the SMC
pharmaceutical at a late phase in the development, just before its
introduction to market. This means that hospitals, health insurers
and the government cannot anticipate the prices in advance.
Timely information is necessary:
- if a national government wants to make balanced decisions –
especially in markets with an open admission to the package;
- if the government proposes a more closed admission system,
such as if it wishes to consider cost effectiveness as a factor in
determining the contents of the basic package;
- if the government or private organisations wish to draft policy
for the purchase of SMC medicines.
RECOMMENDATIONS
NZa recommendations:
- Examine how to force manufacturers to release information
about the price of new medicines, including legal obligations.
It may be possible to make binding agreements with the
manufacturers as to the moment the prices are announced,
especially if they benefit from European or national subsidies
for pharmaceutical research.
- Study how to make information about developments in the
pharmaceutical market available for all interested parties over
the short and long term.
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9. Manage volumes and encourage
proper usage
The parties all agree that biosimilars are a good alternative to
biologicals for new and former patients. However, opinions differ
as to whether a patient who is already using a biological can
continue treatment with a biosimilar. The Medicines Evaluation
Board (CBG) has recently updated its position on biosimilars.
According to the CBG, it has been proven that there are no
relevant differences between a biosimilar and a biological;
the medicines are sufficiently similar in quality, safety and
effectiveness.25 The parties also agree that wastage should be
prevented as much as possible.
RECOMMENDATIONS
NZa recommendations:
- Give the option of using biosimilars a prominent place in hos-
pital forms. Have health insurers, hospitals, pharmacists and
medical specialists play an important role in deciding whether
or not to switch to biosimilars. It is essential that such a switch
should have no detrimental effects for the patient, such as me-
dical side effects.
- Constantly invest in limiting wastage, for example by making
purchasing activities smarter. It may be beneficial to study the
minimum dosage at which a pharmaceutical can have the desi-
red effect. Research on arthritis patients has shown that lower
dosages do not negatively influence the effect of the drugs.26
- Give the issue of suitable use of SMC medicines a more promi-
nent place in the thoughts and actions of treating physicians
and insurers. Research into the actual effects and side effects of
the drugs may help in this aspect. The goal should be to make
a balanced consideration as to whether or not to use an SMC
medicine.
25 Source: CBG
26 Article, ‘Disease activity guided dose reduction and withdrawal of adalimumab or
etanercept compared with usual care in rheumatoid arthritis: open label, randomised
controlled, non-inferiority trial, van Herwaarden et al, BMJ 2015;350:h1389.
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10. Improve registrations and obtain
greater insight into actual
effectiveness
For SMC medicines, it is not always known which effects they
will have on which patients. Where the specialist or pharmacist
registers both the patient characteristics and the use of treatment
results and shares that information with other treating physicians,
this increases the effective use of medications. The number of
these types of registrations are increasing, especially within the
field of oncology.27
RECOMMENDATIONS
NZa recommendations:
- Encourage the formation of these registries. Many participants
have expressed their preference to organise the formation
of these registries from a central point, and they would give
medical specialists an important role in this task.
- One excellent example is the ESMO initiative, in which
medicines are labelled based on objective evaluation criteria.
Governments can use tools such as these to decide which
medicines should be compensated from social funding; often a
very difficult decision. Registries such as these could also offer
tools for negotiating better purchase prices.
27 One disadvantage of this system is that it increases the administrative burden. The
effectiveness of such registries must therefore be realistically assessed. It must offer a realistic
perspective on relevant data for daily practice that can also result in cost reduction.
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11. Expand budgetary frameworks
if possible
Considering all of the developments, the NZa cannot rule out the
option that the Minister of VWS may have to create extra space
in the budget in the future. This possibility is backed up by the
statistics showing that medicines are becoming an increasingly
larger share of hospital expenses. The NZa emphasises that
any expansion of budgetary frameworks must take place in
combination with the other measures described in this report.
RECOMMENDATIONS
NZa recommendations:
- Consider market developments and package decisions when
drawing up budgets or budgetary frameworks. This does
not mean that budgets should be expanded with every new
development. The primary goal is to make the effects of certain
developments more transparent, such as the introduction of
new medicines to the market. It is also important to indicate
where economies of scale are expected.
- Do not create a separate budgetary framework for medicines.
After all, there is no separate budget for other cost posts,
such as ‘medical equipment’. A separate budgetary framework
creates extra fragmentation within specialist medical care, and
that should be avoided if possible. If there is a need for more
specific or earmarked budgets for medicines, then it is the
responsibility of the parties in the field to organise the specific
details in the contracting phase.
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12. Consider a different compensation
model
In this report’s conclusions, the NZA described the bottlenecks
in the current model that increase the risks to accessibility.
The measures prescribed to deal with this can help to relieve
that pressure. If more fundamental changes are taken into
consideration, then the section below may offer some inspiration.
The conclusions of this report show that:
- the manufacturers of innovative SMC medicines hold a
monopoly position;
- there is a limited budgetary framework available;
- there is no public decision making regarding the distribution of
these limited financial resources;
- there are extra negative incentives for healthcare providers and
health insurers regarding SMC medicines, especially due to the
high variable costs.
Below is a new compensation model that may offer relief to
these bottlenecks. It presents a general concept, not a detailed
elaboration of the compensation model.
Core elements of an alternative model
- As package manager, the government distributes the growth in
the available budgetary framework among the specific target
groups, consisting of clusters of diseases/diagnoses such as
oncology, rheumatology and diabetes.
- Another compensation model will be provided for the
pharmaceutical industry. The government will agree to
compensate the manufacturer for innovative medicines. This
RECOMMENDATIONS
compensation will consist of a fixed amount and a variable
amount.
- The fixed amount will cover the research and development
efforts, while the variable amount will cover production and
distribution costs. The variable amount will form the maximum
purchase price that hospitals will pay for the drug. This will
require both an amendment to the WGP as well as a change in
the work methods for the Price Arrangement Bureau.
- Medical specialists and hospitals will cooperate in a regional
network for the indicated target groups. This should not lead
to more hosptial mergers, but the regional networks will make
agreements as to the optimal treatment, as well as standards
and protocols for treatment.
They will also agree on choices from among various treatment
options and at which location individual patients can obtain
optimal treatment.
- The regional networks will also manage the budget for the
patient groups and make arrangements with health insurers
regarding the amount of the regional budget.
- The medicines that are included in compensation agreements
with the manufacturer are part of a medicine package that
regional networks can use to purchase drugs for a lower
purchase price. The networks are free to choose other drugs,
but then they will have to negotiate with the manufacturers
themselves. As the package manager, the government must
identify a sufficiently broad package for the regional networks.
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12. Consider a different compensation
model
This alternative compensation model offers several advantages in
comparison to the current situation:
- The distribution of resources among the target groups will
become a public issue instead of a local issue. This will clarify
which priorities are given to treatments.
- A stronger purchasing position will be created in relation to the
suppliers of medication; both the networks and the government
will play a role in this.
- Treatment methods can be standardised and optimised within
the regional networks. This will improve both the quality and
the effectiveness of the care.
- The networks may also make agreements as to which patients
will be treated at which location. The scale of the networks
will make it easier to allocate resources and substitutions. It
will also be simpler to deal with fluctuations in the numbers of
patients.
For consumers, it must be clear in advance what they can expect
from the treatment from the regional networks, and which
locations they can turn to for treatment. Both the regional
networks and the health insurers must inform their clients about
these facts.
RECOMMENDATIONS
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Research commission and objectives
The Minister of Public Health, Welfare and Sport (VWS) has
asked the NZa to conduct research into the affordability and
accessibility of medicines in specialist medical care. This request
was formulated in a letter dated 11 March 2015 (ref: 730604- 13
3793-GMT). The minister’s question was as follows:
“Can institutions for specialist medical care, doctors and health
insurers continue to ensure that expensive medicines will remain
accessible and affordable to patients in the future? To what
degree do patients experience obstacles to such affordable
access? And where is there possible room for improvement?”
A team from the NZa conducted this research project in the
period from March to June 2015. The team consisted of
qualitative and quantitative researchers from a number of NZa
units. The team collaborated with the National Health Care
Institute for the quantitative analysis.
The NZa set the goal of answering the main question as it was
formulated. To do so, the research team had to identify:
- how the current financial chain for medicines is structured;
- how institutions for specialist medical care, doctors and
health insurers currently ensure that expensive medicines are
accessible and affordable to patients;
- to what degree they encounter limitations to such affordable
access, and whether these limitations have the effect of raising
prices;
- possible areas of improvement.
Consultation
The NZa conducted this research in an impartial and deliberate
manner. In addition to surveys among hospitals and health
insurers, literature research and analyses of available data,
the NZa also conducted interviews with patient associations,
hospitals, health insurers, medical specialists, manufacturers,
universities, attorneys and other experts. These interviews
provided very valuable information. The findings, analyses and
conclusions were then submitted to review by eight professors
from a variety of fields of expertise.
This review also provided valuable information. The minister
had asked the NZa to deliver this research report prior to 1 July
2015. The NZa also told the Dutch House of Representatives that
the report would be published before the summer recess. This
meant that the research had to be completed within a very short
time frame. Due to the short time available, it was not possible
to consult branch parties before publishing the report. However,
these branch parties will have an opportunity to reply to the
report shortly after publication. We will include these replies in an
addendum that will be published before 1 August 2015.
More information
The following pages include a summary of the research approach.
For other questions about this study, please contact the NZa
Information and Service Centre at: info@NZa.nl.
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References
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Research approach
Interviews
As part of the study, the NZa conducted dozens of in-depth
interviews with patient organisations, hospital boards, hospital
pharmacists, medical specialists, health insurers, government
organisations, manufacturers and independent experts. The
following parties participated in these interviews:
- Academic Medical Centre (AMC)
- Authority for Consumers and Markets (ACM)
- Antoni van Leeuwenhoek / Netherlands Cancer Institute
(AVL/NKI)
- Association of the Dutch Generic Medicines Industry
(BOGIN)
- Pharmaceutical Price Arrangement Bureau of the Ministry of
VWS
- The Medicines Evaluation Board (CBG)
- Crohn and Colitis Ulcerosa Association Netherlands (CCUVN)
- Erasmus Medical Centre Rotterdam
- The Haemato Oncology Foundation for Adults in the
Netherlands (HOVON)
- HollandBIO
- Health Care Inspectorate (IGZ)
- Netherlands Comprehensive Cancer Organisation (IKNL)
- KienLegal
- Leijnse Artz Attorneys
- Patientorganisation Livewithcancer
- Dutch Association of Internists (NIV)
- Dutch Federation of Consumers and Patients (NPCF)
- Dutch Society for Hematology (NVH)
- Dutch Society of Pediatrics (NVK)
- Dutch Society of Medical Oncology (NVMO)
- Dutch Society of Rheumatology (NVR)
- Dutch Association of Hospital Pharmacists (NVZA)
- Nefarma
- Pels Rijcken & Drooglever Fortuijn Attorneys and Notaries
- Pharmo
- Radboud University Medical Centre
- Rheumatology foundation
- Sint Maarten Clinic
- St. Antonius Hospital
- University Medical Centre Utrecht
- University Medical Centre Groningen
- Utrecht University, Department of Pharmaceutical Sciences
- Association of Collaborating Parent and Patient Organisations
for Rare and Genetic Diseases (VSOP)
- Achmea health insurance
- CZ health insurance
- Menzis health insurance
- VGZ health insurance
Surveys
In addition to interviews, the study involved a literature review
and surveys taken from hospitals and health insurers.
Eight health insurance firms participated in this survey (including
the four largest health insurers in the Netherlands), 47 general
hospitals and 8 UMCs.
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References
Introduction
References
1
Context
2
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3
Figures
4
Findings
5
Conclusions
6
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dations

101. 101
Research approach
Review group
Eight professors conducted a review of this research in a private
capacity to determine whether the contents were a realistic
portrayal of the actual situation. The recommendations expressed
in this report are those of the NZa itself.
Prof. G. (Geert) Blijham
Functions (incl.)
- Professor Emeritus of Oncology, UMCU
- Professor Emeritus of Internal Medicine, UMCU
- Former President of Executive Board, UMCU
- President of Supervisory Board, Maastricht UMC
- President of Supervisory Board, Groene Hart Ziekenhuis
- Member of Supervisory Board, AVL/NKI
- Member of Health Council
Prof. A. (Ton) de Boer
Functions (incl.)
- Professor of Pharmacotherapy, Utrecht University
- Head of Department of Pharmaceutical Sciences, Utrecht
University
- President of the Academic Advisory Council Committee
Medicines (WAR-CG) by the Netherlands Health Care Institute
(ZIN)
Prof. G.R.J. (Rolf) de Groot
Functions (incl.)
- Former Professor of Health Law, VU Amsterdam
- Attorney-Partner Pels Rijcken & Droogleever Fortuijn, specialised
in pharmaceutical law
- Assistant State’s Advocate
- Former member of Health Council
Prof. P.C. (Peter) Huijgens
Functions (incl.)
- Haematologist at VUMC
- Professor Emeritus of Haematology, VU Amsterdam
- President of the Netherlands Comprehensive Cancer
Organisation (IKNL)
- Former President of the Haemato Oncology Foundation for
Adults in the Netherlands
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References
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
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dations

102. 102
Research approach
Prof. K. (Kees) Noordam
Functions (incl.)
- Paediatrician at UMC Radboud
- Professor of Paediatrics, Faculty of Medicine, Radboud
University Nijmegen
- Head of the Department of Paediatrics, UMC Radboud
- President of the Expensive and Orphan Drugs work group (NVK)
Prof. J.H.M. (Jan) Schellens
Functions (incl.)
- Specialist in internal oncology, NKI/AVL
- Head of Department of Clinical Pharmacology, AVL/NKI
- Professor of Clinical Pharmacology, Department of
Pharmacological Sciences
- Member of the Medicines Evaluation Board (CBG) since 1999
- President of the EMA Scientific Advisory Group Oncology (SAG
Oncology) since 2001
- Former President (2004-2011) of the Pharmacological Assistance
Committee of the CVZ
Prof. E. (Erik) Schokkaert
Functions (incl.)
- Professor of Economics, KU Leuven
- President of Metaforum, KU, Leuven
- Economics and Government research group, KU Leuven
Prof. G. (Gerrit) van der Wal
Functions (incl.)
- Former Inspector-General, IGZ
- Professor Emeritus of Social Medicine, VUMC
- Member of Supervisory Board, UMCU
- Member of Supervisory Board, Groene Hart Ziekenhuis
- Vice-President of Supervisory Board, Zorggroep Almere
- President of Steering Committee, Suitable Care
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References
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

103. 103
NEXTBACK
Appendices
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

104. 104
NEXTBACK
SMC Pharmaceutical Group NZA performance code Transfer
Aafact Coagulation factors 191801 No
Aafact Coagulation factors 191802 No
Aafact Coagulation factors 191803 No
Advate Coagulation factors 191804 No
Advate Coagulation factors 191805 No
Advate Coagulation factors 191806 No
Advate Coagulation factors 191807 No
Advate Coagulation factors 191808 No
Advate Coagulation factors 191809 No
Benefix Coagulation factors 191810 No
Benefix Coagulation factors 191811 No
Benefix Coagulation factors 191812 No
Benefix Coagulation factors 191813 No
Ceprotin Coagulation factors 191814 No
Ceprotin Coagulation factors 191815 No
Factor VII Coagulation factors 191817 No
Factor VII Coagulation factors 191818 No
Factor X Coagulation factors 191819 No
Feiba S-TIM 4 Coagulation factors 191823 No
Feiba S-TIM 5 Coagulation factors 191824 No
Fibrogammin P Coagulation factors 191825 No
Fibrogammin P Coagulation factors 191826 No
Haemate P Coagulation factors 191827 No
Haemate P Coagulation factors 191828 No
Haemate P Coagulation factors 191829 No
Haemocomplettan P Coagulation factors 191830 No
Helixate Nex Gen Coagulation factors 191831 No
Helixate Nex Gen Coagulation factors 191832 No
Helixate Nex Gen Coagulation factors 191833 No
Helixate Nex Gen Coagulation factors 191834 No
Immunine Coagulation factors 191843 No
Immunine Coagulation factors 191844 No
Kogenate Bayer Coagulation factors 191845 No
Kogenate Bayer Coagulation factors 191846 No
Kogenate Bayer Coagulation factors 191847 No
Kogenate Bayer Coagulation factors 191848 No
Kogenate Bayer Coagulation factors 191849 No
Mononine Coagulation factors 191850 No
Mononine Coagulation factors 191851 No
APPENDIX 1
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

105. 105
NEXTBACK
SMC Pharmaceutical Group NZA performance code Transfer
Nonafact Coagulation factors 191854 No
Nonafact Coagulation factors 191855 No
Novoseven Coagulation factors 191856 No
Novoseven Coagulation factors 191857 No
Novoseven Coagulation factors 191858 No
Novoseven Coagulation factors 191859 No
ReFacto AF Coagulation factors 191862 No
ReFacto AF Coagulation factors 191863 No
ReFacto AF Coagulation factors 191864 No
ReFacto AF Coagulation factors 191865 No
Wilate Coagulation factors 191866 No
Wilate Coagulation factors 191867 No
Wilfactin Coagulation factors 191868 No
Antithrombin III Coagulation factors 191869 No
Antithrombin III Coagulation factors 191870 No
Atenative Coagulation factors 191871 No
Atenative Coagulation factors 191872 No
Atenative Coagulation factors 191873 No
Beriplex P/N Coagulation factors 191874 No
Beriplex P/N Coagulation factors 191875 No
Cofact Coagulation factors 191876 No
Cofact Coagulation factors 191877 No
Hemoleven Factor XI Coagulation factors 191878 No
Nanotive, per to Coagulation factors 191879 No
Nanotive, per to Coagulation factors 191880 No
Octanate, per t Coagulation factors 191881 No
Octanate, per t Coagulation factors 191882 No
Octanate, per t Coagulation factors 191883 No
Mabthera, per t Coagulation factors 191890 No
Mabthera, per t Coagulation factors 191891 No
Wilate, per toe Coagulation factors 191892 No
Wilate, per toe Coagulation factors 191893 No
Benefix, per to Coagulation factors 191894 No
Docetaxel Oncolytics 193301 No
Docetaxel Oncolytics 193302 No
Irinotecan Oncolytics 193303 No
Gemcitabin Oncolytics 193304 No
Gemcitabin Oncolytics 193305 No
Oxaliplatin Oncolytics 193306 No
Oxaliplatin Oncolytics 193307 No
Paclitaxel Oncolytics 193308 No
Infliximab TNF alpha inhibitor (anti-arthritic) 193309 As of 2012
Immunoglobulin Immunoglobulin 193310 No
Immunoglobulin Immunoglobulin 193311 No
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

106. 106
NEXTBACK
SMC Pharmaceutical Group NZA performance code Transfer
Immunoglobulin Immunoglobulin 193312 No
Trastuzumab Oncolytics 193313 No
Botuline toxin Botuline toxin 193314 No
Botuline toxin Botuline toxin 193315 No
Botuline toxin Botuline toxin 193316 No
Botuline toxin Botuline toxin 193317 No
Verteporfin Macular degeneration 193318 No
Doxorubicin liposomal Oncolytics 193319 No
Vinorelbin Oncolytics 193320 No
Bevacizumab Oncolytics 193321 No
Pemetrexed Oncolytics 193322 No
Bortezomib Oncolytics 193323 No
Omalizumab Asthma 193324 No
Omalizumab Asthma 193325 No
Ibritumomab Tiuxetan Oncolytics 193326 No
Pegaptanib Macular degeneration 193327 No
Palifermin Other 193329 No
Rituximab Oncolytics 193330 No
Natalizumab MS drugs 193332 No
Cetuximab Oncolytics 193333 No
Ranibizumab Macular degeneration 193334 No
Abatacept TNF alpha inhibitor (anti-arthritic) 193335 As of 2012
Voriconazol Antifungals 193336 No
Voriconazol Antifungals 193337 No
Voriconazol Antifungals 193338 No
Methyl aminolevulinate Other 193339 No
Panitumumab Oncolytics 193340 No
Anidulafungin Antifungals 193341 No
Caspofungin Antifungals 193342 No
Temsirolimus Oncolytics 193343 No
Temoporfin Oncolytics 193344 No
Azacitidine Oncolytics 193345 No
Tocilizumab Other anti-arthritics 193346 No
Adalimumab TNF alpha inhibitor (anti-arthritic) 193347 As of 2012
Certolizumab pegol TNF alpha inhibitor (anti-arthritic) 193348 As of 2012
Etanercept TNF alpha inhibitor (anti-arthritic) 193349 As of 2012
Etanercept TNF alpha inhibitor (anti-arthritic) 193350 As of 2012
Golimumab TNF alpha inhibitor (anti-arthritic) 193351 As of 2012
Amfotericin B liposomal Antifungals 193352 No
Amfotericin B liposomal Antifungals 193353 No
Anakinra Other anti-arthritics 193354 As of 2012
Ustekinumab Other anti-arthritics 193355 As of 2012
Cabazitaxel Oncolytics 193356 No
Ipilimumab Oncolytics 193357 No
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

107. 107
NEXTBACK
SMC Pharmaceutical Group NZA performance code Transfer
Eribuline Oncolytics 193360 No
Collagenase clostridium histolyticum Other 193361 No
Belimumab Other anti-arthritics 193362 No
Bendamustin Oncolytics 193363 No
Paclitaxel albumin bound Oncolytics 193364 No
Micafungin Antimycotics 193365 No
Crisantaspase Oncolytics 193367 No
Catumaxomab Oncolytics 193368 No
Amfotericin B in lipid complex Antimycotics 193369 No
Vemurafenib Oncolytics 193370 No
Abirateron acetate Oncolytics 193371 As of 2013
Bexarotine Oncolytics 193372 As of 2013
Lapatinib Oncolytics 193376 As of 2013
Sorafenib Oncolytics 193378 As of 2013
Laronidase Metabolic disease medication 193380 No
Alglucosidase alfa Metabolic disease medication 193381 No
Agalsidase alfa Metabolic disease medication 193382 No
Agalsidase beta Metabolic disease medication 193383 No
Galsulfase Metabolic disease medication 193384 No
Indursulfase Metabolic disease medication 193385 No
Clofarabin Oncolytics 193386 No
Eculizumab Other 193387 No
Trabectedin Oncolytics 193388 No
Canakinumab Other 193389 No
Mifamurtide Oncolytics 193390 No
Ofatumumab Oncolytics 193391 No
Ivacaftor Other 193392 No
Decitabine Oncolytics 193393 No
Brentuximab Vedotin Oncolytics 193394 No
Pertuzumab Oncolytics 193395 No
Pazopanib Oncolytics 193430 As of 2013
Gefitinib Oncolytics 193432 As of 2013
Mecasermin Growth hormones 193435 As of 2013
Mitotane Oncolytics 193436 As of 2013
Chondrocelect Other 193438 No
Axitinib Oncolytics 193439 No
Abatacept TNF alpha inhibitor (anti-arthritic) 193440 As of 2012
Crizotinib Oncolytics 193441 No
Trabectedin Oncolytics 193449 No
Vandetanib Oncolytics 194400 No
Vandetanib Oncolytics 194401 No
Imatinib Oncolytics 194402 As of 2013
Imatinib Oncolytics 194403 As of 2013
Sunitinib Oncolytics 194404 As of 2013
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

108. 108
NEXTBACK
SMC Pharmaceutical Group NZA performance code Transfer
Sunitinib Oncolytics 194405 As of 2013
Sunitinib Oncolytics 194406 As of 2013
Somatropin Growth hormones 194407 As of 2013
Somatropin Growth hormones 194408 As of 2013
Somatropin Growth hormones 194409 As of 2013
Somatropin Growth hormones 194410 As of 2013
Somatropin Growth hormones 194411 As of 2013
Somatropin Growth hormones 194412 As of 2013
Somatropin Growth hormones 194413 As of 2013
Somatropin Growth hormones 194414 As of 2013
Somatropin Growth hormones 194415 As of 2013
Dasatinib Oncolytics 194416 As of 2013
Dasatinib Oncolytics 194417 As of 2013
Dasatinib Oncolytics 194418 As of 2013
Dasatinib Oncolytics 194419 As of 2013
Dasatinib Oncolytics 194420 As of 2013
Everolimus Oncolytics 194421 As of 2013
Everolimus Oncolytics 194422 As of 2013
Everolimus Oncolytics 194423 As of 2013
Erlotinib Oncolytics 194424 As of 2013
Erlotinib Oncolytics 194425 As of 2013
Erlotinib Oncolytics 194426 As of 2013
Nilotinib Oncolytics 194427 As of 2013
Nilotinib Oncolytics 194428 As of 2013
Lenalidomide Oncolytics 194600 As of 2013
Lenalidomide Oncolytics 194601 As of 2013
Lenalidomide Oncolytics 194602 As of 2013
Lenalidomide Oncolytics 194603 As of 2013
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

109. 109
Australia
In Australia, the government sets the sale prices for medicines
using a variety of methods:
- ‘Cost plus’
The manufacturer must submit an itemised statement of
its expenses for both research and development and for
production and distribution. The government then adds an
amount to this cost price. The ‘surcharge’ varies, but in general
30% of the cost price is considered to be reasonable. The
government usually applies this ‘cost plus’ method to medicines
for which there is no reference price (usually new medicines) or
for medicines intended for specific groups of patients.
- Reference prices
If there is an alternative to a specific medicine (comparable
medicines), then the government uses the alternative with the
lowest price as a benchmark. It then sets the price for the new
drug based on whether it has greater or lesser therapeutic
value. That way, the government weights medicines within a
comparable group.
- New dosages
If an existing drug is released to market with new packaging or
dosages, then the price is adjusted accordingly. For example, if
a 20 mg tablet is replaced by a 10 mg tablet, the price may be
adjusted to 60-70% of the original price.
In the Australian system, the comparative value of the medicines
is an important element. Moreover, the ‘cost plus’ model forces
manufacturers to provide openness with regard to the costs of
development and production. The negotiations between the
manufacturer and the Ministry deal with storage as well. Such an
approach requires considerable effort, and may involve additional
implementation costs when the number of medicines rapidly
increases. The main advantage to the system is that the costs
become transparent and an explicit decision is made regarding
reasonable compensation.
Source: Pharmaceutical Benefits Scheme. Zie: http://www.pbs.gov.au/info/industry/pricing/pbs-
items/fact-sheet-setting-an-approved-ex-manufacturer-price (11 juni 2015)
NEXTBACK
APPENDIX 2
Setting prices
In Australia, the Pricing Section of the Department of Health
(DoH) is responsible for setting the retail prices for medicines.
This department of the Ministry advises the minister on retail
prices after taking the following factors into consideration:
• The recommendations of the Pharmaceutical Benefits Advisory
Committee (PBAC ) regarding the drug’s clinical effectiveness.
• Prices for alternative medicines or comparable products by
other manufacturers.
• Prices for products in the same anatomical therapeutic chemical
groups (ATC groups).
• Information about the cost price.
• Volume estimates, economies of scale and special technical
requirements (such as storage and administration).
• Prices in other countries (including prices of medication with
comparable components).
• The minister’s instructions.
• Information provided by the manufacturer.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations

110. 110
Norway
The health care sector in Norway is based on a national health
insurance system that is financed from tax income. The responsibility
for implementing that insurance lies with the national government,
the municipalities and four health authorities – the so-called
‘regional helseforetakt’ (RHF).
The municipalities are responsible for first-line care, the national
government is responsible for hospital care (management and
financing), and the four regional authorities are responsible for
specialist services. All hospitals are owned by the public.
In Norway, as in the Netherlands, pharmaceutical care is based
on a divided system. Outpatient pharmacology is compensated
by the government or an insurance policy, and patients must pay
a premium up to a maximum limit. Other rules apply to inpatient
medicines: they are provided as part of the hospital care and are
compensated via hospital budgets. The patient is not required to pay
for the extra costs of inpatient care.
There are different price regulation models for both types of
medicines. This report only deals with the model for inpatient
medicines.
The government purchases inpatient medicines at the national
level via a separate agency: the Legemiddelinnk- jøpssamarbeid
(LIS) (‘Medicine purchasing cooperative’). The LIS uses a contract
tender model. Prices for inpatient medicines are lower than those in
outpatient care. There is no national list or form; each hospital can
draw up its own list. Most hospitals have their own therapeutic or
pharmaceutical committee to draw up these lists.
The decisions on which resources to use are generally made as
follows: Up to a certain macro limit, the Norwegian Medicines
Authority (NoMA) can decide on prices as well as the compensation
that can be billed to the insurer. If the budget overrun is expected to
exceed this limit, then the Minister of Health must decide. In 2011,
the macro limit was € 0.64 million for the fifth year after admission.
NoMA may also request advice from a National Pharmaceutical
Compensation Advisory Committee. The Minister has another
advisory body available: the National Council for Prioritising Health
Care. The latter examines whether the resources expended are
justified in comparison with other health care expenses. So far, the
National Council for Prioritising Health Care has only rarely been
called to act. If the Minister wishes to make a decision regarding
compensation, then he/she requires the approval of Parliament and
the attendant budgetary approval.1
Source: PHIS Pharma profile, Norwegian Medicines Agency (Festoy and Yu), (june 2011),
See: http://www.legemiddelverket.no/English/the-norwegian-health-care-system-and-
pharmaceutical-system/Sider/default.aspx (consulted on 10 June 2015)
1 The report referred to above notes that this sorting mechanism does not work in practice: to
date, the Parliament has always approved any positive compensation decisions.
BACK
Characteristics of the Norwegian procedure
The procedure has a few important characteristics:
- It examines the budget burden in the medium term.
- It explicitly requires a balance with other health care expenses.
- A political decision must be made regarding the budget.
This also pertains to the fact that the government directly
compensates the hospitals.
- It makes a direct link between the budget decisions and
package decisions, in which a decision must be made
regarding the distribution of resources.
Introduction
References
1
Context
2
Supply chain
3
Figures
4
Findings
5
Conclusions
6
Recommen-
dations