Current Approaches in European Health Care Policy

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Current Approaches in European Health Care Policy

• What models can balance the needs of payors and
  industry?

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Three Waves of Health Economics

• The principles
• The benefits of innovation
• From price comparisons to cost-effectiveness
• The fourth hurdle
• HTA and Cost effectiveness as a requirement for
  pricing and reimbursement
• Health economics in the market place
• Accountable health economics

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The first wave establishing the principles

• Cost-containment a new important goal for health
  care systems in 1970s
• OECD international comparative data base
• Health economics not primarily about cost
  containment
• Allocation of resources for better health
• Economic evaluation a method for assessing costs
  and benefits of actions aimed at better health
• Innovation a major factor in health care

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Benefits of innovation

• Reduced health care expenditures in other
  sectors, for example hospitalisations
• Improved productivity
• Reduced indirect costs due to illness
• Improved survival
• Value of life
• Improved quality of life
• Quality-adjusted life years

5
HTA and Market AccessCost-effectiveness as a new
criteria

• HTA for medical technologies established in the
  US in the 1970s
• First European agency established in Sweden 1987
  (SBU)
• Today agencies in most countries
• Introduction of the 4th hurdle for drugs
• Australia 1992
• UK, NICE 1999
• Sweden, LFN 2002

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HTA and reimbursement (1)

• Reduce price differences between products with
  similar effectiveness
• In a dynamic market you expect price
  differentials which consumers react to
• Payers do not trust the health care providers to
  react to price differentials in a rational way
• HTA is used to provide evidence for clustering
• IQWiG as example
• Statins and insulin analouges

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HTA and reimbursement (2)

• For drugs the are true innovations, HTA will be
  used to provide information for
• Cost-effective indications at different levels of
  price at introduction
• Reimbursement will be linked to
  cost-effectiveness
• Follow-up studies for gaining additional
  information
• Verification that the right patients are treated
• Verification of benefits in clinical practice

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France The Transparency CommissionASMR
Amelioration du Service Medical Rendu

• ASMR I
• Major therapeutic advance
• ASMR II
• Important improvement in terms of efficacy and/or
  safety
• AMSR III
• Modest progress in terms of efficacy and/or
  safety
• AMSR IV
• Minor progress in terms of efficacy and/or safety
• AMSR V
• No therapeutic progress

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France Criteria for pricing and reimbursement

• ASMR I-II
• Reimbursement and free pricing
• Based on comparison with prices in other big
  five
• Answer within 15 days
• Price fixed for 5 years
• ASMR III
• Same as above if sales below 40MEuro
• AMSR IV-V
• Bargaining and reference pricing

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Germany and the Netherlands

• To be or not be clustered that is the question
• (Hamlet, Prince of Denmark)
• HTA and economic evaluation may influence the
  decision
• If clustered
• Reference price
• If not clustered
• Opportunities for premium price based on HTA and
  economic evaluation

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Evidence based re-imbursementLFN Review of
Anti-ulcer drugs in Sweden

• Reimbursement for generic omeprazole
• Generic substitution at pharmacy
• Reimbursement for Nexium (patent)
• In erosive GERD
• For HP eradication
• No reimbursement for other products unless they
  reduce price to that of generic omeprazole

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Impact of HTA and Economic Evaluation on Decision
Making Evidence from EUROMET

• EUROMET 2000
• Limited knowledge about economic evaluation
• No evidence on influence on decision making
• EUROMET 2004
• Improved knowledge about economic evaluation
• Some influence, put the potential greater than
  actual use
• Main barriers relevance and bias

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European Comparator report regarding funding and
access to oncology drugs

• Karolinska Institute (KI)/ Stockholm School of
  Economics (SSE), Stockholm Sweden
• Nils Wilking nils.wilking_at_karolinska.se
• Bengt Jönsson bengt.jonsson_at_hhs.se
• Christer Svedman MD, PhD, KI.
• Niklas Zethraeus PhD, SSE.
• Frank Lichtenberg, Columbia University, New York

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Trastuzumab uptake in selected European countries
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Trastuzumab uptake in selected European countries
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Trastuzumab uptake in selected European countries
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Trastuzumab uptake in selected European countries
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The third waveThe role of health economics in a
possible resolution

• Decisions about reimbursement are based on
  therapeutic value and cost-effectiveness
• Price controls should be abolished since price is
  declared in the reimbursement application and
  included in the cost-effectiveness study
• Resource allocation is directed towards an
  optimal use of new medicines
• Provide correct incentives for investments in RD

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The third waveConsequences

• Reimbursement will be for defined indications
• Decisions about reimbursement based on evidence
  at launch
• Follow-up studies used to reveal the true
  cost-effectiveness in different indications
• Industry and other stake holders share
  information needed to assess cost-effectiveness
• This evidence will be used as a basis for
  clinical governance

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The third waveAccountable health economics

• Benefits for industry
• Market access for new medicines
• Pricing related to therapeutic value in actual
  use
• Improved and trustful relation to its customers
• Market based incentives for innovation
• Benefits for the costumers
• Patients will get access to the best possible
  therapy within the general resource constraints
  that health care systems work within
• Drugs will take the share of health care
  expenditures that is determined by the
  cost-effectiveness of new medicines
• Third party payers private as well as public
  can show their principals that money used are
  well spent

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The third waveAccountable health economics

• Risks
• For industry
• Information will be used against the industry?
• Unproven business model
• For the costumers
• Captured by industry?
• Alternatives
• More regulation?
• Less reimbursement?

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The third wave - Summary

• Information for economic evaluations will come
  from actual use of technology
• Shared information between different stakeholders
• Payers, industry,doctors,patients
• Innovations will be used to improve the quality
  and efficiency of the health care system

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Thanks for your attention!