HTA and Price Control for Pharmaceuticals in Germany J.-Matthias Graf von der Schulenburg Leibniz Universität Hannover CHERH – Center for Health Economics Research Hannover 24th October 2013
© CHERH 2012 © CHERH
1
Agenda
1. Principles of Reimbursement 2. 3. 4.
and Pricing Measurement of Value of Medical Technologies Dilemma between Supporting Innovation and Cost Control Pros and Cons of QALY
© CHERH 2012 © CHERH
2
2
© CHERH 2012 © CHERH
3
3
© CHERH 2012 © CHERH
4
4
Agenda
1. Principles of Reimbursement 2. 3. 4.
and Pricing Measurement of Value of Medical Technologies Dilemma between Supporting Innovation and Cost Control Pros and Cons of QALY
© CHERH 2012 © CHERH
5
5
The German pharmaceutical market is the 4th largest worldwide $322
Turnover 2011 in Billion US-Dollar, TOP 10
$112 $67
$45
$41
$28
$28
$23
$22
$22
Source: BPI (2012), based on IMS World Review 2012 © CHERH 2012 © CHERH
6
6
Germany accounts for 23% of the European pharmaceutical market Turnover 2011 in %, EU-15
Germany 23%
EU-15 without Germany 77%
Source: BPI (2012), based on IMS World Review 2012 © CHERH 2012 © CHERH
7
7
The German health insurers have different instruments of pharmaceutical budget impact control New patented products
• Price negotiated with payers (GKV-SV) based on early benefit assessment (AMNOG)
„Old“ patented products*
• Price set by pharmaceutical company • Price freeze and mandatory discounts • Price negotiated with payers by individual contracts (optional)
Generic products (and some „old“ patented)
OTC products
• Reference pricing • Price freeze and mandatory discounts • Price set by pharmaceutical company • No reimbursement by SHI (beside exeption list) * launched before 2011; Source: Ecker & Ecker GmbH 2012
© CHERH 2012 © CHERH
8
8
Total Pharmaceutical per Capita 2011 (US dollars) 1000 900 800 700 600 500 400 300 200 100 0
Source: OECDiLibrary 2013 © CHERH 2012 © CHERH
9
9
Agenda
1. General Principles of 2. 3. 4.
Reimbursement and Pricing Measurement of Value of Medical Technologies Dilemma between Supporting Innovation and Cost Control Pros and Cons of QALY
© CHERH 2012 © CHERH
10
10
Pluralism in European Health Systems
Beveridge oriented Nordic Countries Sweden
Finland
Beveridge oriented Bismarck oriented
United Kingdom
Bismarck oriented Mediterranean Countries Denmark
Beveridge oriented Baltic Countries
Ireland The Netherlands Germany Belgium
Beveridge oriented Central/Eastern Countries
Luxembourg
Bismarck oriented S/E Mediterranean Countries Austria
France
Bismarck oriented Central/Eastern Countries
Italy Portugal
Spain
© CHERH 2012 © CHERH
Greece
11
11
Two broad approaches British / Dutch / Swedish / Irish ICER = incremental cost per QALY Economic evaluation upfront Price negotiations, optional
French / German Added clinical benefit vs. comparator (not competitor) Assessment after launch Price negotiations or reference pricing
© CHERH 2012 © CHERH
12
12
Similarities
Benefits shown in clinical trials are key Both approaches work in practice Separation of assessment and appraisal Value dossiers have to be provided by pharmaceutical company Crucial is choice of comparator
© CHERH 2012 © CHERH
13
13
UK vs. Germany - Institutional role in decision making UK
Germany
1999
2011
before launch
after launch or on request
parallel
sequential
Role of price
taken as set by manufacturer
assessment feeds into price negotiations
Risk-Sharing
yes
no
transparent
not transparent
explicit
implicit
higher ICER accepted
exempted
Since… Time of Assessment Benefit assessment vs. Benefit evaluation
Pricing process Rationing Orphan drugs
© CHERH 2012 © CHERH
14
14
UK vs. Germany - Process Medical benefit
Handling uncertainty
UK
Germany
Choice of Comparator
pragmatic
rather burocratic
Subgroups
less important
important
Surrogates
accepted
not accepted
Outcomes
aggregated
disaggregated
indirect comparisons
accepted but seen skeptical
accepted
not accepted
comprehensive
„on the back of a coaster“
gold standard
seen skeptical
standard
in principle no
Modelling
Costs Benefit valuation
QALYs Economic evaluation
© CHERH 2012 © CHERH
15
15
AMNOG - Evaluation process of new pharmaceutical
© CHERH 2012 © CHERH
16
16
Benefit assessment ratings 1 2 3 4 5 6
Major additional benefit Important additional benefit Slight additional benefit Additional benefits exists, but is not quantifiable No additional benefit has been proven The benefit of the pharmaceutical to be assessed is smaller than the benefit of the comparative therapy Source: Runge 2012
For methodical details see IQWiG 4.1 (2013) © CHERH 2012 © CHERH
17
17
The 7 biggest misunderstandings of benefit assessment in Germany 1 2 3 4 5 6 7
G-BA consultation is similar to NICE Comparative therapy follows EMA G-BA set prices There is free pricing for the first 12 months Additional benefit is proven by the regulatory authorities German benefit dossier can be based on global value dossier Orphan drugs are exempted from benefit assessment Source: Ecker & Ecker GmbH 2012
© CHERH 2012 © CHERH
18
18
Appropriate Comparative Treatments
Source: Ruof et al. 2012
© CHERH 2012 © CHERH
19
19
Agenda
1. General Principles of 2. 3. 4.
Reimbursement and Pricing Measurement of Value of Medical Technologies Dilemma between Supporting Innovation and Cost Control Pros and Cons of QALY
© CHERH 2012 © CHERH
20
20
© CHERH 2012 © CHERH
21
21
Agenda
1. General Principles of 2. 3. 4.
Reimbursement and Pricing Measurement of Value of Medical Technologies Dilemma between Supporting Innovation and Cost Control Pros and Cons of QALY
© CHERH 2012 © CHERH
Are we actually moving in a circle, Olaf?
22
22
QALY Debate in Germany
© CHERH 2012 © CHERH
23
23
Input-Output Measurement in Health Care
© CHERH 2012 © CHERH
24
24
Cost Assessment Societal perspective
Payer‘s perspective*
General threshold given
Australia, Canada
NICE, New Zealand, SMC
General threshold not given
Finland, Netherlands
Germany
*with or without out of pocket payments of patients
© CHERH 2012 © CHERH
25
25
Benefit Assessment Inter indication comparison
Intra indication comparison
Multidimensional benefit scale
e.g. QALY concept (NICE, LFN)
summarizing scores
Onedimensional benefit scale
Cost-effectiveness analysis
IQWiG current approach
© CHERH 2012 © CHERH
26
26
ECHOUTCOME-QALY* Ariel Beresniak: "Important decisions are being made on the basis of QALY, but it produces the wrong results…This isn't a scientific way to classify and prioritise the drugs - mathematically, it's flawed… Important decisions are being made on the basis of QALY, but it produces the wrong results… This isn't a scientific way to classify and prioritise the drugs mathematically, it's flawed.” "We think it is time to open this debate, particularly as some of the newer European countries are trying to organise their health assessment systems and might be considering QALY.” "Agencies such as NICE should abandon QALY in favour of other approaches.” *European Consortium in Healtcare Outcomes and Cost-Benefit Dr. Ariel BERESNIAK : Project leader (Data Mining International) © CHERH 2012 © CHERH
27
27
Where shall we go? Madrid: 4 days x 23º C = 92 Paris: 5 days x 16º C = 80 F = C x 1.8 + 32
Madrid: 4 days x 73.4º F = 293,6 Paris: 5 days x 60.8º F = 304 Madrid is better, if temperature is measured in C. Paris is better, if temperature is measured in F.
© CHERH 2012 © CHERH
28
28
Benefit assessment needs three value judgments: Individual aggregation decision Every patient counts the same Cardinal measurement of benefit
Intertemporal aggregation decision Discounting
Multidimensional aggregation decision QALY concept, Summation Score
© CHERH 2012 © CHERH
29
29
Is RCT so different from the QALY concept? Value Judgment
RCT
QALY
All patients count the same
X
X
Time consistency
˃ 1 year , z = 0
z≥0
Aggregation of different benefit dimensions
Lexicographical order
X
Transitivity and cardinal measurement
X
X
Quantity and quality
Proxy
X
Risk neutrality is assumed
X
X
Death is the worst status
X
(X), negative QoL possible
© CHERH 2012 © CHERH
30
30
Ten reasons against using the QALY concept 1. QALY concept is against the German Constitution 2. Gain of life time is so important that it should not be mixed with other measures, like QoL 3. QoL-instruments lead in different settings to different results, i.e. Standard Gamble and Time Trade Off lead to different results 4. International experts recommend not to use the QALY (Australian Pharmaceutical Benefits Advisory Committee (PBAC)) 5. Only patients can judge about the QoL-effects, not healthy people Source: Klaus Koch, Andreas Gerber, QALYs in der Kosten-Nutzen-Bewertung, in: BARMER GEK Gesundheitswesen aktuell 2010 Beiträge und Analysen, ed. By Uwe Repschläger, Claudia Schulte und Nicole Osterkamp, pp 32-49
© CHERH 2012 © CHERH
31
31
Ten reasons against using the QALY concept 6. QALY concept assumes that people behave rational, patients don‘t 7. QALY concept leads to discrimination 8. Thresholds are not scientifically derived 9. Distributional aspects are denied by the QALY concept 10. QALY is a mathematical formula which can not solve ethical challenges
Source: Klaus Koch, Andreas Gerber, QALYs in der Kosten-Nutzen-Bewertung, in: BARMER GEK Gesundheitswesen aktuell 2010 Beiträge und Analysen, ed. By Uwe Repschläger, Claudia Schulte und Nicole Osterkamp, pp 32-49
© CHERH 2012 © CHERH
32
32
Thank you very much for your attention!
© CHERH 2012 © CHERH
33
33