“Challenge of the Cure” discussion continues in Munich: P&MA in disruptive therapies

“Challenge of the Cure” discussion continues in Munich: P&MA in disruptive therapies

Life Sciences | Life Sciences Strategy

How will HTAs cope with clinical uncertainty, risk, and affordability—while still ensuring innovation?

During our Munich-based discussion, we continued to probe for insights regarding how health technology assessment (HTA) processes will handle ongoing clinical uncertainties, while managing risk and affordability, and still maintain an environment that encourages innovation. 

Overall, our panelists concluded:

Most HTA processes currently account for clinical uncertainty and are equipped to continue to do so, with some adjustments, when facing the challenges posed by new technologies. Likewise, from a risk and affordability perspective, adjustments will be needed, but HTAs are prepared to deal with these matters through some proposed innovation of their own. As for ensuring pharmaceutical industry innovation, this is a larger topic that can be encouraged at the HTA level but should be addressed in a broader way. The following thoughts from HTA specialists provide more details from the Munich dinner discussion.

Our distinguished panelists included: 

  • Dr. Paul S.J. Miller, a UK-based professional health economist with more than 20 years of experience in the pharmaceutical industry, National Health Service, and academia; 
  • Dr. Matthias Flume of Germany, Head of Drug Department at the Association of Statutory Health Insurance Physicians (KVWL); and
  • Dr. Fabrizio Gianfrate, Professor Health Economics at the University of Rome who consults to the health care sector on pricing market access and regulatory issues in the health care sector. 

How should HTAs cope with clinical uncertainty?

UK: HTAs, especially those in the UK, value information analysis and are open to additional new metrics that help inform the decision process. To be helpful, uncertainty at different levels needs to be quantified explicitly in order to mitigate it through appropriate measures. In the end, based on the quantification of the uncertainty, it should be possible to estimate how much value more information could add.

Italy: Decisions always include a certain level of uncertainty. Measures to manage the impact of decisions taken based on limited clinical data may include temporary approval, such as a re-evaluation every two years. Another measure may be an outcome-based prescription that would help manage the budget impact of certain medications. In Italy, registries are also used to make sure that real world data is collected. Registries may be used to reduce the level of uncertainty over time and to evaluate whether the benefit/risk profile achieved in the trials can be seen in the real world.

Germany: Clinical uncertainty and uncertainty overall is not new and the German HTA system is built to manage uncertainty in decision making. As no benefit is seen in a new mode of action, the current system is expected to work well with upcoming new therapies. (Note that new therapies are reimbursed from day one to ensure access.) In addition to increasing spending on pharmaceuticals, an innovation fund, which is separate from the standard payer budget, seems necessary to support innovative therapeutic approaches that have the potential to drive down overall healthcare spending—not only spending on pharmaceuticals.

How should HTAs manage the risk?

UK: The quality-adjusted life-year (QUALY) is a good tool. Perhaps the more challenging part is survival, as that is harder to gauge based on a relatively short trial.

Italy: Drugs could be reassessed every 18 to 24 months. In the future, even a split payment depending on the evaluation is an option. A mortgage model could be employed.

Germany: Drugs are reassessed, and the reassessment can go both ways, for example, a higher price can be set after a reassessment. Distributing payment is a less preferred option, since an upfront payment is easier to implement. In this case, the upfront payment must incorporate the uncertainty, essentially it must be lower to account for the expected share of non-responders.

How should HTAs ensure affordability?

UK: If manufacturers’ market-access decisions depend on inclusion of a financial arrangement as part of the business case, then they must make sure the offered package is better than a straight discount and be ready to explain why the managed-entry agreement has benefits for the payers. There also could be a solution where a third party manages the financial aspect, like a bank manages the loan when a car or house is bought.

Italy: Affordability is a complex problem and, as such, requires a complex solution. In principle, registries allow for payment models, such as “payment by result” or even “different prices by indication.” There was also a recent idea proposed by the new Italian government where medicines could be paid using state bonds.

Germany: Health economics are a way to value a drug but not to price it. In current ongoing discussions, medical decision-making and financial instruments are combined, but the reason is not obvious. Leasing, for example, is a financial tool used to manage revenue flows. Whatever business case manufacturers offer needs to lead to a mutually beneficial situation for both payer and payee. Innovative contracting, such as including a gated decision process, may be another measure.

If, hypothetically, manufacturers would disclose actual costs for gene therapies, it is likely the German system would pay; disclosing the cost of goods, however, would put current business models at risk. It also could be a disadvantage for manufacturers to bind themselves to a price or payment scheme for 10 years, for example. Something like leasing is harder to implement for a gene therapy once provided as it cannot be returned. Patients who switch between sick funds also increase complexity.

How should HTAs ensure future innovation?

UK: This is a good discussion and it should really happen on a higher level than the product level, so it is definitely not an argument for price negotiations. In general, though, the rules are clear (£20,000 to £30,000 per one QUALY) on how innovation that leads to actual benefit is rewarded.

Italy: There might be need for a readjustment since the process is currently the same regardless of whether a drug is a real innovation or just a “me too” development. It must be recognized, however, that in Italy there are special funds reserved for innovative drugs.

Germany: In order to be flexible to finance innovation, there should be a stronger focus on the interchangeability of biosimilars. A higher application of biosimilars would help in shifting funds to innovations like gene and cell therapies.

The takeaway?

While uncertainty is, and will continue to be, a certainty—the challenges of risk and affordability may be areas where HTAs can find viable solutions that will benefit both the payer and payee sides in these highly complicated matters. As for encouraging innovation, while HTAs play a role, much broader discussions/answers will be needed.