CRA Insights

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

September 6, 2018

Will new gene therapies overtax healthcare systems?
At our recent discussion in London, we focused on the ability for health technology assessment (HTA) processes to cope with current outcome uncertainties and the ability of healthcare systems to absorb the costs that will be associated with a wave of new gene therapies.
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. Guiseppe Rosano of Italy, a Member of the Cardiovascular Working Party at the European Medicines Agency and Member of the European Assessment Board at the Italian Drug Agency (AIFA).

In general our panelists agreed that most HTA processes are thought to be sufficiently robust to withstand gene therapy assessments because payers already deal with some degree of uncertainty around clinical efficacy, long term safety and surrogate outcomes. While gene therapies bring a higher level of uncertainty than traditional drugs, that risk is often mitigated, albeit in the short-term, by their launch in rare diseases. Therefore, one issue for payers will be the capacity of the system to deal over the longer term—from both a value assessment and a budget perspective—with the new wave of gene therapies.
We asked our payer panelists to provide details of their particular country’s situation in response to three specific questions.
What is the ability for HTAs to cope with uncertainty today?
UK: Lessons from the Cancer Fund show that allocating resources where there is no long-term proof of benefit can be challenging. To quantify uncertainties, new metrics appear to be needed (York study); and the impact of making the wrong decision should be better described, either by quantifying wasted spending or the quality-adjusted life-year (QALY). The patient population size also has a big impact, as a cure can be cost-effective on a small population, but unlikely on a larger one.
One of the ways payers deal with uncertainty today is through negotiating on price; UK payers are not averse to also playing with innovative contracting, such as gated/conditional contracts.
Germany: The German healthcare system is prepared to deal with the influx of new curative therapies and it can pay for them. The system has already demonstrated its ability to cope by funding Sovaldi and Glybera. Payers are willing to accept some uncertainty, for example Spinraza for spinal muscular atrophy (SMA) and its limited clinical evidence, but prefer to avoid complex new contracting.
For German payers, the main issue is unlikely to be HTA (benefit assessment) but, rather annual treatment cost.
Italy: Italian payers focus on efficacy and budget impact rather than mechanism of action, with patient age and public health priorities also influencing decisions. Unlike in the UK, the importance of a limited population size is less relevant, especially when payers know that future indication extensions outside the orphan niche are considered.
To manage the clinical uncertainty, the validation of biomarkers is key. For example, Hepatitis C virus (HCV) was handled differently in Italy than in France and Germany because Italian payers believed the biomarker, being viral load, had not been validated as a predictor of mortality.
Price and costs are generally less important than budget impact. Funding is unlikely to be an issue, as increases are generally absorbed and the budget is never respected. Authorities never pay the list price and the net price is generally two or three times lower. Italy is also an important benchmark in Europe and Agenzia del Farmaco (AIFA) uses it as leverage.
What will be the ability for healthcare systems to cope with the new wave of gene therapies in the future?
Italy: This new wave, with large numbers of gene therapies, is unlikely to occur for another 10 years. By then, artificial intelligence (AI) is expected to have made headway into diagnosis and treatment, and current prices will have dropped as gene therapies become more widely used.
Previously, cost savings from generics paid for biologics, and although some savings from biosimilars are expected, they are unlikely to cover the cost of gene therapies. However, there is additional room to optimize budgets. For example, with 70% of cancer drugs leading to limited outcomes or a decrease in quality of life, and 80% of the cost of cancer occurring in the last few weeks of life, cost-savings are possible; some pockets of money are still available within the current budget.
Another possibility to make some budget available is to increase the proportion of pharmaceutical spending within the wider healthcare budget—it is currently only 12%. There is also the option of increasing the percentage of gross domestic product (GDP) designated to healthcare to cope with the potential budget impact of gene therapies.
All of these solutions for funding gene therapy rely on the Italian system’s ability to provide a ‘fair’ price for efficacy and select the ‘best’ patients for treatment. Affordability is not thought to become an issue if expenditure on ineffective drugs can be limited.
Germany: The German system will be able to cope in the future; it is very unlikely that changes will be needed because there are also cost-saving opportunities within the system today. Examples of strategies to free up the budget include mandatory biosimilar substitution or funding from alternative sources.
UK: Similarly, in the UK, there are more opportunities to find the budget to support value. Competitive pressures within gene therapy players will also help contain costs, even if this takes some time to realize. Yet, bridging the gap between the time when the saving is realized (benefit) and when the treatment is paid for (cost) is critical.
What’s the bottom line?
The consensus is that HTA systems are likely to cope in the future. Despite the high number of gene and stem-cell therapies in development, there is also a high attrition rate. As a result, the successful ones will need convincing proof of evidence. Opportunities for cost-savings can be identified in most healthcare systems and payment methods that will alleviate immediate burdens on these systems are possible. Therefore, payers are not overly concerned about gene therapy during the next decade.

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