The role of Pharmacoeconomics in Healthcare Decision Making in the EU

1
The role of Pharmacoeconomics in Healthcare
Decision Making in the EU

• Jens Grueger, PhD
• Global Head, Pricing Market AccessNovartis
  Pharma AG
• Moscow, December 18, 2006

2
Overview

• Clarification of terms
• Levels of decision making in the EU
• Political context of health care decision making
• Criteria for decision making
• The contribution of pharmacoeconomics to decision
  making
• The industry perspective on the use of
  pharmacoeconomics in decision making

3
Clarification of terms

• Pharmacoeconomics
• Application of economic methods to the evaluation
  of phamaceuticals
• Health economics
• Application of economic methods to the evaluation
  of technologies in health care
• Healthcare economics
• Application of economic methods to the evaluation
  of health care systems

• Health technology assessment
• Systematic, transparent review of the medical,
  social, economic and ethical issues related to
  the use of a health technology to inform the
  formulation of safe, effective, value based
  health policies.

4
Political context of health care decision making

• Achieving healthcare objectives, e.g. reducing
  cardiovascular mortality by x by the year 2010
• Equity of access, e.g. reducing postcode
  prescribing
• Sustainable financing, e.g. stable percentage of
  healthcare in GNP
• Industrial policy, e.g. providing a positive
  climate for clinical research and development

5
Levels of decision making in the EU

• Supranational (EU level), e.g. EMEA
• National (country level), e.g. NICE, IQWiG
• Regional, e.g. Provinces in Spain
• Local, e.g. Primary Care Trusts in the UK,
  Hospital trusts
• Individual, physician patient interaction

6
Three decisions to Market Access
Regulatory Approval
Pricing Reimbursement
FormularyListing

• Efficacy
• Safety
• Quality

• Unmet medical economic need
• Relative effectiveness
• Cost-effectiveness
• Budget Impact

• Budget Impact
• Local treatment guidelines
• Additional services

7
Criteria for decision making in the EU
8
Role of pharmacoeconomics and HTA
Regulatory Approval
Pricing Reimbursement
FormularyListing

• Economic Evaluation

• Budget Impact Analysis

• Health Technology Assessment

9
The contribution of HTA

• Multidisciplinary process that summarizes
  information about the medical, social, economic
  and ethical issues related to the use of a health
  technology in a systematic, transparent,
  unbiased, robust manner. Its aim is to inform the
  formulation of safe, effective, health policies
  that are patient focused and seek to achieve best
  value.
• HTA is evidence based, often focusing on hard
  evidence
• Randomized controlled clinical trials
• Against the standard of care
• Over sufficient duration to observe final
  outcomes (morbidity and mortality)
• In the appropriate patient population and
  treatment setting

10
The process for Health Technology Assessment
Selection of Technologies
Appraisal
Assessment

• Scope, criteria and timelines for technologies to
  be evaluated

• Unmet medical need
• Relative clinical effectiveness
• Cost effectiveness
• Budget impact

• Decision rules
• Stakeholder involvement
• Appeals and arbitration process
• Funding and implementation

11
Health Technology Assessment EFPIA criteria

• Based on a clear, sophisticated and
  differentiated view of what constitutes value
• Transparent and balanced
• Based on early and inclusive dialogue, including
  with patients
• Allow new data to be considered
• Flexibility is required in handling uncertainty
• Comprehensive understanding of the benefits of a
  drug in disease management is needed
• Payers should commit to rewarding added value
• Decisions of HTA should be implemented
• HTA should apply to all healthcare interventions
• Appraisal should take place at the national level
• Remain separate from regulatory review
• Evaluations should take into account indirect
  benefits

12
How to support pharmacoeconomics during
pharmaceutical development

• Comparator
• Endpoint
• Duration
• Patient segment
• Link to clinical trial data
• Extrapolation beyond trial duration, to other
  patient populations and treatment settings
• Resource utilization
• Preferences (utilities for disease states)
• Technical sophistication (robust, sensitive)
• Model transparency (link risks to outcomes,
  evidence base for risk equations)
• Local relevance (epidemiology, treatment
  pathways)

Clinical trial needs to support product position
Economic Models
Right Balance
13
Tools to ensure successful market access from a
manufacturer perspective

• Robust process to understand payer evidence
  requirements at an early development stage
  (Optimizing Brand Value)
• Frequent interaction with payers through e.g.
  advisory boards
• Cross functional alignment throughout product
  development (Value Demonstration Teams)
• Clear documentation and communication of clinical
  and economic value messages (Submission Dossiers)
• Transparency, scientific integrity and respect

14
Novartis Position

• We are committed to developing innovative
  medicines with clear benefits for patients, their
  caregivers and societies
• We expect a predictable financial environment,
  which rewards innovation
• We request protection of our intellectual
  property
• We encourage a competitive market for high
  quality generics
• Companies should be free to set prices for
  innovative medicines.
• Technology assessment is an effective tool to
  identify incremental clinical benefits and costs
• We will provide high quality clinical and
  economic data to document the added value of our
  products
• Payers should only regulate prices for medicines
  for which they pay