The health economic landscape of cancer in Europe

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1 1 Approval number

2 The health economic landscape of cancer in Europe Bengt Jönsson, Professor Emeritus of Health Economics Stockholm School of Economics 2

3 Disclaimer This presentation was developed by Professor Emeritus Bengt Jönsson for a workshop sponsored by Bristol-Myers Squibb (BMS). BMS provided support for formatting and artwork, however Professor Emeritus Bengt Jönsson is solely responsible for the content of this presentation. Any of the topics or in this presentation are not /shall not be focused on (nor biased towards) any particular treatments or products. 3

4 Luxembourg Netherlands Germany Austria Belgium Denmark France Sweden Finland Spain Portugal ( 2 ) Greece Slovenia ( 2 ) Cyrus Czech Republic Slovakia ( 2 ) Hungary Lithuania Poland Croatia Estonia Bulgaria ( 2 ) Latvia ( 3 ) Romania United States Switzerland Norway Canada ( 2 ) Australia ( 2 ) Iceland ( 2 ) Japan ( 2 ) New Zealand ( 2 ) South Korea Rationale for taking a European perspective One market but many health care systems with similar needs and great differences in health care spending 7, , , , , ,000 1, Private expenditure (PPS per inhabitant) (left-hand scale) Public expenditure (PPS per inhabitant) (left-hand scale) Current health expenditure (% of GDP) (right-hand scale) ( 1 ) Countries are ranked on total (public + private) healthcare expenditure in PPS per inhabitant. Denmark, Cyrus, Portugal, Iceland, Norway and Swirtzerland: provisional. Ireland, Italy, Malta and the United Kingdom: not available. ( 2 ) ( 3 ) Source: Eurostat (online data code: hlth_sha_hf) Reference: Accessed September

5 Annual growth in per capita health spending Increasing demands but no increase in expenditures 6% 5% 4% OECD OECD (EU) OECD (non-eu) 3% 2% 1% 0% -1% Reference: OECD, Health Statistics Available at: Accessed September

6 The changing demographics of cancer 500, , , , , , , , ,000 50, male female Number of new cancer cases by age group and gender in the EU, Notes: cancer ZICD-10 C00-97/C44. EU Z European Union. Reference: Jönsson B et al. Eur J Cancer 2016; 66:

7 Disease burden 2000 and % Cardiovascular disease 18% Cancer 11% Mental and behavioural disorders 10% Injuries 7% Musculoskeletal diseases 21% Cardiovascular disease 19% Cancer 12% Mental and behavioural disorders 9% Injuries 8% Musculoskeletal diseases Reference: Jönsson B et al. Comparator Report on Patient Access to Cancer Medicines in Europe, Revisited Available at: Accessed September

8 Deaths due to cancer as a share of all deaths by age group in the EU, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% < Cancer deaths Deaths due to other causes Deaths due to cancer as a share of all deaths by age group in the EU, Notes: cancer = ICD-10 C00-97; other causes = ICD-10 A00-Y89 excluding S00-T98 and C References: Jönsson B et al. Eur J Cancer 2016; 66:

9 Changes in the composition of total cancer costs h-exp. m-loss h-exp. m-loss h-exp. m-loss h-exp. m-loss h-exp. m-loss Expenditure on cancer drugs Other health expenditure Components of the total cost of cancer in the EU (in billion ; 2014 prices), Notes: Cancer is defined as ICD-10C00-D48 for health expenditure and ICD-10 C00-97, B21 for production loss due to premature mortality. EU = European Union; h-exp = health expenditure on cancer; m-loss = production loss due to premature mortality from cancer during working age. Reference: Jönsson B et al. Eur J Cancer 2016; 66:

10 Kg per case Innovation and progress in cancer care Trastuzumab use in five countries Survival rates for breast cancer 0,007 Belgium ,006 Malta Austria ,005 0,004 0,003 France Finland Netherlands Sweden Germany ,002 EU10 Portugal ,001 Slovenia Denmark United Kingdom Ireland Czech Republic France Germany Italy Spain UK Latvia 38.6 Breast cancer five-year relative survival rate, and (or nearest period). Note: 95% confidence intervals represented by H. Reference: Jönsson B et al. Eur J Cancer 2016; 66: ; OECD (2012), Health at a Glance: Europe 2012, OECD Publishing. Norway Iceland Survival (%) 10

11 Survival rate Changes in the composition of total cancer costs Breast cancer patient survival rates, by period of diagnosis and treatment 100% 80% 60% 40% 20% 0% Months of survival Diagnosed , therapy Diagnosed , therapy Diagnosed , notherapy Diagnosed , no therapy Reference: Howard D et al. Health Affairs 2016; 35:

12 Thousands of 2013 dollars Sales (million ) Innovation, value and price Are new medicines cost-effective? Drug Price per Life Year Gained versus Drug Approval Date 100 Source of survival benefit: Trial, overall survival 350 Trial, progression-free survival Modeling study <= 3 years 3-5 years >5 years Approval date References: Howard D et al. J Econ Perspect 2015; 29(1): ; Jönsson B et al. Comparator Report on Patient Access to Cancer Medicines in Europe, Revisited Available at: Accessed September The newest drugs makes up a fairly small and stable share of total sales 12

13 Innovation and price of new drugs New Anticancer Drugs Associated With Large Increases In Costs And Life Expectancy Changes in life expectancy and increases in lifetime medical costs for patients from to Breast cancer Therapy No therapy Lung cancer Therapy No therapy Kidney cancer Chronic myeloid leukemia Months of survival gained Cost increase ($1,000s) Reference: Howard D et al. Health Affairs 2016; 35:

14 Outcome P A Innovation and efficiency Creative challenge and destruction of existing patterns of care 0 1 P 1 0 1A R Resources 14

15 Innovation and efficiency Removing inefficient practices Practices to remove inefficiencies: Denmark - Coordination of cancer services (pakkeforløb) to reduce waiting times and regional variation across examination, diagnosis, treatment and aftercare UK Urgent two-week referral pathways: 93% of urgent referral patients should be seen by a specialist within 14 days of a referral from a GP Reference: Office of Health Economics and Swedish Institute for Health Economics. Improving Efficiency and Resource Allocation in Future Cancer Care. June

16 Creating the right incentives Right incentive 25% smoking reduction = Savings of 6 bn per year in Europe Wrong incentive Strict separation of inpatient and outpatient care Payment systems that stands in the ways for appropriate treatment decisions Appropriate use of generics and biosimilars between 2015 and 2020 = 7.1 bn estimated total savings Reference: Office of Health Economics and Swedish Institute for Health Economics. Improving Efficiency and Resource Allocation in Future Cancer Care. June

17 Conclusions Health care expenditures on cancer are low in relation to the burden of the disease Health care expenditures on cancer has been stable as a share of total health care expenditures But the content of expenditures have changed Innovation in cancer diagnosis and treatment challenges existing patterns of care Issues related to an efficient resource allocation comes on top of the agenda 17

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