The cost of cancer treatment Lieven Annemans Ghent University Lieven.annemans@ugent.be January 2016
What s the problem? those prices are too high the budgets will explode these drugs offer survival benefit the medical need is very high 2
15 years cumulative cost after diagnosis of CML in the US (Lin et al, Med Care 2016) 3
Mean life expectancy was 2.2 years in 1995 and increased to 4.2 years in 2007. Lin et al, Med Care 2016 4
Principles of good healthcare QUALITY SOLIDARITY SUSTAINABILITY 5
A framework for analysis: the innovation cycle Value deficit The Market usage challenge The Development challenge Provide Value for money Add value The Market access challenge 6
Key Problems Value deficit Overuse Lack of transparency Provide Value for money Add value Slow, rigid and expensive processes Lack of transparency, Lack of consistency, High prices! 7
Pricing = basically two options cost+ price price justified by costing structure. acceptable mark-up as compensation for the costs of capital investment in R&D difficulty in assessing the true cost of R&D (cfr failures) wrong incentives ( spend a lot on R&D ) Added value not sufficiently recognized Value based pricing Better added value is recognized by better rewarding profit margin may not be in reasonable proportion to the cost structure 8
Treatment cost Savings High net Cost Cost Value for money? Current care Net C Savings Extra C L. Annemans. Health economics for non-economists. Academiapress, 2008 Health effect (e.g. QALYs) 9
Cost Cost-effectiveness NOT C-Eff New Current care New C-Eff New Dominant Health effect (QALYs) 10
Quality Adjusted Life Years INDEX ( utility value ) (via EQ5D) Perfect health 1 0.6 0.5 +0.4 2 +1 +0.5 Death 0 4 5 TIME 11
Where is the threshold? Desaigues et al (2007): willingness to pay: 40,000 per Healthy Life Year (for EU25 countries) BENCHMARKING e.g. cost-effectiveness of caring for a dialysis patient historically 50,000 $ per QALY: WHO: Highly cost-effective (< GDP per capita); Costeffective (between one and three times GDP per capita); (e.g. Belgium = +/- 35000) http://www.who.int/choice/costs/cer_thresholds/en/ At the discretion of the decision maker (England: 20,000 per QALY) 12
Examples of reimbursed medicines in Belgium Treatment Champix Smoking cessation Cost per QALY gained ( ) dominant Procoralan Chronic Heart Failure 6,000 Brillique Acute Coronary Syndrome 14,000 Prezista HIV 16,000 Sovaldi HCV 18,000 Velcade multiple myeloma Alimta NSCLC Tysabri MS 30,000 40,000 47,000 CTG/CRM (RIZIV) (at official prices) 13
Cost-effectiveness of TKIs in CML? Diagnosed in 1995 Diagnosed in 2007 Difference ICER Life Years 2.2 4.2 2.0 Costs $127,438 $278,236 $150,798 $74,144 Lin et al, Med Care 2016 14
Extra problems! 1. Uncertainty 2. Medical, therapeutical and societal need 3. Budget impact 15
PROBLEM 1: Uncertainty Give us more evidence that your medicine is value for money PAYER INDUSTRY Allow us first to the market (reimburse the medicine) and then we will be able to show real life evidence
Solution: adaptive pathways and performance based agreements 1. Coverage upon evidence development Temporary approval, then final 2. Performance Linked Reimbursement (outcomes guarantee) No cure no pay (on individual level) Not as good as promised (on population level) pay less 17
PROBLEM 2 Medical need (Scitovsky) Low medical need no funding High medical need more solidarity invest more Acceptable health
England: proposed solution 20K per QALY Burden of Illness Wider Societal Impact Robustness of the cost/qaly Patient s QoL insufficiently captured Innovative nature of the technology 50K per QALY Wider objectives of the NHS currently unclear how each modifier will contribute to the weighting factor M. Brown 19
PROBLEM 3: Budget impact The economic and equity rationale for carrying out budget impact analyses is opportunity cost = benefits forgone by using resources in one way rather than another Cohen et al (2008) Need for well documented estimates at population level! Need for very clear description of the target population Need for a stratified approach (but still need to show value for money!)
in 2020 oncology PMx will represent 8.9 to 9.5% of the total pharmaceutical specialties budget. Vlerick Healthcare Magement Centre - Oncology Horizon Scanning
B U D G E T BRINGING UNNECESSARY DEATHS/DISABILITY by GENERAL EXCLUSION from TREATMENT Not recognizing the value goes against the objectives of health care policies; If we only look at budget impact, then we better let patients die. 22
Back to the key Problems Value deficit Overuse Lack of transparency Provide Value for money Add value Slow, rigid and expensive processes Lack of transparency, Lack of consistency, High prices 23
10 recommendations for a joint solution Value deficit 1. More Public Private Partnerships (IMI) to facilitate development 2. Adaptive trial designs and adaptive authorisation 3. Early advice & dialogues Provide Value for money Add value Faster and more efficient development Innovate the way we innovate 24
10 recommendations (cont d) Value deficit Provide Value for money Add value 4. Value based pricing, accounting for savings elsewhere & QALY gains 5. Adaptive reimbursement processes & outcomes based agreements 6. Explicit societal limits & value for money benchmarks 7. Importance of medical need (involve citizens and patients!) and budget impact to review/modulate the cost/qaly thresholds 8. Industry to show the fairness of its prices 25
10 recommendations 9. Monitor the usage of the innovations (e-health) 10.Stimulate right use and discourage misuse Value deficit Provide Value for money Add value 26
Hospital days end of life USA 5.0 10.7 Netherlands England 7.0 7.4 17.8 18.3 Canada 5.0 19.0 Germany 5.0 21.7 Norway 6.0 24.8 Belgium 10.6 27.7 0.0 5.0 10.0 15.0 20.0 25.0 30.0 last 30d last 180d Bekelman et al, JAMA, January 2016 27
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Re-investing in health! Overuse More Prevention & Innovation
The cost of cancer treatment Lieven Annemans Ghent University Lieven.annemans@ugent.be January 2016