Managing high-cost innovative medicines in Asia: what are the latest trends and real world practice? ISPOR Symposium September 5, 2016 Agenda Introduction of panel members and moderator Australia China Taiwan Questions and Answers 1
AUSTRALIA PROF SHU CHUEN LI Structure of Australian Health Care System Universal health coverage for all citizens and eligible residents funded by general taxation and special levy, supplemented by private health insurance Subsidized primary and community care through Medicare program Free care at state public hospitals with fund provided by the Commonwealth Government to the States through National Health Care Agreement 2
Medicare Program Introduced in 1984 to provide access to free or subsidised medical and hospital treatment for all Australian residents Medicare Benefits Scheme (MBS) Total MBS expenditure (2014/15): $20.2 billion (~31% total health expenditure) Pharmaceutical Benefits Scheme (PBS) PBS expenditure (2014/2015): $9072.1 million Current Areas of Health Care Expenditure Source: Australian Institute of Health & Welfare Projected Australian Government Health Spending Source: Australian Government National Commission of Audit 2014 3
PBS Expenditure, 2005-2014 Date (to June) Expenditure Increase from Previous Year 2013-14 $9.15 billion 1.7% 2012-13 $8.99 billion -2.1% 2011-12 $9.19 billion 3.6% 2010-11 $8.87 billion 5.7% 2009-10 $8.39 billion 9.3% 2008-09 $7.65 billion 9.2% 2007-08 $7.03 billion 9.3% 2006-07 $6.43 billion 4.3% 2005-06 $6.16 billion 2.7% 2004-05 $6.00 billion 7.0% Source: Department of Health and Ageing Expenditure on Retail Pharmaceutical by Types of Financing 2013 Source: OECD Health Statistics 2015 4
Reimbursing Drugs in Australia Reimbursement Schemes of Australian Government for Pharmaceutical Products Drugs funded under National Health Act 1953 Section 85 Drugs funded under National Health Act 1953 Section 100 Highly Specialised Drugs Program Efficient Funding of Chemotherapy Life Saving Drugs Program (LSDP) 5
Recent Trends in Pharmaceutical Expenditures funded by the Government Despite an overall slowing of growth in expenditure on the Pharmaceutical Benefits Scheme, the section 100 (s 100) program is growing rapidly. Those programs with high growth rates include: The Efficient Funding of Chemotherapy is the fastest growing program with an average annual growth rate of 62.61% from 2009 14. The Highly Specialised Drugs Program grew at a rate of 6.38% for the same period. Although not part of the PBS, the Life Saving Drugs Programme grew at a rate of 12.68% from 2009 14. Source: Parliament of Australia Research Paper Series 7 January 2015 Expenditure for Selected PBS Programs not funded under Section 85 (2009-2014) 6
Average Growth Rates for Selected PBS Programs (2005-2013) Average Growth of Section 85 drugs 3.73% Methods used to Control Pharmaceutical Costs in Australia 7
Methods Used to Control Pharmaceutical Expenditures Reference pricing Risk sharing arrangement Managed release Extended Patent Price disclosure Formulary reclassification Forced price reduction Increased co-payment Self-paying and through health insurance How big is spent out of pocket health spending? In 2010 11, the Australian Institute of Health and Welfare estimated that $24.3 billion of health spending came directly from the pockets of consumers an average of $1,082 per person. Out-of-pocket spending in Australia was about twice as high as in the United Kingdom and New Zealand Only 75% of out-of-pocket spending in the United States 55% of that spent by the Swiss. 8
Major Components of OOP in Australia Source: MJA 2013; 199: 475 478 9
Some Recent High Cost Drugs Approved for Reimbursement Drug Name Indication Treatment cost per patient per year Eculizumab (Soliris ) Brentuximab (Adcetris ) Approved in 2014 Atypical Haemolytic-Uraemic Syndrome (rare immune disease) Total costs to PBS (over 4 years) $500,000 $63 million Lymphoma >$110,000 $15.2 million Ivacaftor (Kayldeco ) Cystic Fibrosis $300,000 $174 million Nanoparticle albumin-bound Paclitaxel (Abraxane ) Everolimus (Afinitor ) Pancreatic Cancer $16,000 $92 million Kidney Cancer $35,680 $45.1 million Some Recent High Cost Drugs Approved for Reimbursement Drug Name Indication Treatment cost per patient per year Total costs to PBS (over 4 years) Approved in 2015 Pertuzumab (Perjeta ), Trastuzumab (Herceptin ) Ado-trastuzumab (Kadcyla ) Breast Cancer $82,000 $191 million combined Crizotinib (Xalkori ) Lung Cancer $80,000 $60 million Trametinib (Mekinist ) Melanoma $131,000 $437 million Alemtuzumab (Lemtrada ) Ranibizumab (Lucentis ) Ledipasvir/sofosbuvir (Harvoni ) Sofosbuvir (Sovaldi ) Daclatasvir (Daklinza ) Relapsing, Remitting Multiple Sclerosis Retinal Vein Occlusion Diabetic Macular Oedema $70,000 $50 million $10,000 $541 million Hepatitis C $100,000 $1000 million 10
Cost-effectiveness of Cancer Drugs Source: Howard et al. J Econ Perspective 2015; 29(1):139-162 Issues with Paying for High Cost Drugs There is no definition of high cost drugs in Australia. Recent HTA reviews did not consider the financing of pharmaceutical drugs. Despite the contracting trend in growth of PBS spending overall, a number of PBS programs are showing above average growth rates. While some drugs used in the treatment of rare diseases may be clinically effective, they are prohibitively expensive and rarely cost effective. Patients in Australia are paying increasingly more in out-ofpocket for pharmaceutical products. 11
Current Negotiation Mechanism for Innovative Medicines In China Province Level Jianwei Xuan, PhD. Professor, Health Economic Research Institute, Sun Yat-shen University Singapore, 09, 2016 An Review of the Current Drug Negotiation Mechanism in China Province and City level 12
Jiangsu Province Listed patent drugs for Reimbursement: Glivec Tasigna Herceptin The Mechanism of the Selection Process in Jiangsu Province Established advisory committee include experts in the field of medicine, pharmcology, and the insurance. Evaluation is focused on the efficacy, safety, and the economic Value. The following conditions have to be met Within CFDA labeling, no off-label indication considerations The clinical expert recommendation is the key. The average annual drug cost per person is under 100,000RMB (15,000USD) every year. 13
Zhejiang Province Order Drug Name Generic Name Brand Name 1 Imatinib Mesylate Tablets Gleevec 2 Pemetrexed Disodium Alimta 3 Gefitinib Iressa 4 Doxrubicin Liposome Libod 5 Cetuximab Erbitux 6 Decitabine 7 Anti-human T Lymphocyte Rabbit Immunoglobulin ATG-Fresenius S 8 Trastuzumab Herceptin 9 Recombinant Human Coagulation Factor Ⅶa Novoseven 10 Rituximab Mabthera 11 Infliximab Remicade 12 Lanthanum carbonate Hamol Limited 13 Nimotuzumab Nimotuzumab 14 Dalmarelin Acetate Somatuline 15 Teriparatide Forsteo The Mechanism of Drug Selection in Zhejiang Province 1. The origin of drugs to be negotiated:. 1 Each major city within province recommend 15 drugs. 2 15 major hospitals within the province each recommend 15 drugs. A total of 62 drugs were recommended for negotiation 2. The selection process: 1)The medication annual costs needs to be around Zhejiang Province s GDP per capital and no less 2)KOL voting 3)Leadership committee final decision to leave 31 drugs in the pool. 4)31 drugs were divided into 8 groups (8 disease categories). 3. Negotiation:. 1)There was general guiding principals on efficacy, safety, and cost effectiveness to grade and evaluate the 31 drugs. 2) No clear or public available negotiation criterial available 14
Hunan Province Order Generic Name Drug Name Brand Name 1 Nilotinib Tasigna 2 Imatinib Mesylate Tablets 3 Dasatinib Sprycel 4 Recombinant Coagulation Factor Ⅸ for Injection BeneFIX 5 Bevacizumab Avastin 6 Icotinib Hydrochloride Conmana 7 Erlotinib Hydrochloride Tarceva 8 Gefitinib Iressa 9 Pemetrexed Disodium for Injection MTA 10 Trastuzumab Injection Herceptin 11 Rituximab Mabthera 12 Bortezomib for Injection Velcade 13 Decitabine 14 Lanreotide acetate for injection Somatuline 15 Lanthanum Carbonate Chewable Tablets Hamol Limited The Selection Mechanism in Hunan Province Two round of KOL reviews: First round, selected 29 brands from the pool of 100 brands included in other provinces negotiation list. Then an expert panel was established. In the second round, experts from price bureau, Health and Family Planning Commission, Finance commission, and clinical experts to negotiate the price and then grade the brands. Top 1-3 brands within a specified disease category were selected. 15
Shenzhen City Order Generic Name Brand Name Formulation 1 Bevacizumab Injection Avastin injection 2 Bosentan Tablets Tracleer tablet 3 Recombinant Human Endostatin Injection Endostar injection 4 Icotinib Hydrochloride Tablets Conmana tablet 5 抗 Infliximab for Injection Remicade injection 6 Adalimumab Solution for Injecton Humira injection 7 Bortezomib for Injection Velcade injection 8 Idarubicin Hydrochloride for Injection Zadevos injection 9 Idarubicin Hydrochloride for Injection injection 10 Fulvestrant Injection Faslodex injection 11 Paliperidone Palmitate Injection Invega Sustenna injection The Selection Mechanism In Shenzhen City 1. Focusing on major targeted cancer therapies not included in the current formulary list 2. Medications have to be on the market > 3 years, efficacy is confirmed. 3. Price has to be lowest in the country, and will also be dynamically controlled. 4. The drug was supported by PAP or charity donation. 5. The drug was considered cost-effectiveness by medicine insurance panels. 16
Inner Mongolia Province Order Generic Name Drug Name Brand Name 1 Trastuzumab for Injection Herceptin 2 Erlotinib Hydrochloride Tarceva 3 Icotinib Hydrochloride Conmana 4 Gefitinib Iressa 5 Recombinant Human Endostatin Endostar 6 Crizotinib Capsules Xalkori 7 Bevacizumab Injection Avastin 8 Cetuximab Injection Erbitux 9 Rituximab Injection Mabthera 10 Imatinib Tablets Gleevec 11 Nilotinib Capsules Tasigna 12 Bortezomib for Injection Velcade Inner Mongolia Province has no formal selection mechanism The reimbursement list is determined by previous researches and company submissions. Total 12 drugs were selected for reimbursement cover 8 diseases 17
Qingdao City Order Drug Name Generic Name Brand Name 1 Dasatinib Tablets Sprycel 2 Trastuzumab for injection Herceptin 3 Icotinib HydrochlorideTablets Conmana 4 Sunitinib Malate Capsules Sutent 5 Sapropterin HydrochlorideTablets Kuvan 6 Erlotinib Hydrochloride Tarceva 7 Lanreotide acetate for injection Somatuline 8 Recombinant Human Interferonγ for Injection(β-1b) Betaferon 9 BosentanTablets Tracleer 10 Imatinib Mesylate Tablets Gleevec 11 Erlotinib Hydrochloride Tablets Tarceva 12 Gefitinib Tablets Irissa 13 Cetuximab Solution for Infusion Erbitux 14 Crizotinib Capsules Xalkori 15 Recombinant Human Endostatin Injection Endostar 16 Bortezomib for Injection Velcade 17 Pegaspargase Injection 18 Etanercept for Injection Erel 19 Adalimumab Solution for Injecton Humira 20 Infliximab for Injection Remicade 21 RecombinantHumanTNFReceptor-IgFusionProteinforInjection Etanercept 22 Iguratimed Tablets 23 Imiglucerase for Injection Cerezyme 24 Recombinant Coagulation Factor Ⅸ for Injection BeneFIX 25 Lanthanum Carbonate Chewable Tablets Hamol Limited 26 脑深部电刺激疗法刺激器 Deep brain stimulation stimulator 27 722 实时动态胰岛素泵系统 722 Real - Time Dynamic insulin pump system Qingdao City has no formal selection mechanism The Bureau of Human Resources and Social Security determined 24 drugs and 2 medical instruments after price negotiation for reimbursement Three principles governing the selection 1. The drug has definite and significant efficacy 2. The drug is unreplaceable in the range of the drugs covered by the medicine insurance 3. The total costs of the drug is expensive 18
A Summary All provinces selection process are more focused on a formal expert group evaluation based on their experience, no formal evaluation standard established based on clinical and economic evidence Efficacy, cost-effectiveness and the impact on the insurance fund are the primary factors considerable Most important factors influence drug negotiation in different cities Region Influenced factors Influenced factors Influenced factors Jiangsu province 1 Epidemiology Cost-effectiveness Budgetary impact Jiangsu province 2 Efficacy Clinical needs pharmacoeconomics information Zhejiang province Efficacy Cost-effectiveness Price Hunan province 1 Efficacy Cost-effectiveness Burden of illness Hunan province 2 Efficacy Cost-effectiveness Price Shenzhen city Efficacy Cost-effectiveness Price Inner Mongolia province 1 Efficacy Budgetary Impact Price Inner Mongolia province 2 Efficacy Budgetary Impact Price Qingdao city Efficacy Cost-effectiveness Price 19
the factors influence the negotiation decisions (N=9) Statistical frequency totally insignificance insignificance rather significance significance Very Significant 1.epidemiology information (i.e. incidence, prevalence et.al) 1 3 5 2.total burden information of disease economics (i.e. high cost of the disease, inpatient,heavy burden of medicine insurance) 3 4 2 3.clinical efficacy of the drug 1 8 4. Comparative effectuiveness of the drug with alternative interventions 5. cost-effectiveness information(i.e. cost-benefit et.al) 1 3 2 3 3 3 3 6. price of drug 1 5 3 7. the budgetary impact of the fund due to the inclusion of drug into formulary list 2 3 3 The summary of different factors according to the significance 1 (n=9) Clinical efficacy of the drug in the diease 2 (n=8) price of drug 3 (n=6) total BOI informations of dieases (i.e. cost of the diease,inpatient,heavy burden of medicine insurance) costeffectiveness of pharmacoeconomic s information(i.e. costeffectiveness et.al) the budgetary impact of the fund due to the drug accepted by the medicine insurance 4 (n=5) epidemiology informations(i.e. incidence,prevalence et.al) comparsion difference between the efficacy of the drug and the intervention method 20
Thanks! 4 1 TAIWAN PROF CJ CHANG 21
Outline Health Care environment Total Health care expenditure ( NHI. Gov. public) Health Care system ( NHI system- Payer, HP/GP/ Chinese medicine/dentistry) Reimbursement system Top 10 sales drug in US and Taiwan (2014) Launch time/ current unit price ( in both US and Taiwan) High Cost Drug reimbursement case in Taiwan (2nd Generation NHI) What has been done? Taiwan Healthcare Environment Geography and Population» Area: 36,000 km square» Population: 23 Mio. Healthcare System Taiwan s National Health Insurance (NHI) system launched in 1995 2 nd Generation NHI (2G NHI) Reform scheduled in Jan. 2013 National Healthcare Expenditure (USD 31bn) NHE distribution NHI coverage 26% of NHIE NHI Expenditure (USD 18.2 bn) Drug Expenditure (USD 4.89 bn) Drug use by Channel 6% of 7% of GDP GDP NHI 53% Gov'nt 6% Private 41% 99.5% of 99.6% TTL of TTL population 4% of 4% of GDP GDP 25% of 26% of NHIE NHIE DS 17% GP 15% Hospital 68% 22
History of Health Insurance Finance in National Health Insurance 75%: Medical Service $$$ 25%: Medicine Basic concept is PAY for SERVICE Pharma/Device Companies Co-payment Pay at ATP* Product s Patients Premiums NHI Card Medical Services & Medicines NHIA (Single Payer) Pay at NHI Price Providers Medical Claims at NHI Price * Actual Transaction Price 23
Comprehensive Coverage & Benefit Easy & equitable access: no gatekeeper system HIGH volume of medical services Disease Inpatient, Outpatient Care & Prescription Drugs Dental Services (orthodontics, prosthodontics excluded) In average 16.9 visits/person in 2014 (OPD, IPD, ER included) 2014 Attendance Rate (/100,000/year) Injury Maternity Care Traditional Chinese Medicine (TCM) Day Care for the Mentally ill Dental, 45,604 ER, 17,729 Clinics, 90,306 Home Nursing Care TCM, 28,931 Hospitals, 8,325 Total Drug Sales in USA and Corresponding in Taiwan USA TOP 10 Taiwan CORRESPONDING Product Main therapeutic Area Launch Date Unit Price (USD) Launch Date Reim. Unit Price(USD) 1 Humira 2 Harvoni 3 Enbrel 4 Remicade Immunology (Organ Transplant, Arthritis etc.) Infectious Diseases (HIV, Hepatitis etc.) Immunology (Organ Transplant, Arthritis etc.) Immunology (Organ Transplant, Arthritis etc.) 2002/12/31 2,458 2003/11/10 468 2014/10/10 1,350 2015/12/22 1998/11/2 615 2002/4/30 120 1998/8/24 1,286 2015/9/1 5 MabThera/ Rituxan Oncology 1997/11/26 96 2012/5/7 26 6 Lantus Diabetes 2000/4/20 30 2002/9/20 14 7 Avastin Oncology 2004/2/26 218 2005/5/24 72 8 Herceptin Oncology 1998/9/25 4,874 2000/12/18 1,877 9 Revlimid Blood Related Disorders 2005/23/27 644 2010/6/15 276 10 Sovaldi Infectious Diseases (HIV, Hepatitis etc.) 2013/12/6 1,200 2015/09/16 24
Total Drug Sales in Taiwan and Corresponding in USA Product Main Therapeutic Area Launch date Taiwan Top 10 Sales in 2014 Reim. Date Sales (million in USD) Reim. Unit Price (USD) USA CORRESPONDING Launch Date Unit Price (USD) 1 Herceptin Oncology ( breast cancer) 2000/12/18 2002/4/1 62.76 1,877 1998/9/25 4,874 2 Baraclude Hepatities B, Chronic 2006/6/22 2008/8/1 62.54 5.7 2005/3/29 52 3 Glivec Chronic Myeloid Leukemia 2001/10/3 2002/5/1 53.21 19.87 2001/5/10 112 4 Plavix Cadiology/Vascul ar 2000/7/3 2001/1/1 49.52 1.44 1997/11/17 7.7 Disease 5 Crestor Cadiology/Vascul ar Disease 2004/12/2 2005/5/1 48.32 1.18 2003/8/12 10 6 Lipitor Cadiology/Vascul ar Disease 2000/5/15 2000/11/1 47.05 1.03 1996/12/17 13 7 Nexavar Oncology (HCC) 2007/10/23 2009/10/1 39.75 34.67 2005/12/20 151 8 Alimta Oncology (LC) 2004/10/14 2006/3/1 39.33 1,079 2004/2/4 3794 9 Kogenate Hematology 2001/3/12 2001/11/1 37.37 0.81 2000/6/26 1.75 10 Enbrel Immunology (Organ Transplant, Arthritis etc.) 2002/4/30 2003/3/1 35.52 120 1998/11/2 615 Total Drug Sales in USA and Corresponding in Taiwan USD 5000 Taiwan USA 3 times 4000 3000 5 times 2000 1000 5 times 4 times 2 times 3 times 2 times 0 25
Findings Top sales Most of top selling products are Oncology/Rheumatoid Arthritis products (Biologics) in USA Half of Taiwan top selling products are in general medicine Three of top selling drug in USA is not reimbursed in Taiwan yet Two HCV products became Top 10 sales products right after launch Reimbursement time gap None of the top drugs in US were launched in Taiwan within the same year Price Unit price of top sales drugs in US is 2 ~ 3 time than in Taiwan for general medicine Unit price of top sales drugs in US is 3 ~ 5.5 times than in Taiwan for Oncology or Biologics HIGH COST DRUG REIMBURSEMENT CASES IN TAIWAN (2ND GENERATION NHI) 26
Reimbursement Review Process NHI Act 2 nd generation HTA Proposal of new item listing NHIA Expert meeting Publish HTA report (Drug Benefit Committee) 1 Publish 1 meeting Drug agenda Benefit and HTA Committee report (DBC) Return to NHIA for revision No consensus 2 PBRS meeting Publish meeting minutes Present both proposals Submit to MOHW for approval Reach consensus Reject and close the case PBRS: Pharmaceutical Benefit Reimbursement Scheme PVA: Price Volume Agreement Reject and Close the case Approved cases: PVA* & temporary payment conditions Submit to MOHW for yearly announcement Page 53 New Drug Pricing Principles Based on innovation, efficacy, safety & investment Class I Breakthrough Drug New mechanism, first in treatment or remarkable improvement from current treatment. Price capped at A10 median price Extra 10% mark-up with local R&D and clinical trials reaching up to a certain scale* Class 2A New drugs with moderate improvement Class II Same therapeutic group Class 2B New drugs that have similar clinical values 1) The lowest A10 price; 2) The price in the country of manufacturing; 3) International prices ratio; 4) Ratio to treatment course dosage (comparing with reference products) 1) Extra 10% mark-up with local R&D and clinical trials reaching up to a certain scale* 2) Up to 10% mark-up with local pharmaco-economics (PE) study * Criteria of P&R mark-up with local R&D and clinical trials modified from the TFDA regulation for NCEs CPP-waiving requirements (so called, 38-1; 38-2 regulation) Page 54 27
TO DIFFERENTIATE THE HIGH COST DRUGS IN TAIWAN HEALTH INSURANCE SYSTEM Price Results of New Drugs: 60% of A10 Median Approved price/ proposed price *A10 countries: US, Canada, Japan, Australia, UK, France, Germany, Sweden, Switzerland, Belgium **I: breakthrough drug, IIA: moderate improvement of benefit, IIB: similar clinical benefit Source: Adopted from presentation by senior reviewer, Janice Chen, June 2016. Approved price/ A10 median Approved price/ A10 lowest All New Drugs 82% 60% 89% I 100% 88% 99% IIA 85% 71% 117% IIB 80% 52% 73% Oncology Drugs 94% 68% 86% I 100% 89% 98% IIA 96% 71% 100% IIB 91% 56% 71% Non-oncology Drugs 80% 59% 89% I 100% 87% 100% IIA 83% 71% 120% IIB 78% 52% 74% 28
What Has NHIA Done So Far? Lower reimbursement price ( compared with A10 country) Limited treatment cycles eg. Avastin (CRC), Erbitux (CRC) Revlimid (multiple myeloma), Velcade (multiple myeloma) Herceptin (BC) Restricted reimbursement scope ( narrowed indication): Nexavar (HCC), Herceptin (BC).etc Price volume agreement HCV case Future IO treatment? QUESTIONS AND ANSWERS 29