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Managed Entry Agreements and Funding for Expensive Therapies
Mondher Toumi, Szymon Jarosławski
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eBook - ePub
Managed Entry Agreements and Funding for Expensive Therapies
Mondher Toumi, Szymon Jarosławski
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About This Book
Market entry agreements (MEA) for pharmaceuticals have become extremely popular and widespread geographically. Emerging countries that have not yet begun to introduce MEAs are now actively engaged in doing so. This book examines the concept of MEAs, detailing how depreciation of some specific regenerative therapies through intangible asset amortization is unavoidable.
The authors provide a historical vision of the development of MEAs with experiences, failures, and successes that have shaped the evolution and place of MEAs in access to pharmaceuticals. They provide an extensive review of MEA typology and propose a new one that is pragmatic and actionable.
FEATURES
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- Discusses the affordability of future therapies and the possible challenges for health insurance systems
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- Addresses the practical and applied issue of market access and includes the most up-to-date developments, such as the Pelosi bill
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- Describes the potential paradigm change that will challenge all payers and may question the sustainability of our health care systems
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- Highlights the gradual move from repeated treatment administration to a single administration with the potential for a definite cure
Managed Entry Agreements and Funding for Expensive Therapies provides invaluable information to all stakeholders involved in market access and to students in the field.
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Chapter 1Introduction to Managed Entry Agreements
DOI: 10.1201/9781003048565-1
1.1 HISTORY
The arrival of expensive treatments (ETs) that have high therapeutic potential and address the highly unmet needs of patients may present extreme challenges to payers and manufacturers [1, 2]. The challenges arise from the high budget impact of these technologies for payers but also from the fact that they are oftentimes approved with limited evidence [3]. Indeed, there is a profound difference in how regulators and payers assess novel medicines; therefore, a positive marketing authorisation decision does not always translate into a positive reimbursement decision. Whereas regulators assess the benefit-risk ratio direction (positive, negative) of new technologies regardless of their cost and impact on the healthcare system, payers need to manage the magnitude of the added benefit versus standard of care or usual care and to put it in perspective with feasibility of use, the impact of the ET on the healthcare system, and in some countries the cost associated to the adoption of ETs. Therefore, the latter require an accurate appreciation of the incremental benefit of the ET versus the current treatment to be able to estimate payers’ willingness to pay for the ET. If there is significant uncertainty regarding the benefit, and eventually the cost, payers will not be able to make informed reimbursement decisions and they may deny financing of the ET or request a substantial price discount.
Also, institutionalised payers face increasing difficulty in denying positive reimbursement decisions due to discontent from patient associations and the general public [4] especially in poorly serviced populations, in disabling or life-threatening health conditions or when the expected benefit is believed to be very high. Further, when ETs are denied reimbursement by payers, manufacturers are unable to secure market access for products whose development may have consumed large sums of money. This may in turn disincentivise future research and development by the industry into therapeutic areas with significant unmet clinical needs.
Particularly in Europe, there have been cases of high-income countries denying financing of patient access to novel treatments because they were deemed too expensive. For instance, in the 2000s, Italy hesitated the public reimbursement of Alzheimer disease drugs and the UK has denied reimbursement by the National Health Service of several multiple sclerosis (MS) drugs and numerous cancer treatments [5–8]. To enable patient access to novel treatments and manage the financial burden of these technologies on public budgets, national payers and manufacturers have proven to be creative in proposing alternative reimbursement solutions. The so-called Managed Entry Agreements (MEAs) are contracts agreed between payers and industry to address the issue of high drug prices, especially if clinical evidence for the products is not well established [9–11]. Ever since, MEAs have been established in a range of very high-income countries, e.g., in Italy [12, 13], the UK [8], France [14], Australia, New Zealand [15], and Belgium, but also in medium- to high-income countries such as Poland and Hungary [16].
One of the first examples of MEAs in Europe was the CRONOS project that began in 2000 [17]. The Italian medicines agency (AIFA) developed this performance-based agreement to inform a definitive decision on the reimbursement of acetylcholinesterase inhibitors (ChEl) in Alzheimer’s disease (AD) [18]. The drugs attracted AIFA’s scrutiny because they assumed chronic treatment of a sizeable population of elderly patients. Moreover, it was suspected that only some patients may benefit from the therapy. Broadly, the rationale behind the CRONOS scheme was to evaluate if ChEI are effective in real-life clinical practice and to assess their long-term effectiveness and subsequently to make a reimbursement decision [19]. Consequently, CRONOS presumed collection and analysis of defined health outcomes from a cohort of AD patients in Italy. Such an approach to conditional reimbursement is known as coverage with evidence development (CED). It also assumed that the public health insurer reimbursed medicines only in patients who responded at four months of treatment, while the drug cost for non-responders was covered by manufacturers [20, 21]. Patients’ individual data were reported in a specific registry. In 2004, the Italian agency concluded that CRONOS provided evidence that enabled the decision to fully finance these medicines, with restrictions regarding patient diagnosis and continuation of treatment and prescription limited to specialists [18]. This ended the course of this MEA.
In contrast to the Italian MEA, the UK’s agreement for MS drugs has proven to be largely unsuccessful in terms of both patients access to the treatment, savings to payers and new evidence generation. Early on, the UK’s HTA agency, the National Institute for Health and Care Excellence (NICE), considered that the incremental cost-effectiveness ratio (ICER) of β-interferons/glatiramer for the treatment of MS was too high for them to be financed by the NHS [22]. In 2002, the UK government established an MAE with four MS drugs manufacturers under which the drugs were to be financed by the NHS at a negotiated premium price, but the scheme assumed reduction of the price based if unfavourable effectiveness evidence from the scheme became available [23]. The MAE presumed also a follow up of 10,000 patients for over 10 years to assess whether the benefit observed in approval trials could be observed in practice [24]. This was a typical CED scheme. However, due to poor scheme governance and design flaws, no price reviews had taken place in the first 7 years of the scheme’s operation [22]. Further, patients’ access to the drugs was very limited. In 2007, there were only 11.5% of MS patients receiving the treatments in the UK vs. 35% in Western Europe and 50% in the US. While the MS scheme was developed as an experiment, the UK’s government and NICE agreed on dozens of diverse, mostly financially-based MEAs in the following years [25, 26].
The above early examples show that while payers employed MAE as a way to manage uncertainty about the value of novel ET, manufacturers did so to prevent apparent reductions in the list prices of their products. Indeed, both the schemes assumed that the drugs will be sold at premium prices. The drive of manufacturers to preserve high list prices was dictated by the external reference pricing system that is used in many countries when pricing novel products. If prices are reduced in one country, it may have a spillover effect on other locations and lead to international price erosion.
Ever since, MAEs that obscure real-life net prices of novel expensive therapies have become widespread in Europe, but also all over the world. In the US, which features a fragmented market of private insurers alongside the public Medicare programme, apparent reduction of the list price for a single payer may lead to price erosion across remaining payers in the country and overseas. Therefore, MEAs have become an increasingly common tool perceived as a linkage between the value and the price of novel technologies in major pharmaceutical markets. However, while some of the MEAs aim at generating novel effectiveness evidence that complements data from approval trials, they are in most cases addressing affordability and willingness to pay of payers rather than uncertainty about drugs’ value. They have become in most cases a disguised discount.
1.2 DEFINITION AND CONCEPTS
Over the last decade, there have been numerous approaches to classify the various types of MEAs and many terms have been proposed before the current terminology. MEAs have been known as innovative contracting, risk-sharing schemes, market access agreements, reimbursement schemes and patient access schemes to name a few [17, 27]. Interestingly, the term risk-sharing concept referred to the idea that payers and manufacturers should share the risk of novel therapies being potentially less effective in real clinical practice than in clinical trials submitted for marketing authorisation [28]. This principle was employed in both the Italian Cronos project and the UK’s MS drugs scheme described above, with mixed results. Howe...