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© WHP world health partners | management consulting
Market Access status and trends 2015 Jorge Wernli ECPM 22-24 July 2015, Uni Basel
© WHP world health partners | management consulting [email protected]
Agenda- Status and Trends Market Access
15.06.15 ©WHP, [email protected] 3
1. Assure KSF- early evidence, knowledge & capabilities
2. Champion patient orientated market access policies & concepts
3. Understand /participate in health political dynamics
4. Consider well balanced P&R strategies 5. Outlook and challenge
Value of health = the definition changed substantially over the last 20 years
15.06.15 5
WHO: Health is the state of complete physical, mental and social well-being and not merely the absence of disease
Included are therefore main elements of Quality of Life - Physical - Mental - Social well-being
©WHP, [email protected]
4 elements towards an optimal price in Pharma
15.06.15 6
Pharmaceutical Price
Socially accessible
Medical - Scientifically sustainable
Politically acceptable
Financially sound
Pharma Industry
Health-Authorities
Ministry of Social Affairs Patients
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Drug therapy evaluation: commonalities
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Nat
iona
l
Regi
onal
Market
Qua
lity
Safe
ty
Effica
cy
Market License
Pricing & Reimbursement Q = Quality
E = Efficacy S = Safety U = Usefulness N = Need C = Cost-effectiveness
Guenther Lewandowski et al VP BGA, 1985
Loca
l Lo
cal (
hosp
)
HTA (Need, Usefulness Cost - effectivness)
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KSF, critical knowledge and capabilities- be well early well prepared, be innovative
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1. Legitimacy: Assure early payer-relevant clinical and health-economic evidence /form developed and implemented
2. Reputation: gain economies of time by being a well-known leader-player
3. Knowledge: Know well your products and legitimacy = clinical and health-economic evidence and local pricing policies/system
4. Environment: Understand and participate in shaping local market access /P&R policies, dynamics and systems in place
5. Negotiation: Prepare well negotiation strategy and implement tactics
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Legitimacy: needs vary by indication
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Unique Propositio
n
Unacceptable
Unique Propositio
n
Unacceptable
Unique Propositio
n
Unacceptable
Unique Propositio
n
Unacceptable
Unique Propositio
n
Unacceptable
Unique Propositio
n
Unacceptable
Ultra-Orphan Oncology MaB Alzheimer’s Anatomical procedure for hypertension
Source: A. Cirrincione, 2014 ©WHP, [email protected]
The required level of evidence vs acceptability of premiums vary by indication- unmet needs
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Leve
l of E
vide
nce
Expectations of minimal incremental clinical benefit over SoC
Alzheimer’s Hypertension
Breast Cancer
Pancreatic Cancer
Ultra Orphans
Source: A. Cirrincione, 2014 ©WHP, [email protected]
What makes a product valuable ? Payers perspective
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1. Unmet clinical need of high priority 2. Meaningful clinical differentiation 3. Clinical and other evidence that cannot easily be “ignored”
or “discredited” – regulatory label claims – head to head RCTs – hard endpoint outcomes – certainty of promised results
4. Manageable budget impact 5. Acceptable benefit-to-cost ratio
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R&D to address payers needs early
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§ Think about Pricing and HEOR strategy early in clinical development
§ Consider the possible health economic impact/value of the drug early in development (pre-phase II)
§ include relevant QoL instruments in the study protocols
§ consider measuring direct /indirect resource impacts in the pivotal studies
§ «Within-Trial» based-HE analyses (eg FAIR-HF, Vifor Pharma) are better accepted than overly complex, indirect HE models
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Innovations are mostly in the 3 Quadrant
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Better efficacy but more costly !
Source: Dr. Peter Braunhofer,2012
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P&R KSFs,- regulatory and clinical opportunities and caveats
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1. Any registration change can impact P&R label 2. Clinical evidence vs wrong ref product reg.
dossier 3. Sequence of indications, TAs label 4. Max application dosage label 5. Sequence of strengths launch, defense 6. Sequence of pack-sizes launch,
defense 7. Clinical value evidence launch, defense 8. Economic value evidence launch, defense 9. Strength of advocates launch,
defense ©WHP, [email protected]
Reputation footprint- coherence needed
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• What makes a company personality ?
1. THINK 2. TALK 3. LOOK 4. WALK
Source: Prof. Dr. Walter P. von Wartburg et al 1996
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Product knowledge, acceptable therapeutic “ technical “ referencing is key
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Sl # Trade Name Form Pack Size New Pharmacy Price (AED)
New Public Price (AED)
Company Source Agent 2417 FEROMAX Injection/Solution
for 5ml Ampoule x 5
83.86 104.00 JULPHAR (GULF PHARMACEUTICAL INDUSTRIES)
UAE JULPHAR
2419 FEROSAC 20mg/ml
Injection 5ml Ampoule x 5
83.70 104.00 SPIMACO (AL QASSIM PHARMACEUTICAL PLANT)
SAUDI ARABIA CITY PHARMACY CO.
New therapy
Gulf States
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3 trends in Pricing & Reimbursement
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Pricing & Reimbursement
Innovation value Usefulness Need Cost-Effectiveness
Pricing & Reimbursement
Innovation value Usefulness Need Cost-Effectiveness
Pricing & Reimbursement
Innovation value Usefulness Need Cost-Effectiveness
Pricing & Reimbursement
Innovation value Usefulness Need Cost-Effectiveness
Pricing & Reimbursement
Innovation value Usefulness Need Cost-Effectiveness
U= Innovation value/rel. effectiveness N= Need C = Economics /Cost-effectiveness
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For pharmaceuticals there are fundamentally two different P&R market types
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Healthcare Pharmaceutical markets
Regulated Markets
Free Markets
Semi-regulated Markets
• USA • Germany
Public payers Private payers
• CH • UK
Mixed ©WHP, [email protected]
Strategic negotiation dimensions
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3st D: Setup
2nd D: Deal Design
1st D: Tactics
3 Ds concept**
Political/Reputation
Polit
ical
*
• ** 3Ds, Sebenius et al • * Healthcare specific, von Wartburg et al
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Negotiation success: substance vs relationship
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1. Outcome – Substance component : – if substance is required, – relationship measures don’t
help 2. Efficiency
– Relationship – component: if relationship, – trust is required, scientific evidence is of
no help
Subs
tanc
e Relationship
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15.06.15 21
2. Champion applied market access policies & concepts/definitions
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Pricing & Reimbursement key definitions by category
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1. Price definitions and types 2. Value definition, health outcomes value (what are we
valuing) 3. Evidence process 4. Driving health authority agencies
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Pharmaceutical prices are defined at different value added levels, not all are public
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Price type Specification Components Example Index
Price to Public(PP) Price of pharmacy or hospital to patient
WHP + tax 126 (incl 7.5% VAT)
Wholesaler Price (WHP)
Price of wholesaler to pharmacist or hospital
LEFP + wholesaler margin
107
List Ex Factory Price (LEFP)
Price of manufacturer or importer to wholesaler
Ex Factory Price 100
Transfer –or/supply price FOB CIF
Export price from manufacturer to affiliate or 3rd party importer - Free on Board - Cost Insurance and Freight included
Price Seller delivers to ship designated by buyer Selling price included insurance cost & freight
60
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Example, Speziaitlätenliste Switzerland
15.06.15 24 ©WHP, [email protected]
Pricing relevant concepts and key definitions Value evidence
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1. “Value based pricing”: pricing based on value evidence, which can be health-economics /cost-effectiveness, HTA, willingness to pay
2. Health-economics value: value evidence based classical health-economics studies, eg. on Cost-effectiveness (CEA), Cost-Minimization (CMA), Cost-Utility (CUA), Cost-Benefits (CBA), Risk-Benefit (RBA) Budget (BI) impact assessments
3. Health Technology: EuNeTHA 2011 : a health technology is ‘any [health] intervention that may be used to promote health, prevent, diagnose or treat disease, or for rehabilitation or long-term care. This includes pharmaceuticals, devices, procedures and organizational systems used in health care’
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HTA definition and aims: a multi-disciplinary approach, evidence, process
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4. HTA: Health Technology Assessment is a multidisciplinary process that summarises information about the medical, social, economic and ethical issues related to the use* of a health technology in a systematic, transparent, unbiased, robust manner The aim of HTA is to inform the formulation of safe, effective, health policies that are patient focused and seek to achieve best value. Despite its policy goals, HTA must always be firmly rooted in research and the scientific method.
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Pricing relevant concepts and key definitions Evidence process
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4. HTA (contd), Health Technology Assessment types: a) micro-level” HTA aimed at appraisal of individual technologies, or groups of related technologies b)“micro-level” HTA aimed at developing clinical practice guidelines or the way in which individual technologies are combined within a delivery system to manage patients efficiently c)“macro-level” HTA which is about the efficiency of the organizational systems or architecture of the health care system e.g. Health Technology Assessment by itself
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Pricing relevant concepts and key definitions Value, outcomes
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5. Quality adjusted life year (QALY): A year of life adjusted for its quality or its value. A year in perfect health is considered equal to 1.0 QALY. The value of a year in ill health would be discounted. For example, a year bedridden might have a value equal to 0.5 QALY 6. Value, health-outcomes: “changes in individuals attributable to the care they received” (Avedis Donabedian). Objective and subjective. Objective: The 5 Ds Subjective: PROs, patient reported outcomes (e.g. health-rel. QOL) ©WHP, [email protected]
The cost utility (cost/QALY) analysis allows efficiency comparison across indications
15.06.15 29
§ Cost-utility analysis: expressed as €/QALY § Measured using a
constructed “index” § Quality Adjusted Life
Year: QALY
Prof. George Teeling-Smith
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Pricing relevant concepts and key definitions Value, outcomes
15.06.15 ©WHP 30
7. Risk- Sharing: In many countries government / health authorities allow shared risk P&R agreements in order to allow an earlier or a deal closure at all, because there is interest for access to the new technology. There are several types of P&R risk-sharing, key categories are: • Product performance (health outcomes or economics
driven) • Population caps driven • Financial caps driven The KSF for a well working shared-risk agreement is the definition and mutual agreement of key measurable shared-risk variable.
Pricing relevant concepts and key definitions Value, outcomes
15.06.15 31
8.Outcome measures (PCPI): There are a variety of types of outcome measures such as health or functional status, clinical measurements, adverse outcomes and complications, morbidity and mortality, patient-reported outcomes, patient experience with care, and others. Patient outcomes can be characterized in the following ways: clinical endpoints (ie, laboratory values, morbidity, mortality); functional status; general well-being; and satisfaction with medical care. Some represent an end result such as mortality or function; others are considered intermediate outcomes, surrogates (eg, physiological or biochemical values such as, HB, blood pressure or LDL cholesterol) that precede and may lead to a longer-range end result outcome.
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ICER: Value evidence, who said there is only one way?
15.06.15 32 ©WHP, [email protected]
Pricing relevant concepts and key definitions Country specific concepts with global influence
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• Relative effectiveness, potentially to be applied at a EU level
• RWE: Real World Evidence (Observational evidence) • SMR: Service Medical Rendu, ASMR: Amelioriation due
Service Medical Rendu (HAS), 5 classe, new ITR: Index Therapeutique Relatif (HAS)
• WZW: Wirksamkeit, Zweckmässigkeit, Wirtschaftlichkeit (BAG, Switzerland)
• Early Benefits Assessment: Cost-Benefits (IQWIG, Germany) • NICE Cost-effectiveness (UK, Scottland, Wales)
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Pricing relevant concepts and key definitions Key agencies driving global Pricing & Reimbursement
15.06.15 34 ©WHP, [email protected]
Environment dynamics: Economic pressure and budget squeeze
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Cost-effectiveness Studies comparing Interventiona A vs B are not enough…
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P&R drug evaluation policy setting anddynamics in Europe driven by others
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HTA Cost/QALY Differential
Regional access
MoH, MoSA, PBAC - HTA - Capitations - Shared-risk - Limitatios - IRP - Vol. dependent prime - Minister involvement
MoH, Iintermmin Comm ANVISA Private Market - Local patent - Clin superiority - Econ superiority - IRP Reimbursed - HTA - Vol. dependent prime - Minister involvement
MoH, PMPRB - HTA - Categorization - Breakthrough - Major Innovation - Minor Innovation - No innovation - IRP
Country Reference Prices
Country Reference Prices
Country Reference Prices
Sit. Ctry Reference Prices Loc.Inv.
Reg. access
Sit. Ctry Reference Prices, Variable
All
HTA HTA Cost/QALY Regional access
Pol.Scientific Added Value
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IRP (Intl reference pricing) use and nbr is increasing
15.06.15 38
= low price countries = most referenced countries
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Key factors driving the Pricing & Reimbursement healthcare environment
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1. Budget deficit /Economic austerity measures
2. Increasing number of most expensive patients (chronic patients)
3. Aim at patient access broadening (Brasil, China, Russia)
4. Healthcare -/pharmaceutical growth rate
5. Relative effectiveness- /HTA evaluations
6. Cost containment measures
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Cost Containment measures influence strongly reimbursed price setting and approval
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• Delay of access to new technologies • Reference product policies • HTA- Health-economics abuse • Increasing density of control mechanisms
- Reference pricing /geographic, therapeutic - Price-volume/cap agreements - Shared-risk agreements - Prescription control
• Generics incentive
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P&R/Drug evaluation and price setting criteria under constant change
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Country Decisive criteria
Negotiation Needs
Perspective P& R Decision
Sweden Back to Cost-effectiveness, cost-utility evidence, social costs included
National and counties Societal National: max reimbursable price, Counties: afford. price
UK Cost p/QALY, change of thresholds, value based pricing, PPRS
(NICE) Counties Payer, direct cost
National, Counties
Germany 1. Free first year, submission of AMNOG dossier after 3 monts
2. CBA/RBA In change
National GBA, Sick-funds Payer, direct costs
Over 100 sick-funds
France Innovation value replacement of ASMR by ITR (Index Therapeutique Relatif), HTA +Intl Reference pricing
(CT) CEPS
Payers National
Italy Innovation value, HTA based Intl Reference pricing
National AIFA Regions
Direct costs National, Regional
Spain Ref. pricing, HTA National, Regions Direct costs National, Regional
Greece Intl Ref. pricing for price, Reimb based on HTA, Therap Ref. Pricing
National Price National
Switzerland WZW, change towards HTA based National, Insurances Direct costs, (societal) National
Netherlands Scientific added value , CEA National Societal National
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Brasil: P&R innovation and cost-effectiveness driven
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Brasil Pricing Reimbursement Access/ Volume
Funding/ Spending
Type Centrally controlled Health-Economics based
2 markets: 1) Private market 60 Mio
people, health-insurances 2) SUS, public
reimbursement
Centrally and de-centrally controlled in states and hospitals
Decentralized 23 states
Policy Class 1: premium vs ref product, lowest ref country Class 2: no premium Class 1, 3 criteria: local patent, clinical sup, economic sup
1) Private market: negotiated inclusion with industries, health-insurance companies, etc…
2) SUS, negotiation for inclusion in national reimb. list
Entity CMED ANVISA ANVISA ANVISA
Cost Containment/ Control
Price cuts Therapeutic ref pricing Intl reference pricing Pharmaco-economics
Positive lists Therapeutic ref pricing Pharmaco-economics
States formularies Hospital formularies
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Controlled market, evaluation systems in use can be reduced to 4 fundamental systems
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1. Value based pricing (clinical, economics, HTA- based): CEA, CUA, CMA, CBA, CCA Swe, UK, NL, Ger, Br, Pol
2. Innovation value (clinical, economics, HTA based) e.g. Fr: SMR, ASMR 1-3 (innovative)-5 (no innovation)
- Fra, Ita, Bel, Bra, Hun 3. Therapeutic reference pricing (almost all) 4. Geographic reference pricing (IRP) (almost all) 5. Combination of above
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4 elements to consider for optimal target price
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Pharmaceutical Price
Socially accessible
Medical - Scientifically sustainable
Politically acceptable
Financially sound
Pharma Industry
Health-Authorities
Ministry of Social Affairs Patients
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Value based pricing principles- mainly address the question of cost-savings
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§ Step 1: Define accepted reference products and the cost of that alternative (i.e., the reference value).
§ Step 2: Identify all factors -- or value drivers -- that differentiate the product from the competitive alternative and determine the value to the customer of these differentiating factors.
§ Step 3: Sum the reference value and the positive and
negative differentiation values to determine the full economic value.
§ Step 4: Determine the selling price, recognizing that
the product must usually be priced below full economic value as an incentive to purchase.
Economic Value Estimation
Cost of competitive alternative
Economic value to customer of unique benefits
Negative Differentiation Value
Positive Differentiation Value
Competitive Reference Value
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Acceptable price needs ZOPA: value at which seller and buyer can agree
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Buyer Target Price
$ 36.-
Seller Target Price
ZOPA
Seller reservation Price
$ 42.-
Buyer reservation Price
• Reservation price = price at which deal or walk away is the same • HBS copyright
$ 40.- $ 38.-
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Harvard Negotiation concept- by Vantage Partners
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1. Interests-/Agenda 2. Alternatives (BATNA) 3. Options 4. Legitimacy 5. Commitment 6. Communication 7. Relationship
Tailormade courses by WHP Management Consulting [email protected]
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Harvard 7 elements concept- by Vantage, source Vantage Partners
15.06.15 ©WHP 49 ©WHP, [email protected]
Harvard Negotiation 7 elements concept, source: Vantage Partners
15.06.15 ©WHP 50 ©WHP, [email protected]
No ZOPA, - need for innovative ways to come to a ZOPA
15.06.15 51
Buyer Target Price
$ 36.-
Seller Target Price
Seller reservation Price
$ 42.-
Buyer reservation Price
• Reservation price = price at which deal or walk away is the same • HBS copyright
$ 39.- $ 40.-
No ZOPA
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Comparative cost-minimization assessment between IV iron products in the treatment of ID/IDA
15.06.15 52 ©WHP, [email protected]
Free markets drug therapy value based pricing approach
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1. Assessment of willingness to pay by patient and or insurance
2. Conjoint measurement value assessment 3. Price sensitivity assessments 4. Market research
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Free market: Conjoint Measurement analysis
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3 key questions addressed a. How important are key attributes
to payer ? b. What profile or combination of
attributes are attractive to the payer ?
c. What is the share of preference Key steps 1. Determine number of attributes
and attribute levels 2. Determine number of profiles 3. Calculate needed sample size ©WHP, [email protected]
Break-even and price sensitivity analysis
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Step 1: Identify incremental costs
Step 2: Determine contribution margin
Step 3: Calculate volume/price trade-offs
% Breakeven Sales Change Formula:
-Δ price
(CM + Δ price)
%BE=
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USA: Pay today for better patient access tomorrow
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1. Access for additional 32 M people financed by pharmaceutical companies (Obamacare)
2. Insurance reforms 3. Comparative effectiveness assessment 4. Bundled payment pilots 5. Independent payment advisory board 6. Increased demand after 2014
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France: HTA, Reimbursement and Pricing for a new drug change of systems and application
15.06.15 58
HAS: HTA guidance
CEPS Economic Committee
for Healthcare Products
NHI Union
Ministry of Health, M. of
Social Security
LIS TING
Decision
Price
Co payment Level
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CH: New HTA proposal consider added-value categories
15.06.15 59 ©WHP, [email protected]
CEE: innovative approach for smaller countries being developed
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• Threshold for reimbursement decision varies by size of Net Budget Impact (NBI)
• NBI is calculated from full health care system perspective (i.e. accounts for and incorporates realisable cost-offsets to healthcare system and not solely pharmaceutical expenditure)
• Actual monetary ranges to be determined by local circumstances.
• Higher NBI – greater the onus to demonstrate additional therapeutic value. (hence higher threshold)
• Lower thresholds recognise the value of additional broadly equivalent products as long as they do not add substantially to budget (de-facto cost-minimisation)
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Policies to be prepared for: Value-Based BudgetingPragmatic Decision Making Framework vs Net Budget Impact
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NBI
PDM F Score
1) Added therapeutic benefit
2) Local Heatlh System prioirities
3) Reimb status in other countries
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Innovative PP policy platform innitiatives
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Association Charter and Annual Plans 2013-15 28 November 2013
Source: Dr. Mario G. Levrero
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Possible platform concept
15.06.15 ©WHP 63 ©WHP, [email protected]
Key market access capability dimensions
15.06.15 64 ©WHP, [email protected]
Summary KSFs for fast market access and optimizing pricing & reimbursement
15.06.15 65
1. Legitimacy: Assure early payer-relevant clinical and health-economic evidence /form developed and implemented
2. Reputation: gain economies of time by being a well-known leader-player
3. Knowledge: Know well your products and legitimacy = clinical and health-economic evidence and local pricing policies/system
4. Environment: Understand and participate in shaping local market access /P&R policies, dynamics and systems in place
5. Negotiation: Prepare well negotiation strategy and implement tactics
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“ You always think it’s too early, until it’s too late…”
15.06.15 66 ©WHP, [email protected]
15.06.15 67
Thank you and good luck with the treffle de 4
Ø experience
Ø simplicity
Ø flexibility
Ø speed
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Back-up
15.06.15 ©WHP 68
Use of IRP is increasing
15.06.15 69
= low price countries = most referenced countries ©WHP, [email protected]
AMNOG: Governance clinical added-value orientated
15.06.15 70 ©WHP, [email protected]
UK: Cost utility, value added drivn
15.06.15 71 ©WHP, [email protected]
Germany: clinical value driven
15.06.15 72 ©WHP, [email protected]
France: SMR and ASMR are the basis forreimbursed price approval
15.06.15 73
ASMR I. Major II. Important III. Moderate IV. Minimal V. No Added benefit
SMR I. Importante II. autres
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France: more HTA orientated
15.06.15 74 ©WHP, [email protected]
Value of innovation is mostly underestimated
15.06.15 75
Cost of competitive alternative
Economic value to customer of unique benefits
Differentiation
Value
Competitive Reference
Value
Cost offset or HTA based value
Process value: o New standard of care Product value o Need: local unmet needs o Usefulness: efficiency real life o Quality: improved care
ü Efficacy ü Safety ü Cost-effectiveness ü Direct therapy costs o Total direct costs o Indirect costs (excl. Sweden)
Value of addressing unmet need Value of innovation (static, dynamic)
In the case an innovative drug therapy- what added values are mostly not recognized ?
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