roadmap to optimal drug access (neil palmer, pdci) june 14, 2017
TRANSCRIPT
Roadmap to Optimal Drug Access
Approaches to Pricing and Access: International Comparisons&
Innovative Therapies:Orphan drugs, Precision Medicines, & Cellular Therapeutics
W. Neil PalmerDelta Hotel Toronto
June 14, 2017
June 2017 1
Approaches to Pricing and Access:International Comparisons
June 2017 2
HC Proposal: Expanded International Reference PricingCriteria for selecting Countries
Proposed Countries
Three main criteria have been used to select the countries: 1. Consumer protection: whether the country has national pricing containment
measures in place to protect consumers from high drug prices; 2. Economic Standing: whether the country has a similar economic standing to
Canada, as measured by GDP per capita; and 3. Pharmaceutical market characteristics: whether the country has similar
market characteristics to Canada, such as population, consumption, revenues and market entry of new products.
Source: Health Canada “Protecting Canadians from Excessive Drug Prices: Consulting on Proposed Amendments to the Patented Medicines Regulations”, Ottawa May 2017
June 2017 3
What is the impact of International Reference Pricing?
• Is there evidence that lower prices delay product introduction in “low price” countries?
June 2017 4
Health Canada: Pricing & Access to Medicines
June 2017 5
Except for New Medicines..Foreign Prices are already similar or higher than Canada
New med prices the same or higher in most other countries including Sweden & UK
June 2017 6
International (External) Reference Pricing
Pharmaceutical Reference Pricing in the U.S. Delusion or a soon-‐to-‐be Reality? April 2016 Ilkka Anhava Ling Chen Huiyan Jin Emil Nedev David Spellberg.
June 2017 7
Launch Sequencing is well established….
June 2017 8
Sample Launch Sequence Analysis
June 2017 9
PMPRB: Less Reliance on International Prices?
• PMPRB: “Given that it is standard industry practice worldwide to insist that public prices not reflect discounts and rebates, should the PMPRB generally place less weight on international public list prices when determining the non-‐excessive price ceiling for a drug?”
• International price referencing began in Canada in 1987 (PMPRB C-‐22 amendments to Patent Act)
• Listing agreements and patient access schemes make international price comparisons challenging – but these exist because of international price
referencing– transparent pricing would result in a downward
spiral of prices– even if prices are identical at launch, prices will
inevitably move apart because of exchange rates
June 2017 10
Mechanisms for Price Setting / Reimbursement
Canada France Germany Italy Sweden Switz. UK USA
Additional benefit(level of improvement) ü ü ü ü
Clinical Effectiveness ü ü ü ü ü ü ü üInternal referencing(cost comparisons to similar drugs, generics, biosimilars)
ü ü ü ü ü ü ü *
External referencing(international price comparisons)
ü ü * ü ü
Cost effectiveness(e.g., $/QALY) ü ü ü ü ü ü
Affordability(budget impact) ü ü ü ü ü ü ü *Risk Sharing(product listing agreements)
ü ü * ü ü * ü ü
Regional decisionmaking ü ü ü ü ü ü *
Tiered Formularies ü
June 2017 11
Why are Canadian Prices Relatively High?(compared to most other OECD countries)
• High health expenditures as % of GDP lead to higher drug prices?
• Health care is a priority• In theory, countries with relatively high health expenditure costs as a
proportion of their economy (% of GDP) may generate sufficient demand that support prices that are also relatively higher than in countries where health care is less of an economic priority
• Hypothesis: Countries with relatively high health care expenditures as % of GDP should have higher prices than countries that focus less of their economy on health– Exclude countries with higher prices than Canada (USA and Mexico)
June 2017 12
Foreign-‐to-‐Canadian Price Ratios vs. Health Expenditure as % of GDP(excluding prescription drugs)
Source: PMPRB 2016 Annual Report, OECD.Stat
R² = 0.56228
0
0.2
0.4
0.6
0.8
1
1.2
4.5% 5.5% 6.5% 7.5% 8.5% 9.5% 10.5% 11.5%
Foreign-‐to-‐Canadian Price Ra
tio (2
015)
Health Expenditure as a Percentage of GDP (2015)
Linear regression analysis suggests that there is a moderate relationship between drug prices and health expenditures as % GDP in OECD countries
June 2017 13
Reservation Prices
• Reservation (or reserve) price is a term referring to a limit on the price of a good or a service.– On the demand side, it is the highest price that a buyer is willing to pay; – On the supply side, it is the lowest price at which a seller is willing to sell a
good or service.
Reservation Price
Buyer
Reservation Price
SupplierReservation Price
Supplier
Reservation Price
Buyer
Negotiation Possible Negotiation Not Possible
Price è
June 2017 14
Germany AMNOG Process
• Multi-‐stage , multi-‐agency process that can take up to 15 months
Source: Markus Jahn, Novartis Pharma GmbH, Pharma Pricing & Market Access Outlook, March 2012
June 2017 15
Top 10 Canadian Drugs* without NZ Coverage
Brand Name Generic Name Therapeutic Area Year Listed In Ontario
EYLEA aflibercept Wet Age-‐related Macular Degeneration 2015
ELIQUIS apixaban Prevention of stroke and systemic embolism 2013
PROLIA denosumab Osteoporosis 2012
STELARA ustekinumab Severe Plaque Psoriasis 2013
ONGLYZA saxagliptin Type 2 Diabetes 2012
TRIUMEQ dolutegravir & abacavir & lamivudine HIV 2015
INVOKANA canagliflozin Type 2 Diabetes 2015
LYRICA pregabalin Neuropathic Pain 2013
TRAJENTA linagliptin Type 2 Diabetes 2012
VYVANSE lisdexamfetamine ADHD, Eating Disorders 2011
*Of new drugs listed in Ontario from Jan. 1, 2011 to Sept. 2, 2015
June 2017 16
International Prices: Summary
• Foreign countries use a variety of mechanisms to moderate drug expenditures– Most countries negotiate rather than regulate introductory prices of new medicine– HTA, comparative effectiveness, cost effectiveness influence price negotiations – Some apply international price referencing but not UK, Sweden
• Germany, France may use international prices for price negotiations• Japan uses international prices for adjustment purposes only• Differences in underlying health care systems and opaque price volume
agreements make international price comparisons challenging– Low prices, fixed budgets may result in fewer drugs available
• PMPRB has an impact on prices of patented medicines although that impact may not be recognized by payers and consumers– Prices on average are below the international median– Prices on average do not increase– Shifts in exchange rates can create perception of higher prices– But PMPRB does not examine cost effectiveness or affordability
• CADTH / INESSS / pCPA directly addresses cost-‐effectiveness / affordability
June 2017 17
Innovative Therapies:Orphan drugs, Precision Medicines, & Cellular Therapeutics
June 2017 18
Evolution: Innovation & Reimbursement
Traditional Small Molecule
Generics (Bioequivalence)
InterchangeabilityTherapeutic Referencing
BiologicsLarge Molecule
BiosimilarsInterchangeability
???
Cell & Gene Therapies
Similars? ???
June 2017 19
Gene Therapy
• A set of strategies that modify the expression of an individual’s genes or that correct abnormal genes. Each strategy involves the administration of a specific DNA (or RNA).
Source: American Society of Cell & Gene Therapy http://www.asgct.org/
Source: Wikimedia Commons
June 2017 20
UniQure – Glybera® (alipogene tiparvovec)• Familial lipoprotein lipase deficiency (ultra rare condition)• Clinical development program for Glybera consisted of
– 3 non-‐controlled, prospective, open-‐label clinical trials in 27 LPLD patients.– Retrospective case note review of 17 of the 27 patients to determine the
impact of Glybera treatment on the frequency and severity of pancreatitis events (following completion of the clinical trials)
• EMA approval October 2012 – under “exceptional circumstances”– for adult patients diagnosed with
• familial lipoprotein lipase deficiency (LPLD) confirmed by genetic testing, and• suffering from severe or multiple pancreatitis attacks despite dietary fat
restrictions.• Co-‐marketed with Chiesi: treatment cost ~1M€ / patient• G-‐BA:
– May 2015 Additional benefit “not quantifiable”• To date only one patient reimbursed for treatment
with GlyberaSource: uniQure.com; Scrip
June 2017 21
STRIMVELIS for Bubble Boy Syndrome
• STRIMVELIS (autologous CD34+ cells transduced to express ADA) [GSK]– ADA-‐SCID (bubble boy syndrome)– Cost: €594 thousand for single one time (curative?) treatment
• money back guarantee– GSK has indicated that STRIMVELIS will not be profitable
• GSK considering “different models” on pricing. – Models could include staggered payments and outcomes based arrangements– Part of the Italian deal where it is currently reimbursed– Milan will serve all Euro patients. (Source: FiercePharma August 2016)
A vector carrying the correct copy of a gene. (photo courtesy of GSK)
June 2017 22
Cell Therapy
• Cell Therapy– The administration of live whole cells or maturation of a specific cell
population in a patient for the treatment of a disease.– Blood transfusions & bone marrow transplants are examples of established
cell therapiesSource: American Society of Cell & Gene Therapy http://www.asgct.org/
Ethanewadeblog: New treatments for cancer and new research
June 2017 23
Prochymal®(remestemcel-‐L, human mesenchymal stem cells for IV infusion)
• Prochymal® has received conditional approval in Japan, Canada and New Zealand (2013) for treatment of children with acute steroid refractory GVHD. – Underlying AML being treated with hematopoietic cell transplant
• It is also available in the United States under an Expanded Access Program for treatment of GVHD in children and adults.
• Conditional approval based on 2 clinical trials, including a placebo controlled RCT (N-‐28)
• Cost: estimated to be ~ > $200K USD per treatment in the US• Mesoblast acquired Prochymal from Osiris in 2013• Commercialized and reimbursed in Japan but not yet in Canada or New
Zealand • As a hospital only treatment funding / reimbursement mechanisms
unclear in some markets (hospital budgets not ready for $200K one time payment)
Source: Mesoblast.com; Scrip
June 2017 24
CAR-‐T Cell Therapy• CAR-‐T is a one time treatment – patient T-‐cells genetically re-‐engineered
to eradicate cancer cells• Novartis (leukemia), Kite (lymphoma) are the early leaders• Very promising results – but serious neurotoxicity concerns
http://labiotech.eu/car-‐t-‐therapy-‐cancer-‐review/
June 2017 25
Are current HTA methods suitable?
• Industry: current HTA methods may be unsuitable for assessing regenerative and cell therapies
• NICE (UK): Conducted a hypothetical review of a CAR-‐T treatment for leukemia
• NICE: 'Technology Appraisals framework is applicable to regenerative medicines and cell therapy technologies', but changes will be required to– methods and processes, including the discounting rate,– price and payment models, as well as varying parameters.
June 2017 26
Gene & Cell Therapy HTA / Reimbursement
• More complex / uncertain than traditional pharmaceuticals– Similarities with diagnostics and devices
• New cell & gene technologies will likely be assessed by traditional “national” HTA methods, but: – HTA methods will need to be updated / adapted – Payment / funding mechanisms may be local / regional– Procedure and fee codes may need to be established– Existing budgets may not be sufficient– Costs of ancillary care, treating adverse reactions need
consideration
• Treatment pathways will vary across jurisdictions– Treatment pathway may dictate payment / funding pathway
June 2017 27
HTA of Cell & Regenerative Treatments
• Technological breakthrough ≠ Clinical breakthrough• Clinical & cost effectiveness paramount• Hepatitis C drugs (e.g., Sovaldi) have provided HTA agencies and payers
with experience assessing “curative” technologies– 90 -‐ 100% cure rates– Open, single arm trials– One time high cost treatment, but highly cost effective (low $/QALY)– Significant affordability issues (large untreated patient population)
• Payers in many markets have mechanisms for risk sharing agreements– Pay for Performance (P4P) – Outcomes based (e.g., Velcade UK)– Financial: price / volume agreements– Alternative payment approaches for high cost “curative” treatments?
• Annuities, leasing models
June 2017 28
Responding toHealth Canada Consultation Document
June 2017 29
Consider: HC Objectives of the Regulatory Changes
1. Introduce new, economics-‐based price regulation factors that would ensure prices reflect Canada’s willingness and ability-‐to-‐pay for drugs that provide demonstrably better health outcomes;
2. Update the list of countries used for price comparison so that it is more aligned with the PMPRB’s consumer protection mandate and median OECD prices;
3. Formalize a move to a complaints-‐based system of oversight for patented generics products that are at lower risk of excessive pricing, reducing regulatory burden for patentees;
4. Set out the pricing information required of patentees to enable the PMPRB to operationalize the new pricing factors; and
5. Require patentees to provide the PMPRB with third party information related to rebates and discounts on domestic prices.
• Based on international best practices, the proposed amendments would provide the PMPRB with new regulatory tools and information to better protect Canadian consumers from excessive prices while reducing regulatory burden on patentees.
Source: Health Canada “Protecting Canadians from Excessive Drug Prices: Consulting on Proposed Amendments to the Patented Medicines Regulations”, Ottawa May 2017
June 2017 30
Consider PMPRB Regulatory Framework
Item Description Who can change/amend
Legislation: Patent Act (s 76.1, 79-‐103)
Empowers the PMPRB, outlines price review factors, penalties for excessive pricing, failing to file information
Parliament
Patented Medicines Regulations
Outlines reporting requirements & PMPRB reference countries
Governor-‐in-‐council (federal cabinet)
PMPRB Rules of Practice & Procedure Rules for conducting hearings PMPRB (but are approved
by Governor-‐in-‐council)
GuidelinesExcessive Price GuidelinesScientific Review ProceduresPMPRB Enforcement Policy
PMPRB (but must consult stakeholders)
Policies
Official PMPRB interpretations of the legislation, regulations, guidelines (these are generally published in the PMPRB Newsletter)
PMPRB
Practices Un-‐official interpretations of the legislation, regulations, guidelines PMPRB staff
June 2017 31
Consider: Federal Policy Framework for Regulations
1. Canadians are consulted2. Risk exists, government intervention is required, regulation is best
alternative3. Benefits of regulation outweigh costs4. Adverse economic effects are minimized, no unnecessary regulatory
burden5. International and intergovernmental agreements are respected6. Systems in place to manage regulatory resources effectively
Source: Guide to Making Federal Acts and Regulations: Part 3 -‐ Making Regulations, Privy Council Office http://www.pco-‐bcp.gc.ca/index.asp?lang=eng&page=information&sub=publications&doc=legislation/part3-‐eng.htm
June 2017 32
Patient Focuse.g., Patient-‐Perspective Value Framework 1.0
www.avalere.com
June 2017 33
Patients: Responding to the Consultation Document
• Remember the deadline: June 28, 2017• Comments and submissions should be patient focussed• Consider the “Federal Policy Framework for Regulations” for framing
comments – The government must justify that regulation is necessary, that alternatives are
not effective, benefits outweigh costs and the regulatory burden is reasonable• Insist on context – that commentary will be most constructive where there
is an understanding of how the regulations will be applied• Challenge underlying assumptions with facts & evidence, not conjecture• Frame concerns so that they resonate with government (and electorate)• Be constructive, and where appropriate, suggest alternatives• Acknowledge other stakeholder positions but don’t “parrot” positions of
others – add context where appropriate
June 2017 34
Thank you
June 2017 35
Biography
W. Neil PalmerPresident & Principal Consultant
PDCI Market Access [email protected]
www.pdci.ca
Neil Palmer President and Principal Consultant of PDCI Market Access Inc. (PDCI) a leading pricing and reimbursement consultancy founded in 1996. He leads a senior team of market access professionals with pricing & reimbursement engagements covering Canada, Europe, and the United States.
Prior to PDCI, Neil worked with the Canadian Patented Medicine Prices Review Board (PMPRB) where his responsibilities included policy development, overseeing the price review of patented medicines and conducting economic research. Prior to the PMPRB, he worked with the Health Division of Statistics Canada where he was responsible for economic and statistical analysis of health care costs and utilization. Neil also worked with RTI Health Solutions (Research Triangle Park, North Carolina) where he served as global vice president for pricing and reimbursement. After completing his studies at the University of Western Ontario, Neil began his career in Montreal with the research group of the Kellogg Centre for Advanced Studies in Primary Care. He has written extensively on pharmaceutical pricing and reimbursement issues and is a frequent speaker at conferences in North America and Europe.
In January 2015, Neil was appointed Adjunct Assistant Professor at the University of Southern California School of Pharmacy graduate program in Health Care Decision Analysis where he lectures on health technology assessment, pricing and market access from a global perspective.
June 2017 36