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Dávid Dankó, PhD, MSc Corvinus University of Budapest Institute of Management david.danko at uni-corvinus.hu Assessing the value of medicines in middle-income.

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Presentation on theme: "Dávid Dankó, PhD, MSc Corvinus University of Budapest Institute of Management david.danko at uni-corvinus.hu Assessing the value of medicines in middle-income."— Presentation transcript:

1 Dávid Dankó, PhD, MSc Corvinus University of Budapest Institute of Management david.danko at uni-corvinus.hu Assessing the value of medicines in middle-income countries ZF PHARMA SUMMIT 2012, Buchares, 24 September 2012

2 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (2) For the sustainability of a reimbursement system, proactive and consistent policies are needed in innovative and generic sub-markets Ensure easy and quick access to new generic medicines Ensure sustainable generic price decrease and foster generic substitution Eliminate inefficiencies in expenditure by identifying all sustainable cost saving potentials Admit new value-added therapies (active substances) into the formulary Apply value-based schemes to guarantee the optimal allocation of resources Treat high-incidence diseases along a cost- minimisation approach Enable the treatment of special, ‘complicated’ or rare conditions Revise effectiveness based on real-world data and restrict the use of products with no added therapeutic value COMPETITIVE (genericised) MARKETS INNOVATIVE (patent-protected) MARKETS RECYCLE 1 2 3 4 5 6 THERAPIES FOR MASS DISEASES NICHE THERAPIES RECYCLE Source: Dankó, D. – Molnár, M.P. (2012, ed.): Handbook of Pharmaceutical Reimbursement. Medicina (in press)

3 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (3) Pharmaceutical innovation: underlying dilemmas in the early 21st century Therapeutic value Provides progress in treatment Does not provide progress in treatment Chemical structure New Already known 143 (10%) 201 (14%) 295 (18%) 821 (56%) S OURCE : B ARRAL, P.E. [2004]: 28 ans de résultats de la recherche pharmaceutique dans le monde 1975-2002. IRDES, Paris Innovation content of new active substances introduced between 1975 and 2002 Real therapeutic breakthrough has become extremely rare Innovation seems to be biased towards „sellable” therapy areas, while other areas are largely neglected BUT policy backlashes against some forms of innovation More and more new substances cause disappointment in real-life settings The business model of the pharma industry is undergoing a slow but thorough transformation

4 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (4) Health technology assessment: assessing the value of health technologies Health technology assessment (HTA) covers all methods for  the systematic evaluation of the comparative value of pharmaceutical products and other health technologies  linked to pricing & reimbursement decisions by public and private payers  preceding to admission to the reimbursement formulary and during formulary management.

5 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (5) Three main paradigms for health technology assessment (HTA) 1 ECONOMIC EVALUATION 2 QUALITATIVE ASSESSMENT 3 BALANCED ASSESSMENT  Based on pharmacoeconomics  Strict quantitative methods applied by dedicated HTA agency  Attempt to arrive at two economic indicators: ICER, budget impact  Cost-effectiveness linked to explicit or implicit threshold  Supported by structured review  Similarity with regulatory approaches  Mainly qualitative methodologies based on collective decision-making  No attempt to arrive at ICER: scoring is often used, classification is a priority  Consideration of non-financial aspects & broader societal impact  Synergies between economic evaluation and qualitative assessment  Mainly collective decision-making, which is retraceable and publicly accessible  Cost-effectiveness is one input to a classification /scoring algorithm  Wide consideration of non-financial aspects & broader societal impact UKKSPLHU FIJCHCANAUSS TW

6 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (6) Cost-effectiveness as the cornerstone of economic evaluation Cost-effectiveness means that  the new drug delivers larger health benefit at a lower cost or at the same cost (‘dominant case’: therapies ‘B’ and ‘C’ compared to therapy‘A’),  the new drug costs more than the comparator but the incremental health benefit is more than the incremental costs incurred (therapy ‘D’ compared to therapy ‘A’),  the new drug delivers lower health benefit compared to the comparator, but the loss in health benefit is lower than the decrease in costs (not preferred, therapy ‘K’ compared to therapy ‘A’). Cost of therapy (c) Health gain (u)

7 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (7) Economic evaluation – is it really able to capture value? Methodology overload Pseudo-objectivity Lack of pragmatism, mismatch with higher-level decision-makers’ style Perverted incentives, pricing effect Costly and requires capabilities which are non-existent in MIC Consultancy business PUBLIC BACKLASH & SHIFT AWAY FROM ONE-SIDED ECONOMIC EVALUATION

8 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (8) Overview of qualitative value assessment criteria used in current international practice Different systems weigh elements differently, and no system covers all elements. Focus is sometimes missing. Assessment criteria used in different countries may cover similar concepts under different terminology. S OURCE : OWN COMPILATION, J ASMINE P WU (T AIWAN ), J EREMY L IM (S INGAPORE )

9 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (9) Pragmatic framework for a redundancy-free, balanced system Therapeutic value added Budget impact Explicit local policy priorities Cost- effectiveness Szöveg Unmet need (urgency) Therapeutic value added Higher effectiveness (degree of response) Stronger adherence to treatment More favourable side effect profile  Cost-effectiveness is necessary but not sufficient for drug reimbursement  Therapeutic value added is measured along 4 factors  Health policy priorities help decide between therapy areas S OURCE : OWN COMPILATION

10 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (10) Institutional background in middle-income countries Several payers, complex decision- making processes Intuitive, rather than analytical, decision-makers at political levels Budget impact focus, emphasis on financial aspects Questions around the practical applicability of economic evaluation CAPABILITY GAP, „institutional cost-effiency” Rational free-riding: Peering on selected international assessment Simplified local evaluation: Very focused, pragmatic local assessment Regional shared service centres for value assessment?

11 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (11) Overview of other strategic variables in middle-income countries PARADIGM RESOURCE LEVEL SCOPE PROCESS AND ORGANIZATION Economic evaluation Heavy model Only pharmaceuticals Independent Drug Committee and HTA Institute Qualitative assessment Light model Pharmaceuticals, diagnostics and medical devices Separate department within sick fund (Health Insurance House) Balanced assessment Ultra-light model All health technologies, incl. public health programmes Separate department within Ministry of Health PERSPECTIVE Societal perspective Patient perspective Payer perspective with societal considerations A B C D E

12 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (12) Blueprint process for reimbursement decision-making in middle-income countries Technical inspection of dossier Simplified economic evaluation Qualitative drug assessment First consultation with the manufacturer, discussion of cost- or risk-sharing proposal Drug Committee opinion on cost-effectiveness Drug Committee decision on reimbursability Second consultation with the manufacturer, renegotiation of cost- or risk-sharing proposal Publication of decision, notification of the manufacturer and the payer Signature of cost- or risk-sharing agreement Listing (adoption to the formulary) HTA INSTITUTE DRUG COMMITTEE PAYER Balanced assessment

13 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (13) Important procedural requirements for a balanced drug assessment system Standardized retraceable decision-making processes with clear milestones and deadlines Pre-defined decision criteria, publicly accessible, intelligible (plain language) individual opinions and collective decisions Balanced composition and properly designed voting mechanisms of the Drug Committee Full disclosure of eventual conflicting interests Individual financial independency of participating experts (remuneration based on agency / ‚national bank model’)

14 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (14) Recommended strategic options for Romania PARADIGM RESOURCE LEVEL SCOPE ORGANIZATION PERSPECTIVE A B C D E Only pharmaceuticals Independent Drug Committee and HTA institute Payer perspective with societal considerations Ultra-light model Balanced assessment HTA for pharmaceuticals carries considerable advantages over other health technologies as methodologies are widely available, and interests and incentives are easier to identify. Independent Drug Committee and HTA institute can best support retraceable, publicly accessible and intelligible decision-making based on collective reason. As the goal of HTA is to support reimbursement decisions taken by the payer, the payer’s perspective has to be used, complemented by the analysis of wider societal impact. As a country with limited financial resources, Romania cannot realistically implement a heavy model, while the light model may have higher cost than benefits. Therefore an ultra-light model may be a rational first step. As negative case studies show, HTA implementation based on balanced assessment offers a one-time historic opportunity to bypass practical problems with economic evaluation and the resulting disappointment.

15 © Dávid Dankó Assessing the value of medicines in middle-income countries Bucharest, 24 September 2012 (15) Some high-level conclusions There is considerable variation in HTA systems all around the world, with tendencies toward balanced assessment frameworks. Economic evaluation has challenges in middle-income countries. Following the track which Poland and Hungary has followed in the past few years is not necessarily helpful. Both the framework and the process are crucial.


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