1. Legemiddeløkonomiseminar Karianne Johansen Legemiddelindustriforeningen, LMI 2. desember 2010

2. www.lmi.no Topics  Pricing of patented drugs in Norway  Experiences with risk sharing policies

3. www.lmi.no Prices compared to our reference countries

4. www.lmi.no Price changes on medicines vs. consumer price index

5. www.lmi.no International reference pricing  Do all countries in the basket have the same characteristics? –Ad-hoc cuts enforced due to i.e. financial crisis  Affordability?  Disease burden in Norway?  Fluctuations in exchange rates?  Does it reward value of the product in a correct manner?

6. www.lmi.no Proper pricing system should  Adequately reward innovation –Both pricing and reimbursement mechanism  Predictable and transparent  Allow rapid access and meet the need of all stakeholders  Focus on patient outcome and quality of care

7. www.lmi.no Pharmaceutical expenditure as a percentage of total health expenditure

8. www.lmi.no Risk sharing policies Why do we need them? - Handling of uncertainty and share risk  Reimbursement contracts – conditional reimbursement  Performance guaranties - outcome based  Financial models

9. www.lmi.no Performace based and risk sharing agreements

10. www.lmi.no Underlying models similar, but differ in reimbursement price and scheme Financial Utilization Models Outcomes Based Pricing Models Risk Based Pricing Models Price Volume Agreement: e.g. full reimbursement for first 10% of patients, reduced reimbursement for next 20% of patients, no reimbursement for all others Initial 10% of patients Next 20% of patients All others Full response Partial response No response Money back guarantee, e.g. full reimbursement for responders, reduced reimbursement for partial responders, no reimburse-ment for non- responders High Risk Moderate risk Low risk Reimbursement linked to value and level of risk (e.g. based on diagnostic test) Patient segments Tx Value

11. www.lmi.no Our viewpoints  Innovation should be rewarded –Both pricing and reimbursement mechanism  Allow rapid access and meet the need of all stakeholders  Societal value must be recognized  Silo budgeting should be avoided  Focus on patient outcome and quality of care