1. Portugal Economic Evaluation Applied to Decision Making Isaura Vieira INFARMED, I.P. – National Authority for Medicines and Health Products I Pan-American Seminar on Economic Regulation of Pharmaceuticals Brasília, 18 th March 2009

2. PORTUGAL 10 Millions inhabitants National Health Service that is universal, comprehensive and free of charge covers 7 Millions inhabitants Other Health Systems (Civil Servants, and other) responsible for 3 millions All the inhabitants have the right to health to be delivered through NHS

3. Source OECD HEALTH DATA 2008, Dez. 08 Total health expenditure - % gross domestic product

4. Total pharmaceutical expenditure - % of total health 2006 Source: OECD HEALTH DATA 2008, Dez. 08

5. For being on the market medicines need an authorisation from Infarmed Hospitals NHS or third payer is responsible for all the expenses with in-patient consumed medicines Pharmacies NHS or third payer is responsible for all or part of the expenses with consumed medicines on the purchasing act the consumer does not pay or pay only a part of medicine’s price The Reimbursement System

6. Prescription only medicines The level of co-payment depends on medicines therapeutic classification For example: Insulins - 100% Antiepileptics – 95% Anti-hypertensives and Antibiotics - 69% Corticosteroids and Analgesics - 37% Medicines subject to reimbursement The Reimbursement System

7. % of retail price paid by state/third payer GeneralLowRetiring Pensions + 5 69 37 15 - Transitory level - no more than 2 years Additional data required after reimbursement is granted Transitoriness of reimbursement status can be used independently of the level of co-payment 95 + 15 100 – only for insulin, imunomodulators, and pituitary and hypothalamic hormones and analogues Level of co-payment or co-payment rate

9. Main Challenges Limited economic growth Increasing costs of R&D Innovation increasing costs Ageing society Society expectations Changes on the disease patterns - more chronic diseases

10. Policies Developed Price control /price negotiations Tendering procedures Co-payments Reference pricing Generics promotion Development of information instruments to support doctors decision Educational campaigns on rational use of medicines Industry payback associated to a level of NHS growth Agreements on budgets and prices with companies for drug reimbursement Relative effectiveness and cost-effectiveness evaluation for reimbursement decision – ambulatory and hospital

11. Generic Medicines Market Share

12. Reference Price System For medicines with generics marketed the retail price still exist but the user is responsible for the difference between retail price and reference price Reimbursement reference price system based on higher generic price marketed

13. Agreements on budgets and prices with companies for drug reimbursement Medicines with recognized therapeutic added valued but with some doubts or need to make some restrictions, like a specific indication or group of patients Conditions: limited on time (2 years with possibility for renewal) presentation of extra information on relative effectiveness or cost- effectiveness reduction on reimbursement or prices of other medicines already reimbursed reduction on NHS price for the drug under evaluation definition of a maximum budget for the drug under evaluation, once sales exceeded the budget, the MaH should return the extra value.

14. Relative effectiveness and cost-effectiveness evaluation for reimbursement decision – ambulatory and hospital Instrument to better identify and value the real innovative medicines Since 1998 for ambulatory care reimbursement decisions Since 2007 for hospital medicines funding decisions High level of growth rate Decisions made by each hospital – need for harmonization Iincrease of new medicines approved for hospital use – need for increase of rational use

15. 15 Need to: promote the development of new tools to provide suport on decision making process - Economic Evaluation Studies on Medicines creat guidelines to implement good practices on the execution and evaluation od Economic Evaluation Studies of Medicines - Guidelines Relative effectiveness and cost-effectiveness evaluation for reimbursement decision – ambulatory and hospital

16. Relative effectiveness /added therapeutic value Economic Evaluation Evidence based report to suport the decision Relative effectiveness and cost-effectiveness evaluation for reimbursement decision – ambulatory and hospital

17. Always: New Chemical Entities (NCE) for a well defined therapeutical need. If required: New medicines with added therapeutic value, related to other medicines used for the same indications Mandatory for: The Authorities and the Economic Assessment Field of Application

18. Time for Study submission: Before Reimbursement Approval Submission as part of reimbursement dossier (very common) When INFARMED ask for it (in this situations firms take no less then 6 months to have it done - in the meantime the process stops) After Reimbursement Approval In some well defined situations MA holder can celebrate an agreament with Infarmed in order to get fast access to reimbursement market, and has 12 to 24 months to submit additional information (health economic study; new clinical trials, epidemiological data etc) The Authorities and the Economic Assessment Field of Application

19. Main problems Population under study Dificult to have good evidence to suport added therapeutical value Cost identification and measuring and valuing costs Evaluation of medicines for rare deaseases Lack of cost-effectiveness evidence for sub-groups of population or for restricted indications Budget Impact – data on prevalence and incidence and need to imclude all the alternatives used for the same indication The Authorities and the Economic Assessment Field of Application

20. Population under study Is not completely described in its main characteristics, such as prevalence, diagnosis, severity of disease, age group,...; Does not correspond to the potential users of the treatment under analysis; The populations used in the RCT carried out in the United States, Northern Europe and other geographic areas do not coincide with the prevalence, incidence, and natural disease progression of the potential users. Main problems The Authorities and the Economic Assessment Field of Application

21. Cost identification The way relevant costs are normally identified and described is not very accurate nor complete: All costs should be reported separately; The classification of costs as: direct or indirect should be clearly stated, as sometimes non medical direct costs are reported as indirect costs. Main problems The Authorities and the Economic Assessment Field of Application

22. Measuring and valuing costs There is no separate nor detailed information on the resources used (in physical units) and the form in which they have been valued (unit prices or costs):  Measurement of resources used is often obtained through panels of experts who may not be representative of regular clinical practice; Main problems The Authorities and the Economic Assessment Field of Application

23. The utilisation of HTA techniques as an integrated instrument to support the assessment of the reimbursement processes, led to: - acceptance of reimbursement conditions for some new medicines; - decrease in the price of some new medicines; - refusal of reimbursement of some medicines. The submitted Economic Drug Assessment studies allowed the reimbursement of cost-effective medicines, on the basis of a better knowledge of the medicines’ properties and its effect in the population that is supposed to use them. Results The Authorities and the Economic Assessment Field of Application

24. Time taken to assess the studies led, in some products to delays in the market assess; At the present MA holders seek to prove on scientific basis the add value of new products; The costs involved in the production/adaptation of economic evaluation studies keep opportunistic products out of the premium price market; Results The Authorities and the Economic Assessment Field of Application

25. Thank you for your attention isaura.vieira@infarmed.pt