1. Assessment, pricing, and reimbursement of new health technologies: Innovative reimbursement models: Examples from health insurance systems in Asia
Abdulkadir Keskinaslan, MD, MBA, MPH
International Conference for Improving Use of Medicines – ICIUM 2011
Antalya,Turkey, November 17, 2011

2. Striking a Challenging Balance
Continued innovation
Appropriate use
Access to new medicines
Household & system affordability
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3. Risk-Sharing Agreement:
The underlying concept of innovative pricing and patient access schemes is value-based pricing
In an increasingly cost-sensitive environment, it is becoming more difficult for highly-priced innovative drugs to gain reimbursement
Pharma is now moving towards a value-based pricing system, opting for risk-sharing in an effort to improve equitable access to effective care
Innovative pricing and patient access schemes are arrangements which may be used on an exceptional basis for the acquisition of medicines
The schemes are intended to improve the cost-effectiveness of a medicine and therefore allow HTA bodies to recommend treatments which they would otherwise have deemed not cost-effective
Risk-Sharing Agreement:
“A contract between two parties who agree to engage in a transaction in which there are uncertainties regardless concerning its final value. Nevertheless, one party, the company, has sufficient confidence in its claims of either effectiveness or efficiency that it is ready to accept a reward or a penalty depending on the observed performance.”
Source: Akehurst,Taiwan HTA Workshop 2010; de Pouvourville, EJHE, 2006
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4. From “Price Volume” and “Money Back” to Value Based Reimbursement: Non-linear pricing
high
Price-Volume Agreement assumes that “reimbursement buckets” are filled from left to right
Money-back Guarantee assumes binary outcome: full response or failure
Is it possible to devise a scheme, where all “buckets”! Are filled simultaneously, depending on patient characteristics (e.g. unmet need, risk, benefit)? P3
Weighted Average Price
Average Price P2 P1
low S1 S2 S3
Size of Patient segment or indication
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5. Pricing models to improve access and affordability
Financial Utilization Models
Outcomes Based Pricing Models
Risk Based
Pricing Models
Initial 10% of patients
Full response
High Risk
Next 20% of patients
Partial response
Moderate risk
All others
No response
Low risk
Patient segments
Patient segments
Patient segments
Price volume agreement: e.g. full reimbursement for first 10% of patients, reduced reimbursement for next 20% of patients, no reimburse-ment for all others
Money back guarantee, e.g. full reimbursement for responders, reduced reimbursement for partial responders, no reimburse-ment for non-responders
Reimbursement linked to value and level of risk factors (e.g. based on diagnostic test)
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6. Financial Utilization Models
Lucentis (ranibizumab) for AMD – UK Per patient, response-assumed, if longer treatment required, drug free of charge
Financial Utilization Models
In 2008 NICE found Lucentis to be cost-effective for wet Age-Related Macular Degeneration (AMD) if a course of treatment did not exceed 14 injections
To ensure full patient access, Novartis agreed to pay for any injections of Lucentis that exceeded the 14 recommended by NICE
Company covers the costs of additional injections
Results
Patients received effective innovative treatment
Improved cost effectiveness for the NHS
Lucentis became established as effective treatment in the market
Source: National Institute for Health and Clinical Excellence.
Final Guidance: Ranibizumab and pegaptanib for age-related macular degeneration.
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7. Outcomes Based Pricing Models
Velcade (bortezomib) for multiple myeloma - UK Per patient, response dependent, cash refund
Outcomes Based Pricing Models
In 2006, Velcade treatment was considered ‘not cost-effective’
costs approx. £3,000 per treatment cycle (£38,000 per QALY).
Johnson & Johnson scheme proposed that treatment would be reimbursed only when effective
Full or partial response - remain on therapy and funded by NHS
minimal or no response - cease treatment and costs refunded to NHS by the company
ICER with rebate, stopping rule after 4 cycles with partial and full responders continuing therapy: £20,700/QALY
Response assessed after max of 4 treatment cycles and response was measured by tumor shrinkage
- reduction in serum M-protein levels of 50% or more
60 day claim period
Source: A Keskinaslan, ISPOR Asia, Thailand September 5-7th, 2010
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8. Outcomes Based Pricing Models
Actonel (risedronate) for osteoporosis – US Per patient, response dependent, pay for consequence
Outcomes Based Pricing Models
In 2009 Procter & Gamble and Sanofi-Aventis agreed the scheme with Health Alliance Medical Plans
A risk-sharing agreement where preventative treatment is assessed against unwanted disease outcomes
To pay for bone fractures occurring while the patient is taking Actonel.
For these patients, any health costs associated with a non-spinal fracture to be covered by the manufacturing companies (estimated to cost between $6,000 and $30,000 per fracture, depending on the fracture location).
Patients qualify if they have no-comorbidity, no prior fractures etc; and have taken Actonel for six out of the nine most recent months
Intention of the scheme:
To reduce potential treatment costs for fracture treatment for patients on Actonel
To provide an incentive to keep qualified patients on Actonel instead of switching to less-expensive generic alternatives
To keep Actonel on a lower formulary tier than competition
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Source: A Keskinaslan, ISPOR Asia, Thailand September 5-7th, 2010

9. Telbuvidine for chronic hepatitis B treatment - Australia acceptable ICER across patient segments
Risk Based
Pricing Models
Telbuvidine is indicated for the treatment of HBeAg-positive and HBeAg-negative chronic hepatitis B patients who have compensated liver disease, evidence of viral replication and active liver inflammation and who are nucleoside analogue naïve.
Telbuvidine priced at weighted average price across patient subgroups
priced at a high but acceptable incremental cost effectiveness ratio compared to lamivudine for HBeAg-positive (e-pos) patients
priced higher than lamivudine for HBeAg-negative patients based on cost-offsets due to reduced resistance rates and thus lower use of more expensive 2nd-line adefovir
Source:
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10. The underlying concept of patient access schemes is no different from innovative pricing schemes: value-based pricing
Willingness to Pay Based Pricing Models
Affordability Based Pricing Models
Discount for members
Full price
Price or free goods
reward for compliance
Partial price
Value added services
for compliant patients
No price
Patient segments
Patient segments
Loyalty Card: e.g. progressive discounted price for members, additional reward for compliant patients (4+1), value added services (free routine tests) for long term compliant patients
Patient Assistance Program, e.g.
Patients pay what they can afford, governments or private insurance companies may contribute
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11. NOA providing Glivec (imatinib) for CML - Indonesia Affordability based model, shared contribution
Novartis Oncology Access (NOA) designed to bridge the affordability gap in Indonesia
NOA offers patients to pay what they can afford, based on a financial evaluation – to bridge the affordability gap.
Co Pay Model Based on the “Cost of Living Wages” (CoL)
Patient’s financial resources do not fall under 2 X CoL after purchasing Glivec
7 tier scheme determined through assessment made by financial agency; in December, 2010: 305 patients
Multiple Stakeholders involved in setting up the program
Ministry of Health Indonesia
Indonesian Society of Hematology and Blood Transfusion
Indonesian Hematology and Internal Medicine Medical Oncology National Working Group
Indonesian Cancer Foundation, Jakarta Branch
Financial assessment by PT Survindo Putra Pratama
Novartis Indonesia
Affordability Based Pricing Models
Full price
Partial price
No price
Patient segments
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12. Lucentis (ranibizumab) for AMD – UAE Affordability based model with shared contribution
Novartis introducing MUSANDA Program, a patient access & affordability program which enables ophthalmologist to treat a segment of patients that was left with no treatment
Program helps patients with funding gap and creates a financing option for self-pay patients
It helps restoring sight and prevent blinds & visual impairment for AMD/DME patients
Program also offers discounted fees for patients at affiliated clinics and hospitals
3rd party conducts financial assessment to identify eligibility for different level of support
Affordability Based Pricing Models
Partial price for all segments
Patient Purchase
Patient segments
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13. Musanada program designed to help patients with no access
Affordability barrier
No Access
Patients wAMD & DME for MUSANADA program :
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14. Q&A

15. Examples of Estimated ICER Thresholds
Unit
Lower boundary
Upper boundary
USA
QALY
US$50,000
US$100,000
Canada
US$17,600
US$87,800
Australia
LYG
US$28,200
US$51,000 UK
US$32,000
US$48,000
Thailand
~US$2,000
~US$8,000
WHO
GDP/capita/DALY averted
<3
Australia PBAC
GDP/capita/life-year gained
1.26
2.29
UK NICE
GDP/capita/QALY
1.4
2.1
If the ICER is within a defined acceptable range (threshold) by the payer/ provider of healthcare, then there is a high likelihood that the treatment could be accepted
ICER = incremental cost-effectiveness ratio; QALY = quality-adjusted life-year; LYG = life-years gained;
GDP = gross domestic product; WHO = World Health Organization; DALY = disability adjusted life-years; NICE = National Institute for Clinical Excellence (UK); PBAC = Pharmaceutical Benefits Advisory Committee
Value in Health 2004;7:518
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