Market Access: Insights from the OECD
Leela Barham talks to Valrie Paris of the OECDs Health Division about how policymakers and pharma firms can achieve better value for money
At a time of considerable financial challenge, options for policy makers to achieve better value for money across the entire health system are much needed. In late 2009, the OECD published options for policy makers, including ensuring efficiency in pharmaceutical expenditure.
Despite differences across national health systems, cultures, and the myriad policies affecting pricing and reimbursement, Valrie Paris, from the Health Division of the OECD, says that there are some options that should be explored. Her pharmaceutical policy checklist includes:
- Obtaining value for money while promoting future innovation by considering relative cost-effectiveness in pricing and purchasing decisions, while ensuring that rewards to innovation are consistent with the value of benefits offered;
- Seeking opportunities for establishing price-volume agreements or confidential rebates when value-based unit prices cannot be established (due to risk of parallel trade, for example);
- Exploring the potential for risk-sharing arrangements to reduce the financial risk presented by new medicines when information on costs and effects is insufficient;
- Encouraging generic substitution and price competition in the off-patent market;
- Creating incentives for physicians, pharmacists and patients to promote the appropriate prescribing, dispensing and use of medicines, recognizing that expenditure includes volume/mix as well as price components;
- Considering whether there are opportunities for efficiencies in the distribution chain;
- Ensuring that overall healthcare spending efficiency is not compromised by efforts to improve efficiency of pharmaceutical expenditure.
HTAs and cost effectiveness
In particular, Paris highlights opportunities for payers to learn about cost effectiveness and health technology assessments (HTA) via the various networks that are now at work, particularly in Europe.
There are various initiatives at the European level, such as EUnetHTA, Paris says. It is a good thing to share knowledge and methods [on HTA and cost effectiveness]. Some elements can be standardized because there are common elements in undertaking such analysis. There could be more tools to help countries undertake cost effectiveness analysis.
However, Paris also stresses that countries need to enter their own parameters. They should know their own costs. And not all countries will be able to undertake such analysis. Some smaller countries have limited capacity and resources to undertake their own cost effectiveness analysis. There could be more opportunities to adapt analysis to an individual country setting.
But there may be barriers to such standardization, particularly the idea she has of a tool that would set out the structure of the analysis, and allow countries to enter in their own parameters.
She notes that whilst standardization of analysis could be cheaper for companies, which would then not need to undertake multiple, slightly different studies and submissions across Europe, some companies may not be comfortable with such transparency. Nor, she says, would payers.
They wont necessarily want transparency, Paris says. Confidential negotiations could, after all, give them lower prices. But its not really an efficient situation.
Various approaches to cost effectiveness
Paris also notes that while some of the analysis can be standardized (for example setting out the structure of the analysis by identifying which costs and benefits to incorporate, such as potential hospital costs that could be saved), there is not yet a common view across OECD countries on the perspective for analysis. Nor for the benefits, although Quality Adjusted Life Years (QALYs) are common as the measure of benefit.
There are differences, for example, in terms of what surrogate markers are acceptable, Paris explains. Some countries are less willing to accept them, which can translate into an unwillingness to allow a high price when only such surrogates are available.
Thats not the only major difference, though. Paris sees big differences in the acceptance of uncertainty by payers across the OECD.
Sweden, she says, takes a much wider perspective. They consider the wider view of society. Others take the payer perspective. [It is] not a matter of which option is better than another, but rather both perspectives have value and are legitimate.
The need for flexibility
There is also a trend towards flexibility, which is beginning to be seen in terms of determining what represents value for money via the cost effectiveness threshold.
Again, Sweden stands out. Sweden has been clear that for some drugs there may be a higher threshold perhaps because they treat an orphan disease, Paris, says, or because they are for end of life. If they didnt have this flexibility, then there would never be an agreement between the payer and the companies. Its an important principle of solidarity, not to exclude certain patients.
Paris also cites the recent changes in the guidance for the National Institute for Health and Clinical Excellence (NICE) in England and Wales, which allows some greater flexibility on benefits for end of life treatments. Here, she notes, Its just not an easy question. There must be a threshold.
Price-volume agreements
A key option payers can consider to improve value for money, according to Paris, is price-volume agreements (PVAs). She cites France, in particular, where PVAs can be focused on the risk of misuse. This is different to risk-sharing schemes. This is helpful where there is a product where there is evidence of benefits for particular subgroups of patients.
The company and the payer can agree how many patients they expect should be on the product, she continues. A PVA will encourage use in the most appropriate groups.
These types of schemes, Paris says, are both justified and legitimate for payers to use. She also doesnt see a downside to such schemes, as long as the data is there to start from, a lesson she believes payers have now understood. France, for example, now holds its own data so it can assess utilization.
Risk-sharing schemes
Although Paris admits that there is little known about risk-sharing schemes, she thinks that they look promising. Its a good way of approaching things when there is high uncertainty yet access is needed because there is a good chance of high benefits.
She laments the lack of serious and meaningful assessment of schemes to date. However, its an area where she hopes the OECD will focus in future to help fill this gap.