ACCES AU MEDICAMENT EFFICIENCE ET CRISE ECONOMIQUE

1. ACCES AU MEDICAMENT EFFICIENCE ET CRISE ECONOMIQUE Marc Czarka, MD, FBCPM Collaborateur Scientifique Département d’économie de la Santé ESP-ULB

2. AGENDA • INTRODUCTION • THE FOURTH HURDLE • EFFICIENCY AND PHARMACO-ECONOMICS • FINANCIAL CRISIS IMPACT ON HEALTHCARE AND MEDICINES • CONCLUSION

3. CHANGING HEALTHCARE ENVIRONMENT • Advances in technology • Political forces (growing public expectations vs. budget control) • Economical forces (competition through innovation) • Aging population • = Raising health care expenditures

4. THE FOURTH HURDLE • To get a marketing authorization, a drug has to show: • Quality • Safety • Efficacy • (Risk/benefit ratio)

5. THE FOURTH HURDLE • Four widely accepted “global principles” governing the planning, funding and provision of healthcare services: • fair access, • efficiency, • responsiveness to society and • innovation.

6. EFFICIENCY?

7. HEALTH ECONOMICS • Health economics is applying economic principles and economic theories to health and health care • Or,the comparative analysis of alternative courses of action in terms of both costs and outcomes

8. PHARMACO-ECONOMICS • Pharmaco-economics • Is health economics applied to drugs • Viewed by pharma as the 4th hurdle to get the product on the market • Now requested by authorities all around the world before granting reimbursement

9. EFFICIENCY • The different steps of evidence • Can it work ? = Efficacy (“Efficacité”) • Does it work in reality ? = Effectiveness (“Effectivité”) • Is it worth doing it, compared to other things we could do with the same money = Efficiency (“Efficience”)

10. EFFICIENCY • Budgets are limited, needs are unlimited  • Safety, efficacy and quality are not enough anymore • In a world with scare resources, efficiency becomes important

11. EFFICIENCY • So authorities • request pharmaco-economic evaluation to be added to reimbursement file • to allocate budgets to interventions that offers most health gain per unit of money

12. EFFICIENCY • “Give us more evidence that your drug is efficient and leads to savings in real life” The evidence dilemma… Allow us first to the market (reimbursed) and then we will be able to show real life evidence Adapted from Annemans L.

13. EFFICIENCY Other dilemma’s • “According to your study, you are cost-effective. Now, lower your price by 20%, and you will even be more cost-effective” • “You claim that you can save money elsewhere (hospitals…). But a hospital bed is filled anyway. So, you don’t really save”

14. WHAT IS THE RELATIONSHIP BETWEEN COSTS AND OUTCOMES? Outcomes ? Is it worth spending that much money ??? Costs

15. Costs Outcomes ECONOMIC EVALUATION

16. Costs Outcomes ECONOMIC EVALUATION • Type of Costs : • Direct medical costs(hospital, drugs, labs, doctors, …) • Direct non medical costs(transportation, diet, …) • Indirect costs(premature death, time lost from work) • Intangible costs(pain, suffering)

17. Costs Outcomes ECONOMIC EVALUATION • Type of outcomes: • clinical parameters(reduction in blood pressure, normalization of cholesterol level, …) • morbidity / mortalityendpoints (events avoided, survival) • quality of life improvements • patient satisfaction or preferences

18. Costs Outcomes ECONOMIC EVALUATION Outcome is • Longer Life • Better Life

19. WHICH YARDSTICK? • Multiple yardsticks: • Perinatal or neonatal mortality • Life expectancy at birth, later • Disease or handicap free years expectancy • Do the best you can with a certain percentage of GDP • Contribution to GDP growth • Alphabet soup of LYG, LOS, NNT, NNH, DALY, QALY… • Let’s use QALY as an example

20. QUANTITY AND QUALITY OF LIFE AS OUTCOME Basic idea underlying the QALY? (Quality-Adjusted Life Years) • Combination of quality of life and length of life into one measure - a kind of index • Facilitates comparisons between different kind of treatments and diagnoses

21. QUANTITY AND QUALITY OF LIFE AS OUTCOME The concept of the QALY • If the health state “blind” gives a quality weight of 0.4, then one year as blind gives 0.4 QALY • …or 0.4 years in full health gives the same number of QALYs (0.4) as 1 year as blind Adapted from Jonsson B.

22. Utility (Weights) New Medical Treatment 1 QALY gained, adding life to years 0 Existing Medical Treatment Quantity of Life (Years) LET’S COMPARE

23. COMPARING COSTS AND CONSEQUENCES additional costs additional effects

24. COMPARING COSTS AND CONSEQUENCES additional costs Innovative products most often cost more and do more 1% 95% additional effects 3% 1% Innovative products are rarely cost-saving

25. Unaffordable? Bargain? IS THIS DRUG COST-EFFECTIVE ? additional costs E D C B additional effects A

26. THRESHOLD RECOMMENDATIONS

27. QALYs in Decision-Making: Issues and Prospects • The use of measures, such as the QALY, relate to social decisions • An improvement in health outcomes might not be the only reason to use the QALY • Other reasons are • overall improvement of societal welfare • indicator of society’s care and compassion. Smith MD, Drummond M, Brixner D. Moving the QALY Forward: Rationale for Change. Value in Health, 2009; 12,S1-4

28. QALYs in Decision-Making: Issues and Prospects • In the conventional concept of QALYs, a health state that is more desirable is more valuable. • Value is equated with preference or desirability. • A critical question is: desirable to whom, self and/or community? Weinstein MC, Torrance G, McGuire A. QALYs: The Basics. Value in Health, 2009; 12,S5-9

29. QALYs :UNDERLYING ASSUMPTIONS Weinstein MC, Torrance G, McGuire A. QALYs: The Basics. Value in Health, 2009; 12,S5-9

30. MERITS? • There are merits in the use of the QALY within the mainstream of decision-making concerned with questions of resource allocation within patient populations • To conclude, it is important to recognize that, at either pole, we have to make social decisions -implicit, if not explicit- about resource allocation. In my view, the use of cost-utility models that use the QALY can be a pragmatic and necessary tool to improve these complex decisions often made under conditions of considerable uncertainty and bias. Kind P et al. The Use of QALYs in Clinical and Patient Decision-Making: Issues and Prospects. Value in Health, 2009; 12,S27-30 Garrison LP Jr, Editorial: Using QALYs for Societal Resource Allocation. Value in Health, 2009; 12,S36-37

31. WELL KNOWN MEDICAL THRESHOLDS

32. COST PER LYG WITH VARIOUS INTERVENTIONS Source: J Probstfield, Am J Cardiol 2003: 91 (suppl): 22G – 27G Johannesson et al. N Engl J Med 1997; 336: 332–336; T O Tengs, Risk Analysis 1995: 15, 3, 369-389;

33. COST PER LYG WITH VARIOUS INTERVENTIONS Source: J Probstfield, Am J Cardiol 2003: 91 (suppl): 22G – 27G Johannesson et al. N Engl J Med 1997; 336: 332–336; T O Tengs, Risk Analysis 1995: 15, 3, 369-389;

34. SELECTED RISK REGULATIONS AND THEIR COST PER LIFE SAVED The price of prudence, The Economist, January 22, 2004

35. VIAGRA CAN BE SHOWN TO BE VERY COST-EFFECTIVE … Incremental Cost/QALY (GBP) 25,000 20,000 ‘appropriate’ for NHS funding < £25,000 15,000 10,000 5,000 £3,369 £3,017 £2,803 £2,695 £2,329 0 Year 1 Year 2 Year 3 Year 4 Year 5 Time Horizon Source: Stolk et al, BMJ 2000:320

36. … BUT WHAT IS THE SOCIAL AND THERAPEUTIC NEED? Incremental Cost/QALY (GBP) 25,000 Not Fully Funded 20,000 15,000 ‘appropriate’ for NHS funding < £25,000 10,000 5,000 £3,369 £3,017 £2,803 £2,695 £2,329 0 Year 1 Year 2 Year 3 Year 4 Year 5 Time Horizon Source: Stolk et al, BMJ 2000:320

37. EFFICIENCY So, is it anefficientdrug ? • Not a Yes / No answer • Depends on many factors : • compared to what ? • health care system • cost structure • population considered

38. EFFICIENCY • Other factors are also important to consider in resource allocation : • are there alternatives ? • budget impact ? • affordability ?

39. PHARMACO-ECONOMIC EVALUATION • A tool for efficient resource allocation • Value for money • Does not replace decision making • Other goals also important

40. CRISIS IMPACT ON HEALTHCARE • The drivers of the sector are relatively independent of the wider economy : • prevalence of the disease • unmet medical needs • population growth and aging population • Demand • continues to grow over time and • is relatively inelastic compared to demand of other goods like cars, holidays… • However, tougher economic conditions will have an impact on society’s ability and willingness to pay • Hence, impact will be a collateral damage The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

41. PRESSURE FACTORS • As GDP growth slows, consumer spending will fall and unemployment will rise, leading to • decrease in tax revenues • increase in demand on social services budgets • significant increase in pressure on public finance • The cost of various government bailing out the financial sector will • exacerbate these pressures. • As the gap between growth of health care expenditures and growth of GDP widens, the specific pressure for cut in health care spending will grow. The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

42. PRICE PRESSURE • Increasing use of generic drugs • Higher rebates in tender business • The Oslo conference « Health in times of global economic crisis: implications for the WHO European Region (February 2009) »: Get all stakeholders ready to rationalize and do better with less money. More specifically, explore options and implement measures to reduce the cost of medicines and medical devices. The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

43. INCREASING REQUIREMENT FOR EVIDENCE • Health Technology Assessment (HTA) Bodies will assess more rigorously efficiency which will likely lead to more restrictive reimbursement • Site of Care and Local Payers may require more formal data (« mini HTA ») before paying or covering for a new technology Increasing Importance of Non Clinicians Stakeholders

44. CONSUMERS’ BEHAVIOUR • Consumers themselves may limit their access to treatment • Patients in the US start skipping doses, cutting pills in half and falling to fill prescription • The effect are even more apparent where spending is more discretionary in cosmetic-related medicine and surgery for instance. The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008

45. IMPACT ON HEALTH OUTCOMES? • Impact on mortality • Russian Federation in the early 1990s : major increase in adult male mortality • Thailand 1996-1999 : increase in adult mortality • No Impact on mortality • Data from the US and Europe show that recession have been accompanied by falling mortality rate • reduction of smoking • Reduction in alcohol use • more time available for child care The Financial Crisis and Global Health WHO – 21 January 2009 Report of a high-level Consultation

46. CONCLUSION • Substantial uncertainty still exist but some fundamental drivers will remain : • Industry’s innovative drive • Demographic shock • Downward pressure on prices and more restrictive reimbursement decisions : • Cost-containment measures • Cost-utility evaluations