Keith Tolley, Director, Tolley Health Economics Ltd IDF Europe Symposium 30 th September 2012

1. Reimbursement policies across Europe Keith Tolley, Director, Tolley Health Economics Ltd IDF Europe Symposium 30th September 2012 Tolley Health Economics Ltd Strategic Consulting in Health Economics and Market Access

2. Reimbursement policies for new drugs • Consideration of the evidence on therapeutic benefit vs similar drugs used in practice to determine: • Level of reimbursement. • Price drug reimbursed at. • May also contain consideration of cost-effectiveness of new drugs: • Added health benefits • Resource savings • (Incremental) cost of new drug

3. Diabetes treatment pathway and costs (as was until 5 years ago)

4. Emerging benefits in diabetes

5. Comparison of annual drug costs in UK for licensed diabetes drugs *not yet licensed in UK

6. UK reimbursement • All new drugs for type 2 diabetes have been listed for reimbursement by Department of Health • However, new drugs and technologies, including for diabetes, are assessed for clinical and cost-effectiveness by: • NICE (covering England and Wales) • Scottish Medicines Consortium (covering Scotland) • Guidance and recommendations issued are intended to be followed by local health payers

7. NICE clinical guidance number 87 in Type 2 diabetes, May 2009

8. Single appraisals of newer type 2 diabetes drugs (NICE and SMC) Assessed by NICE and SMC • Liraglutide (2010): • Recommended by NICE in patients with high BMI, or where weight loss would be beneficial • Where weight loss is sustained as well as HbA1c reduction • Only recommended in dual/triple therapy in restricted circumstances: when met/SU and TZD/DPP-4 not tolerated, and only the lower dose of 1.2mg daily. • SMC restricted liraglutide to use as a third line agent as economic case had not been made vs SU as dual therapy. • Exenatide prolonged release (2012): • Similar recommendations to liraglutide 1.2mg.

9. Single appraisals of newer type 2 diabetes drugs (NICE and SMC) Assessed only by SMC: • Exenatide in combination with insulin (2012): Recommended: • Assessment based on a comparison with insulin glargine alone • Linagliptin (2012): Recommended in combination with metformin in patients for whom an SU is inappropriate. • Comparator was sitagliptin, showing similar efficacy, lower costs.

10. Single appraisals of newer type 2 diabetes drugs (NICE and SMC) Assessed only by SMC: • Sitagliptinmonotherapy (2010): Recommended when metformin and SU contraindicated or not tolerated: • Comparator was TZD • Saxagliptin (2010)– Recommended as add-on to metformin when SU inappropriate: • Comparator was sitagliptin, showing similar efficacy, lower costs. • Recent non-recommendation in combination with insulin (2012)

12. France • As a chronic potentially life threatening condition Type 2 diabetes drugs (typically) receive 100% reimbursement. • To determine price for reimbursement, new drugs are given an ASMR rating (therapeutic benefit) vs current therapies. • Transparency Committee of the Haute Autorité de Santé determine ASMR rating: • Rating is I-V • To attain a higher price classification require ASMR I-III

13. ASMR (Amelioration du service medical rendu) rating in France

14. Transparency Committee recommendations • Liraglutide (2009) • Compared with exenatide, it was considered there was a small efficacy benefit and an advantage of once daily administration • Improvement in actual benefit - rating of IV: ‘minor improvement in dual or triple therapy with met/SU. • Insufficient for price premium over exenatide • Saxagliptin (2009): • Compared to sitaglitin, the TC considered no improvement in actual benefit in dual therapy with met or SU, hence received a V rating.

15. Germany • 2011 Act for the Restructuring of the Pharmaceutical Market in Statutory Health Insurance (AMNOG) process of assessing therapeutic benefit of new drugs • To support price negotiations or reference pricing • Reimbursement pricing decisions made by G-BA, with IQWiG performing appraisals of therapeutic benefit according to rating scale: • 1=major benefit, 2= significant added benefit, 3= slight benefit, 4=unquantifiable benefit, 5=no added benefit, 6=less benefit than comparator • An assessment of linagliptin performed by IQWiG in 2011 and published in 2012

16. Comparisons assessed by IQWiG

17. IQWiG conclusion • Considered their comparators to be the correct ones • “Overall, there is no proof of added benefit from linagliptin. Thus, there are also no patient groups for which therapeutically relevant added benefit can be deduced”. • Rating of 5 • Linagliptin added to reference pricing not price negotiation (needs a rating of 4 or above for this)

18. Conclusions • Type 2 diabetes drugs tend to be reimbursed, following an assessment of therapeutic benefit, and (in some countries) cost-effectiveness. • Newer drugs reimbursement coverage tends to be restricted • Submissions to reimbursement agencies have to present patient relevant benefits: e.g. Reduction in complications, reduction in weight in patients at higher risk • Increasing focus on price in countries previously considered free pricing: • Germany AMNOG law • UK – Value Based Pricing on the way!