Decision-making on the funding of new drugs: International experiences

1. Decision-making on the funding of new drugs: International experiences 1st Latin American Workshop of the Knowledge Network on Health Benefits Packages Santiago de Chile, 4-6 October 2010 Ellen Nolte Athanasios Nikolentzos, Simo Goshev, Nicholas Mays

2. Background • Review of policies on the funding /regulation of access to licensed pharmaceuticals under the statutory system (2008/2010) • 11 European countries + Australia, Canada & New Zealand www.international-comparisons.org.uk

3. Characteristics of health systems in 14 countries under review • Provide (near) universal coverage of their population • Main mode of funding of the statutory system is taxation and/or social health insurance (60-80% of total health expenditure) • Spend between 2700 US$ PPP per capita (NZ) to 5000 (Norway) on health (2008; average: US$ 3600) • Statutory system principally covers primary and specialist/hospital services, and (variously) preventive care, prescription drugs, mental health care, dental care etc • Cost sharing arrangements common, in particular for pharmaceuticals and dental care • Mechanisms to protect selected groups through exemption from charges (e.g. older people in Spain), annual caps on expenditure (e.g. Norway, Sweden), and complementary private health insurance covering statutory user charges (France)

4. Total health expenditure in 14 countries (2008*) Source: OECD Health Data 2010 * 2007: Australia, Denmark

5. Health expenditure by source in 13 countries (2008*) Source: OECD Health Data 2010 * 2007: Australia, Denmark

6. Expenditure on pharmaceuticals in 13 countries (2008*) Source: OECD Health Data 2010 * 2007: Australia, Denmark

7. Cost sharing arrangements in 14 countries Source: adapted from Thomson et al. 2009

8. Assessing new (outpatient) drugs for funding in 14 countries (1)

9. Assessing new (outpatient) drugs for funding in 14 countries (2) • Decisions on drug formularies used in hospital vary, with some leaving it to hospitals while others (Italy, Spain, Sweden, UK) use the process in place for outpatient drugs • In most countries, new drugs have to be included in positive lists; Germany and the UK principally fund every new licensed drug under the statutory system (with important exceptions) • Cost effectiveness is an explicit criterion in decision-making on new drugs 8 of 14 countries, although not necessarily the only criterion. Other countries are moving towards formalising use of cost effectiveness criteria (Denmark, France, Germany)

11. Delegating (difficult) decisions • Assumption that organisations outside the Ministry of Health are better placed to make (or advise on) decisions : • “[...] the arrival of the HAS which is independent and gives public advice, which can be followed or not, did change the landscape and has allowed the Ministry to rely on scientific expertise to engage in this way with disinvestment [which was] not really useful before.” (HAS, France) • Delegation of such decisions also seen as a means to separate politics from the decision-making process and so increase their acceptability • Yet, separation of the two not always possible Source: Ettelt et al., 2010

12. Making difficult decisions (1) • Decisions about service coverage (including pharmaceuticals) tend to affect interests of range of stakeholders and those to exclude or terminate funding of an existing service (‘de-listing’) tends to be most controversial • Even where decision-making is formally delegated to other actors (e.g. NICE, G-BA), public pressure is typically directed at the Ministry of Health • “We always emphasise that we do not have a socialised [i.e. state-run] system […]. But of course we do have political responsibility for the functioning of the overall system. And of course, the moment the Federal Joint Committee de-lists a service […] all lobbying and publicity efforts will concentrate on the Ministry.” (Federal Ministry of Health, Germany) • Ministr(ies) of health seem to be almost universally seen as responsible for what is covered by the health system, despite apparent differences in their legal and technical remit concerning such decisions Source: Ettelt et al., 2010

13. Making difficult decisions (2) • Ministries and their ministers may be put in the spotlight irrespective of their legal mandate and as a consequence, the ministry might decide to intervene despite a limited mandate: • “The G-BA did not implement these new more expensive medicines [artificial nutrition support] due to a lack of evidence, whereupon the ministry strongly intervened. […] It was also clear that politicians and particularly the administration of the ministry were concerned that reports would appear in the Tagesthemen [German prime-time news programme] or somewhere else, saying, ‘Health insurance no longer pays for high quality artificial nutrition support for severely-ill cancer patients’.” (G-BA, Germany) • Role of commercial /industry interests and general public pressure in prompting intervention against the scientific evidence: • “The politicians were behind the introduction of [the] HPV [vaccine], with demands in the parliament. The patients demanded [it], they went to the politicians. So the Minister couldn’t do otherwise, it was a losing battle, so there was nothing to be done; he had to introduce the free vaccination for everybody.” (Danish Medicines Agency, Denmark) Source: Ettelt et al., 2010

14. Conclusions • Pharmaceutical policies with regard to regulation of access to drugs vary widely, largely reflecting countries’ institutional, political, social and historical contexts • All countries have established (independent) bodies responsible for the assessment of new (and existing) drugs for inclusion in the statutory benefits package • Tensions between authorities (governmental or non-governmental) responsible for reimbursement decisions exist in all settings