Innovative reimbursement tools for cancer treatments. Analyzing the feasibility of single price versus indication based pricing in multi indication products. The case of Spain



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García Goñi, Manuel (2022) Innovative reimbursement tools for cancer treatments. Analyzing the feasibility of single price versus indication based pricing in multi indication products. The case of Spain. [ ] (Unpublished)

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The increase in pharmaceutical spending and more specifically in pharmaceutical spending in hospitals is a growing concern for policy makers. The main determinant of this increase is the adoption of healthcare technology, with innovative pharmaceutical treatments accounting for a significant part of this increase in spending, and among these, cancer treatments being of the most important. At the same time, it is increasingly common to have in the market multi-indication oncology treatments, which do not normally offer the same clinical benefit across indications, and as a consequence, it is not possible to reflect the real value of the medicine under a single cross-indication price, constituting a challenge for pricing and reimbursement responsible agents. The health economics literature and the international experience have explored different approaches to bear this challenge, such as indication based pricing, multi year multi indication agreements, or the use of specific funds. The goal of this report is to analyse the practical feasibility of the implementation in Spain of two of them: indication based pricing (with different listed prices per indication for multi-indication products), or a unique listed price for all of them. We perform this analysis through the composition of a multidisciplinary Expert Panel that met twice during 2021 in directed discussions. By explicit request of the Members in the Expert Panel, this report does not endorse any specific recommendation for one or another alternative but just make an analysis of advantages and disadvantages of each system.
The alternative of a unique single price for all the indications of a product is in principle easier to manage, and in terms of regulation, it would not need major modifications to be operative and reduces the risk of arbitrage. However, it moves away from the valuebased pricing and may result in strategic behaviour in companies that may derive in delay in access for some patients. If pursued, a weighted average taking into account the added therapeutic value and the expected number of patients that could be benefitted per indication is recommended, always avoiding the only use of a price-volume agreement. The price should be revised every time that there is a new indication approved and periodically to check new clinical evidence on the indications as well as possible deviations in the estimation of the demand.
The alternative of indication based pricing (IBP) promotes value-based pricing, through a different price, based on the value evidenced in the economic evaluation exercise to each approved indication, and in the long run, it improves social welfare and provides the right incentives for innovation and a higher degree of competition in markets.
However, its implementation would need some normative modifications, may result in incentives for arbitrage, greater administrative costs in the purchasing and payment process, and also in monitoring and registering the specific use per indication. At the same time, it can produce some reluctance to the change in local and regional providers and payers who are already negotiating (and should continue to do so) indication-specific discounts. As in the case of single price, prices under IBP should also be revised periodically.
Both alternatives may admit exceptions in order to improve their results. IBP is unfeasible for agnostic tumours or when the administration of the medicine is not independent by indications. Single price is problematic when differences in added value may derive in lack of incentives for commercialization of a new indication, with the loss of access to the medicine for affected patients.
Interestingly, both alternatives share some common challenges for the appropriate implementation. They both rely on the existence of regulation promoting systematic, rapid and homogeneous economic evaluations or at least the characterization of the therapeutic value for all innovative products and all the new indications of them and periodic revisions, and on the existence of a structure capable of performing in a timely manner. That is a major challenge in Spain, where economic evaluation has not yet been implemented in a precise, sophisticated and transparent manner (in the simpler situation of only one listed price per product). It will become much more complicated in the case of indication specific economic evaluations. REvalMed is a new network launched in 2020 by the Ministry of Health to solve this gap, with the goal of adding economic evaluation to therapeutic positioning reports (IPTs). However, it is still too early to determine its success with a low number of economic evaluations published so far.
Another common challenge shared by both alternatives is the need of a Registry of Clinical Data, which should include specific and as complete as possible information regarding the indication for which the product is purchased, and monitor its use for patients per indication, the added value and health outcomes obtained, or adverse effects. That registry should help to the development of economic evaluations to set and revise prices, to identify any deviation from the expected volume in previous budget impact analysis, or to update assessment of added value with new clinical information. That registry should be as homogeneous as possible for all Autonomous Communities. The initial investment for composing that registry may be costly. The question of whether the cost of this registration should be shared between the companies and the regulator or the provider, or whether it should be borne entirely by one of these parties, is a matter to be debated. Furthermore, the main goal of that registry should be its use for improving clinical benefits for patients and not for price setting (also). If the main objective were price setting, this could increase resistance to the implementation of this register from various stakeholders at the local and regional level, as they already negotiate prices.
In order to attain an appropriate implementation of any of the two alternatives, Spain should provide a regulatory and structural framework in which a registry of clinical data be operative and help the performance of systematic, rapid and homogeneous economic evaluation exercises for all new indications in order to help in their price setting, and periodically, in their revisions. Both alternatives could be used together with other complementary methodologies such as budget impact analysis, the analysis of the degree of competition at the different indications, or even multi criteria decision analysis or cancer specific funds that have hardly been presented in this report.

Item Type:Working Paper or Technical Report
Subjects:Medical sciences > Medicine > Oncology
Medical sciences > Pharmacy > Pharmacology
Medical sciences > Pharmacy > Public health
Social sciences > Economics > Public economy
Series Name:
ID Code:74804
Deposited On:28 Sep 2022 11:30
Last Modified:29 Sep 2022 07:06

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