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Current Approaches in European Health Care Policy

Current Approaches in European Health Care Policy. What models can balance the needs of payors and industry?. Three Waves of Health Economics. The principles The benefits of innovation From price comparisons to cost-effectiveness The ”fourth hurdle”

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Current Approaches in European Health Care Policy

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  1. Current Approaches in European Health Care Policy What models can balance the needs of payors and industry?

  2. Three Waves of Health Economics • The principles The benefits of innovation From price comparisons to cost-effectiveness • The ”fourth hurdle” HTA and Cost effectiveness as a requirement for pricing and reimbursement • Health economics in the market place Accountable health economics

  3. The first wave –establishing the principles • Cost-containment a new important goal for health care systems in 1970s • OECD international comparative data base • Health economics not primarily about cost containment • Allocation of resources for better health • Economic evaluation a method for assessing costs and benefits of actions aimed at better health • Innovation a major factor in health care

  4. Benefits of innovation • Reduced health care expenditures in other sectors, for example hospitalisations • Improved productivity • Reduced indirect costs due to illness • Improved survival • Value of life • Improved quality of life • Quality-adjusted life years

  5. HTA and Market AccessCost-effectiveness as a new criteria • HTA for medical technologies established in the US in the 1970s • First European agency established in Sweden 1987 (SBU) • Today agencies in most countries • Introduction of the “4th hurdle” for drugs • Australia 1992 • UK, NICE 1999 • Sweden, LFN 2002

  6. HTA and reimbursement (1) • Reduce price differences between products with similar effectiveness • In a dynamic market you expect price differentials which consumers react to • Payers do not trust the health care providers to react to price differentials in a rational way • HTA is used to provide evidence for clustering • IQWiG as example • Statins and insulin analouges

  7. HTA and reimbursement (2) • For drugs the are “true innovations”, HTA will be used to provide information for • Cost-effective indications at different levels of price at introduction • Reimbursement will be linked to cost-effectiveness • Follow-up studies for gaining additional information • Verification that the right patients are treated • Verification of benefits in clinical practice

  8. France: The Transparency CommissionASMR: “Amelioration du Service Medical Rendu” • ASMR I • Major therapeutic advance • ASMR II • Important improvement in terms of efficacy and/or safety • AMSR III • Modest progress in terms of efficacy and/or safety • AMSR IV • Minor progress in terms of efficacy and/or safety • AMSR V • No therapeutic progress

  9. France: Criteria for pricing and reimbursement • ASMR I-II • Reimbursement and free pricing • Based on comparison with prices in other “big five” • Answer within 15 days • Price fixed for 5 years • ASMR III • Same as above if sales below 40MEuro • AMSR IV-V • Bargaining and reference pricing

  10. Germany and the Netherlands • To be or not be clustered – that is the question (Hamlet, Prince of Denmark) • HTA and economic evaluation may influence the decision • If clustered • Reference price • If not clustered • Opportunities for premium price based on HTA and economic evaluation

  11. Evidence based re-imbursementLFN Review of Anti-ulcer drugs in Sweden • Reimbursement for generic omeprazole • Generic substitution at pharmacy • Reimbursement for Nexium (patent) • In erosive GERD • For HP eradication • No reimbursement for other products unless they reduce price to that of generic omeprazole

  12. Impact of HTA and Economic Evaluation on Decision Making: Evidence from EUROMET • EUROMET 2000 • Limited knowledge about economic evaluation • No evidence on influence on decision making • EUROMET 2004 • Improved knowledge about economic evaluation • Some influence, put the potential greater than actual use • Main barriers relevance and bias

  13. European Comparator report regarding funding and access to oncology drugs Karolinska Institute (KI)/ Stockholm School of Economics (SSE), Stockholm Sweden Nils Wilking nils.wilking@karolinska.se Bengt Jönsson bengt.jonsson@hhs.se Christer Svedman MD, PhD, KI. Niklas Zethraeus PhD, SSE. Frank Lichtenberg, Columbia University, New York

  14. Trastuzumab uptake in selected European countries

  15. Trastuzumab uptake in selected European countries

  16. Trastuzumab uptake in selected European countries

  17. Trastuzumab uptake in selected European countries

  18. The third waveThe role of health economics in a possible resolution • Decisions about reimbursement are based on therapeutic value and cost-effectiveness • Price controls should be abolished since price is declared in the reimbursement application and included in the cost-effectiveness study • Resource allocation is directed towards an optimal use of new medicines • Provide correct incentives for investments in R&D

  19. The third waveConsequences • Reimbursement will be for defined indications • Decisions about reimbursement based on evidence at launch • Follow-up studies used to reveal the true cost-effectiveness in different indications • Industry and other stake holders share information needed to assess cost-effectiveness • This evidence will be used as a basis for clinical governance

  20. The third waveAccountable health economics • Benefits for industry • Market access for new medicines • Pricing related to therapeutic value in actual use • Improved and trustful relation to its customers • Market based incentives for innovation • Benefits for the costumers • Patients will get access to the best possible therapy within the general resource constraints that health care systems work within • Drugs will take the share of health care expenditures that is determined by the cost-effectiveness of new medicines • Third party payers – private as well as public – can show their principals that money used are well spent

  21. The third waveAccountable health economics • Risks • For industry • Information will be used against the industry? • Unproven business model • For the costumers • Captured by industry? • Alternatives • More regulation? • Less reimbursement?

  22. The third wave - Summary • Information for economic evaluations will come from actual use of technology • Shared information between different stakeholders • Payers, industry,doctors,patients • Innovations will be used to improve the quality and efficiency of the health care system

  23. Thanks for your attention!

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