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OVERVIEW SLIDES

Stop TB Working Group on New Vaccines: Task Force on Economics and Product Profiles Discussion Points London School of Hygiene and Tropical Medicine 11-12 December 2008. Andrew Farlow Research Fellow in Economics, Oriel College www.economics.ox.ac.uk/members/andrew.farlow. OVERVIEW SLIDES.

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OVERVIEW SLIDES

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  1. Stop TB Working Group on New Vaccines:Task Force on Economics and Product ProfilesDiscussion PointsLondon School of Hygiene and Tropical Medicine11-12 December 2008 Andrew FarlowResearch Fellow in Economics, Oriel Collegewww.economics.ox.ac.uk/members/andrew.farlow

  2. OVERVIEW SLIDES

  3. REVIEW OF EVIDENCE ON EPIDEMIOLOGY, SOCIOECONOMIC IMPACT OF TB AND COST-EFFECTIVENESS OF NEW TB VACCINES • Introduction • Measurement of progress against targets set • The complexities of TB – latent infection, HIV and MDR- and XDR-TB • Existing vaccination strategies – the BCG vaccine • New vaccination strategies and the health impact of new TB vaccines • Drugs, vaccines and diagnostics working together • Cost-effectiveness of TB control and vaccination • Limitations of cost-effectiveness analysis • Socioeconomic analysis and cultural issues • Summary of implications for policy making • A very selective bibliography

  4. BASIC MARKET AND REVENUE FRAMEWORKS • Some introductory thinking • Comparing market and revenue frameworks • Replacement vaccine • Boost vaccine • Total portfolios

  5. RATE OF ADOPTION AND MECHANISMS OF UPTAKE • Introduction • Hep B as a model for adoption? • EPI levels • Efficacy and coverage

  6. PRICING STRUCTURES, TIERED PRICING, WILLINGNESS TO PAY • The principles of tiered/Ramsey vaccine pricing • Consultancy model pricing structures • Incentives for rich market and ‘high risk’ market uptake, and implications for tiered pricing strategies • Scenarios for non-rich markets and implications for tiered pricing strategies • Vaccine catch-up • ‘Willingness to pay’

  7. POLICY PROCESS METHODOLOGY TO IMPROVE ACCURACY OF PRICING AND DEMAND FIGURES AND SPEED OF VACCINE UPTAKE • Introduction • Aim • Consultancy models • Vaccination and health policy literature • Political science and public policy literature • Next steps • Vaccination and health policy literature for future review • Political science and public policy literature for future review

  8. COST ISSUES • Cost to develop a new vaccine • Attrition rates / probabilities of success • Portfolio reasoning of ‘at least one’ success • Applied Strategies portfolio analysis • Commentary: Attrition rates and costs of development • Other cost of development issues including biomarkers, trial site limitations, time to licensure • COGS and LDC sales brought forward • Booster COGS • Some sensitivity analysis • Costs caused by plant size and capacity issues

  9. TB VACCINE AMC OR SIMILAR INITIATIVES • Relative role of such mechanisms as: • Prize • Product subsidy (including how best to structure it) • Form of production capacity insurance • Role of competition • Other incentive issues • Lessons from other cases (see case studies)

  10. LESSONS FOR TB FROM A SELECTION OF OTHER VACCINES • Hepatitis B • Pneumococcal • Human papillomavirus (HPV) • Rotavirus • Haemophilus influenzae type B (Hib)

  11. TOPIC-BY-TOPIC SLIDES

  12. Distribution of tuberculosis in the world in 2003 Estimated incidence rates per 100,000, all forms of TB Taken from Dye C, Watt CJ, Bleed DM, Hosseini SM, Raviglione MC. Evolution of tuberculosis control and prospects for reducing tuberculosis incidence, prevalence, and deaths globally. JAMA 2005; 293: 2767–75.

  13. High incidence of active TB • High incidence of active tuberculosis: • High level of latent TB infection (around one-third of the world’s population) • Relatively recent problems of coinfection with HIV/AIDS • Increasing multi-drug resistance to treatment • 9.2 million new cases of TB in 2007 • 1.6 million deaths (137 cases/100,000 population, 25 deaths per 100,000 population) • 31% of which in the African Region • 55% of which occurred in South-East Asia and the Pacific *Global tuberculosis control: surveillance, planning, financing: WHO report 2008. (WHO/HTM/TB/2008.393).

  14. Following the peaking of epidemics in Africa and Europe, TB case rates are stable or falling

  15. Trajectories of tuberculosis epidemic for nine epidemiologically different regions of the world See scoping study for full reference, fig 1.3

  16. Current Targets • Targets centre around expanding Directly Observed Treatment Strategy (DOTS) and on achieving reductions in TB incidence, prevalence and death rates • The Millennium Development Goals set out the impact target of halting and reversing TB incidence by 2015 • WHO’s Stop TB Strategy (launched in 2006) has set further targets: • By 2005 - At least 70% of people with sputum smear-positive TB will be diagnosed (i.e. under the DOTS strategy), and at least 85% cured. These are targets set by the World Health Assembly of WHO (first set in 1991) • By 2015 - The global burden of TB (per capita prevalence and death rates) will be reduced by 50% relative to 1990 levels • By 2050 - The global incidence of active TB will be less than 1 case per million population per year • The principal WHO measure of case detection is the rate of case detection for new smear-positive cases in DOTS programmes

  17. Progress • National estimates suggest 77 countries met the 70% target for case detection rates by the end of 2006* • Although some countries have met the target, progress has been much slower in the African, Eastern Mediterranean and European regions • Nevertheless, the fall in incidence has been slow and projected incidence will still be 100 times the elimination threshold in 2050 • Observe that as an epidemiological measure of success, incidence usually changes more slowly than prevalence or deaths in response to control efforts *Global tuberculosis control : surveillance, planning, financing : WHO report 2008

  18. Projected incidence/million/year to 2050 From: Dye. C. 2008

  19. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Surveillance and data: • Sound cost-effectiveness analysis needs sound epidemiological analysis • Poor-quality data and potential bias in incidence estimates (for example, case detection uses total number of smear positive cases as the denominator) • Not controlled experiments - difficult to do inference • See Table 1.1, p11 of Part 1 of Scoping Study • Discussion Points: • To what degree does the Task Force take such surveillance problems as given and work analysis according to these constraints? • To what degree does the Task Force engage in discussions about the surveillance systems and the data generated from such systems with an eye to improving data available to its tasks? • What are the advantages and disadvantages of various approaches to measuring tuberculosis incidence, prevalence and mortality? • Data ‘ownership’ issues

  20. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Latency: • The latent nature of TB means that it will take a long time to achieve a low rate of infection • Latent stage TB infection (LTBI) can be detected via a tuberculosis skin test (TST), and thence treated to decrease the chance of progression to active TB. However, the interpretation of TST can be complicated if a person has had a vaccine • Discussion points: • What are the full complications and implications of the latent nature of TB for vaccine markets? • How does this affect the decision of countries to use vaccines as part of a control strategy and hence cost effectiveness analysis of such strategies? • For example, in countries where exposure to active TB is rare, treating latent TB is more likely to be the strategy of choice • How might this incentive change over time for countries that start off using vaccines?

  21. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Cost effectiveness methodologies – quantity and distribution: • See p22-31 of Part 1 of Scoping Study • Used to determine the relative cost of an intervention, such as vaccination, and the outcome or effect compared to no intervention (or another alternative) • In global health, cost of a health intervention per unit of outcome e.g. healthy life year averted (usually presented in Disability or Quality Adjusted Life Years - DALYs or QALYs) • Cost-effectiveness used to identify of knowledge gaps and the need for further research • Few cost effectiveness analyses of control strategies for TB, let alone of TB vaccines

  22. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Floyd (2003), 1982-2002, 66 studies, 28% were in high-burden countries • Few related to vaccination strategies • Expensive, and time-to-build long • Evidence from other vaccine launches: especially useful to design such studies around vaccine trial sites on the basis of a targeted early launch strategy that creates momentum for success • Baltussen* et al: • Most economic studies of tuberculosis in high burden countries do not assess the impact of interventions on transmission • Most use indicators of effectiveness that are specific to tuberculosis control, rather than generic measures • This can prevent the results on cost-effectiveness of tuberculosis control being compared with that of interventions for other diseases • This limits the usefulness of these studies in decision-making at the policy level *Baltussen R, K Floyd and C Dye “Cost effectiveness analysis of strategies for tuberculosis control in developing countries” British Medical Journal (2005) doi:10.1136/bmj.38645.660093.68 (published 10 November 2005)

  23. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Potential benefits to different institutions of an improved vaccine or vaccines: From Bishai, D. M., and Mercer, D

  24. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Discussion points: • See p24-p27 of scoping study for some results • Update? • Take the level and range of cost effectiveness studies as given or expand the level and range of such studies? • Current distribution of such studies? • Priorities for the future distribution if such studies are to be used as part of an evidence base for vaccine launch? • Priorities at different horizons? • Optimal combination of cost effectiveness studies by region or country? • Multivariate cost effectiveness sensitivity analysis of authors such as Zif et al?

  25. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Breadth of coverage of measures and Common protocols: • See p 28 for limitations and issues • Goal to make studies comparable • Often studies are found at a later date to be non-comparable or not as comparable as they could have been with a bit more prior thought and coordination • Weakens the ability to use such analysis for advocacy and to influence policy decision process • Most studies use indicators of effectiveness specific to tuberculosis control, rather than generic measures, making it difficult to compare with the cost effectiveness of interventions for other diseases • Further limits ability to use such evidence in the policy-making process • Discussion point: • Should the Task FOrce be more involved in standardizing the protocols of such studies so at to make results more comparable (e.g. hospitalization costs, productivity impacts, treatment of exchange rates, appropriate sensitivity analysis, end points, etc.)?

  26. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines Integrated strategies for prevention and control: TB vaccines more cost effective when combined with other control strategies:

  27. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Discussion point: • How can DOTS expansion complement the launch of a new vaccine or vaccines and vice versa? • How to use DOTS to identify gaps? • What are the implications at different horizons for infrastructure and costs? • How should analysis be adapted to take account of new drugs being developed?* • Are the intermediate goals and metrics of success different for different interventions, even if the final goals are the same? • What are full benefits and limitations of integration? *In many of the analyses, the public markets for vaccines in poor countries are valued relative to costs (and efficacy) of non-vaccine options, and this is usually presumed to be the current state of play vis a vis DOTS. There is a presumption underlying some investment case figures (those of BVGH/BCGH) that there will be no new drugs between now and 2030

  28. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Pre- and postexposure vaccine strategies: • Debate about the best strategy to improve immunisation against TB (pre- or postexposure, combination of vaccines and boost strategies) • Ziv et al, effectiveness of a pre- or postexposure vaccination strategy in developing countries with high incidence and prevalence of disease • At first, postexposure vaccines have a greater impact in reducing the number of cases of disease • This effectiveness declines over time (even with continuous vaccination campaigns) • effectiveness of preexposure vaccines rises • Pre vaccination ultimately nearly twice as effective in reducing the number of new infections • Over a 20-30 year horizon cases prevented under post- or preexposure vaccination campaigns roughly equal • Either way a widely deployed and highly effective vaccine, whether pre- or postexposure, the number of cases of TB in high-incidence countries is likely to remain high • Need for several vaccines or combination * Ziv et al (2004), extending the work Lietman T, Blower SM. The potential impact of tuberculosis vaccines as epidemic control agents. Clin Infect Dis. 2000;30:S316–22. Lietman T, Blower SM. Tuberculosis vaccines. Science.1999;286:1300–1

  29. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • 70%-80% reduced infection rate does not translate into 70%-80% reduced disease rate • Incidence of TB disease is driven by: • Susceptible persons who become infected and quickly progress to disease • Preexposure vaccines, given to uninfected individual, to reduce this route, but has little impact on the second route • Latently infected persons who slowly progress to disease often with a long time lag. but with little impact on the second • Postexposure vaccines, given to latently infected persons, act mainly on the second route with little impact on the first

  30. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines Flow diagram for postexposure TB vaccine

  31. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines Flow diagram for preexposure TB vaccine

  32. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines Predicted cumulative percentage of new infections with Mycobacterium tuberculosis prevented (preexposure = black, postexposure = red) under different uncertainty analysis. Zif et al monte Carlo simulation methods

  33. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines Predicted cumulative percentage of tuberculosis cases prevented (preexposure = black, postexposure = red) under different uncertainty analysis

  34. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Discussion points: • See p19-p20 of report • Current consensus regarding pre- and postexposure vaccines? • How important in determining product profile, market, etc., is the mechanism by which a preexposure vaccine works? • Investment case literature: Are there nuances that that literature misses and ways that that literature could be improved by a more sophisticated approach to choice between vaccine strategies?

  35. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Multi-drug resistance, discussion points: • How important is multi-drug resistance as a driving force for uptake of vaccines? • How is multi-drug resistance captured in models involving combinations of prevention and treatment measures? • HIV: • It is unclear what the effect of co-infection with HIV will be on TB vaccine effectiveness • About 40% adults with TB (15-49 age) are co-infected with HIV • Discussion point: • Does the TF need to know more about the long-term role of the HIV epidemic or does it take the work of others as given? Impact on: • Incidence of TB • vaccine effectiveness • cost effectiveness in developing countries • control programs • Implications for product profiles and market sizing?

  36. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Duration of protection of new vaccines: • Product profiles in willingness to pay questionnaires usually specify ten years • Discussion points: • Significance of finding that duration of immunity has a much greater impact on cost effectiveness if it is greater than ten years? • Implications for cost-effectiveness analysis of ten versus twenty versus life-long protection (delivery costs, long-term consequences for epidemiology of TB, etc.)? • Transmission dynamics: • Ideally estimates of averted DALYs should incorporate any transmission effects of the disease • How disease incidence may change in the future • A more substantiated claim on the effectiveness of a new intervention • Discussion point: • State of such analysis in the case of TB?

  37. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Cohort studies: • Discussion point: • What is the situation regarding cohort studies for informing disease burden and existing vaccination and treatment coverage and impact?

  38. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Other effects of a vaccine – discussion points: • When assessing a new vaccine candidate, how important is the interrelation with BCG and both direct and indirect effects of the new vaccine candidate? • How significant are non-specific survival benefits from vaccination? • Active pulmonary TB: • Active pulmonary TB is the leading cause of death in HIV/AIDS patients in the developing world and has spiraled in the last decade or so • Discussion points: • What is the state of play of modeling and evidence on this? • No modeling relating to this in the investment case analyses

  39. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Socio-cultural limitations: • See p28-30 for issues • There are many socio-cultural factors associated with TB, which can have severe implications for accessibility and acceptability of treatment and prevention strategies • E.g. care-seeking strategies of the poor • E.g. Chinese cost recovery systems • E.g. social stigma • Such factors have a direct implication for the validity of any assumptions about coverage made in a standard cost-effectiveness analysis • Other costs include early exit from school by children on account of their parents’ TB, the impact of social stigma, etc. • Discussion point: • To what degree does the Task Force regard these as an area the TF should investigate, or should this be left to others?

  40. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Health systems: • Concern about DOTS • Wide variation in the selection and implementation of control strategies within and among countries • DOTS programmes have mostly recruited patients who would have been detected and treated anyway in the public health systems • DOTS has failed in some countries to reach deeply into the private sector, and in others to provide access to patients living in areas with inadequate health services • Rates of improvement limited by quality of health system • Bloom et al, reaching populations gets harder and harder after the first wave of a new intervention • Discussion point: • If vaccines are to optimally ‘integrate’, what are the implications for modeling vaccination strategies and cost effectiveness of new TB vaccines – especially boost and prime boost – of the health systems issues?

  41. Epidemiology, socioeconomic impact of TB and cost-effectiveness of new TB vaccines • Discussion points: • What are realistic success metrics for vaccines over such horizons presuming a vaccine is launched, and presuming that vaccines are combined with other interventions? • How do such horizons impact: • investment decisions • product profile decisions • the nature of follow-on generations of vaccines • sponsor funding, etc.? • Epidemiologically-driven targets: • TB targets, as encapsulated in the MDGs, are not driven by an epidemiological framework • Discussion Points: • What would epidemiologically-driven TB targets look like, and what are the implications for vaccines? • How can the Task Froce influence an improved epidemiological basis for such targets?

  42. Basic market and revenue frameworks • t = the time of the cash flow • n = the total time of the project • r = the discount rate • Ct = the net cash flow (the amount of cash) at time t. • C0 = the capital outlay at the beginning of the investment time (t = 0) • So long as NPV is positive, risk neutral* investors should invest *Perhaps because they can diversify such as to be in effect risk-neutral on this investment. The above is a little too simplistic. If there is any potential variability of input values, uncertainty, even disagreement, the NPV derived will vary – potentially very considerably

  43. Basic market and revenue frameworks • Current market and investment case analyses • See p35-36 for basic comparisons • See p36-p42 for a case • See p44 on for boost and global XDR • See p48-p50 for total portfolio figures • Discussion points: • How satisfactory are the global market and investment case analyses so far created? • What is the balance between the need to generate absolute market numbers (the focus of current market and investment case analysis) and the need to improve the functioning of the market for vaccines, and more effective launch strategies? • Strategic thinking discussion point: Because of the concern to get numbers, much of the market analysis is remarkably devoid of strategic thinking. For example, over simple issues like: the levers that can be used to improve adoption of new technology; the relationship between efficacy and ease of uptake; catch-up strategies. Would it be too difficult to have investment case reports adopting a more strategic approach?

  44. Basic market and revenue frameworks • Public and private sectors: • The treatments of the division between public and private sectors in the various market/investment cases so far have been relatively rudimentary • Discussion points: • How is the division between public and private sectors best modelled? • Should this division be based on country-level data pertaining to other vaccines or past vaccine launches? • Does it depend on price? • Is it useful having more granular details about this, or will the effort just complicate the process of deriving a market figure while adding little value? • Conversely, is knowing the division useful for knowing how to adapt launch strategies?

  45. Basic market and revenue frameworks • Global MDR-TB and XDR-TB: • Analysis of impact of global MDR-TB and XDR-TB seems rudimentary in much market analysis • In theory governments and individuals should be prepared to pay to avoid MDR-TB and, even more so, XDR-TB because of the high costs of treatment • One of the market analyses (Applied Strategies) relies heavily on global XDR-TB to generate large revenue figures and NPVs from booster vaccine take-up (3X the NPV without) • Not clear how global XDR-TB feeds through to dictate prices and country decision-making processes • Given such heavy weight on global XDR-TB to drive large NPVs in some analysis, there seems little epidemiological and cost-effectiveness modelling of the impact of it

  46. Basic market and revenue frameworks • Discussion points: • What is the scientific basis of any probability of MDR-TB/XDR-TB • How should it be used in market analysis? • Why is Global XDR-TB modelled as having little impact on NPV of replacement vaccines, though it does for booster vaccines? • It seems that Global XDR-TB drives the biggest differences in levels of tiered pricing – but on what basis?

  47. Basic market and revenue frameworks • High-income high-risk groups: • We find repeatedly that the role of the high-income country and high-income high-risk groups still needs clarifying • Potentially, such markets could be important for tiered pricing strategies • Middle-income and private sectors discussion points: • What is the role of middle-income countries and the private sector in general? • Replacement vaccine discussion point: • What are the strengths and limitations in presuming that replacement vaccine will replace current BCG vaccine?

  48. Basic market and revenue frameworks • Cases of large NPV: • In some of the boost vaccine and global XDR-TB scenarios, NPVs are very large • Discussion points: • Is this realistic? • What happens if there are other interventions (drugs and diagnostics) ‘competing’ at the same time? • If the NPVs are truly that large, why does private investment not flood in and drive NPVs down? • If the problem is scientific uncertainty, and if the NPVs truly are that large, if a vaccine candidate gets through to stage III, should we not expect private investors to take it all the way to licensure? • Is something missing in this reasoning?

  49. Basic market and revenue frameworks • Efficacy and duration of protection of BCG vaccine discussion point: • Given that efficacy levels presumed in the various investment case materials are defined relative to BCG vaccine (and phrased that way in ‘willingness to pay’ questionnaires) how do we view these in the light of there being no consensus regarding the effectiveness or duration of protection of BCG vaccine, and the natural bias and the role of other factors in assessing those vaccinated and non-vaccinated individuals?

  50. Rate of adoption and mechanisms of uptake • Hep B is used in one market analysis as a template: Cumulative Number of Children Reached in GAVI-Supported Countries *projected Source: WHO/UNICEF

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