Potential approaches for the pricing of cancer medicines across Europe to enhance the sustainability of healthcare systems and the implications

Figures & data

Table 1. Summary of advantages and disadvantages of MEAs [adapted from Al-Omar et al, Antonanzas et al., Carlson et al., Hampson et al., Toumi et al., and Zampirolli Diaz et al. [46,48,86–89]]

Advantages
General	Provide access to new medicines where affordability is an issue and/or where there are concerns with the uncertainty of the effectiveness or cost-effectiveness of the new oncology medicine when introduced into routine use. Potentially improve prescribing in a more predictable, transparent and rational way to a defined patient population enhanced by subsequent monitoring of prescribing against agreed guidance, e.g. Italy and Sweden, and that agreed outcomes are being reached in practice [77,90–92] Offers flexibility in terms of the potential budget impact and value when considering new oncology medicines characterized by appreciable levels of uncertainty especially as more biological medicines are losing their patents, with the potential for payback mechanisms if outcomes and subsequent value are less than expected [48,86]
Financial-based schemes	Easier to implement than outcome-based schemes, helping to contain costs and keep expenditure within agreed limits. Potential for cross product agreements among Pharmaceutical Companies and health authorities to help keep annual expenditures within agreed limits Potential to improve the cost-effectiveness of new oncology medicines through lowering the incremental cost-effectiveness ratio (ICER)
Outcome-based schemes	Potentially provides new oncology medicines to patients including those most likely to benefit, e.g. CAR-T cell therapies among EU countries including future re-assessment of prices and/or rebates based on agreed outcomes in France, Germany, and the UK, with re-assessments of staged payments in Italy and Spain [93] Potentially incentivize R&D activities more than reimbursement and funding policies based on cost effectiveness criteria Provide additional ‘real-world’ evidence – especially important when new medicines are approved with limited Phase I and II data Can help consolidate the development of a set of meaningful data that can be routinely collected in busy oncology clinics to improve future decision making such as the CMOP program in Scotland [80] Potentially provide evidence about a new oncology medicine in different patient populations Can in time help to update guidelines within a country on appropriate medicine use as more data becomes available. Potential to prolong the time for capturing meaningful data on the effectiveness, safety and cost-effectiveness of a new oncology medicine in a more restricted environment with clinicians adhering to agreed protocols and no off-label use. As a result, more rapidly enhance the evidence base. This is increasingly important in the case of oncology medicines if initial data sets are based on surrogate markers such as progression-free survival rather than overall survival and impact on quality of life
Disadvantages
General	Whether countries are getting the optimal discount in reality and concerns with good governance [9] Volume agreements do not necessarily ensure the most appropriate patients receive the new medicine – the concomitant instigation of demand-side measures including prescribing against agreed protocols can help here In pertinent countries, patient co-pays will be higher in ambulatory care if co-payments are based on list rather than actual prices – balanced though against wholesalers, distributors and retail pharmacists typically paid on list rather than actual prices across countries Potentially higher administrative and transaction costs including the length of time for negotiations especially for outcome-based schemes, lack of expertise, and potentially a lack of regulations. In multiple-payer healthcare systems, data tracking is challenging when members move from one plan/insurance company to another. Early approval and funding via MEAs for new oncology medicines could potentially be considered by physicians and patients as improvements compared to current standards without necessarily being the case [34]
Financial-based schemes	Companies potentially asking for higher prices initially especially if they believe discounts are inevitable. The confidential nature of discounts and rebates could mean companies seek a high list price in a reference priced country, especially in a country with considerable economic power to negotiate good discounts, to the detriment of other countries with less economic power
Outcome-based schemes	Information collected in outcome-based schemes may not necessarily enhance the evidence base especially where there are concerns with trial design Patient accessibility may be compromised if the new oncology medicine is only available in a limited number of centers, and the temporary nature of certain agreements may make companies cautious about progressing with them. The confidential nature of data captured/privacy issues adds to the difficulties with transparency when analyzing the findings with typically strict criteria within health authorities for accessing patient level data under governance issues Issues of transparency are also important in discussions with patients about the temporary nature of any funding for new medicines under outcome-based MEAs. Concerns with the length of time of some outcome-based schemes – especially important in rapidly changing disease areas or where generics/biosimilars will become available by the time the outcome-based scheme is finished. Who pays for the cost of the oncology medicine during the evaluation period – seen as a particular issue with olaratumab [34] Health authorities may not always be fully compensated in payback schemes when the new oncology medicine is not as effective or cost-effective in routine clinical care as expected Possible difficulties at the time of finishing agreements to lower prices if pertinent to reflect the actual observed effectiveness in clinical practice if there is a reluctance among companies to reduce the prices of their patented medicines (especially in reference priced countries) alongside pressure from clinicians who have already incorporated the new medicine into their clinical protocols

Table 2. Multicriteria for assessing the value of targeted therapies for colorectal cancer [adapted from Hsu et al. [50]]

Dimension	Criteria
Clinical	Comparative efficacy – overall survival and progression-free survival (months) Overall safety, e.g. incidence of adverse events including severe adverse events and potential for drug:drug interactions Convenience (including length of treatment) and impact on health-related quality-of-life
Economic	Cost-effectiveness – incremental cost-effectiveness ratio (ICER) Number of patients – number of patients by indication who could potentially be treated Expenditure – overall expenditure (budget impact)
Society values	Degree of innovation – including likely approval times by the authorities Societal concerns and patient needs – including the extent of alternatives Experience/funding – Extent funded within other countries

Table 3. Criteria for assessing the value of therapies for prostate cancer [adapted from Angelis et al. [103]]

Dimension	Key criteria
Clinical (outcome)	Overall survival (months) Health-related quality-of-life (stable and progressive disease) – utility scores (EQ5D)
Clinical (surrogate)	Radiological progression-free survival (months) PSA response (%)
Clinical (side-effects, etc.)	Treatment discontinuation (%) Contra-indication (type)
Other clinical/value considerations	ATC level (mechanism of action) Experience – number of patients enrolled into Phase II and III trials for given indications Delivery posology
Economic	Medical costs/budget impact

NB: ATC = Anatomical, Therapeutic, Chemical'

Table 4. Key considerations when considering multi-indication pricing (adapted from Mestre-Ferrandiz et al. [114])

Key consideration	Implication
Incentives	Incentives need to be designed to encourage the collection and use of reliable data including indication data, e.g. in Italy it is in the hospitals’ interest to collect utilization data by indication as part of MEAs for new medicines [116,117]
Registries	Registries need to be improved and allow for the incorporation of real world evidence into reimbursement and funding decisions
Co-ordination	Co-ordination needs to be enhanced at all levels for effective systems. This includes the national level, but may also include the regional level data if there are already different prices for medicines across regions in a country There also needs to be co-ordination at the hospital level to monitor usage by patient and indication if this is linked to managed entry and other schemes
Transparency	There needs to be greater transparency regarding who actually benefits from such approaches as part of any future situation
Contractual pricing arrangements	Any contractual pricing arrangements need to be flexible in order to take account of any new evidence surrounding existing and new indications as well as changes in the prices of medicines being used to treat that tumor and stage. This is especially important if pertinent medicines become available as low cost multiple sourced medicines or biosimilars
Modeling the impact of differential pricing approaches	There is also a recognized need for further research to help model the potential budget impact of differential pricing especially if this leads to lower overall expenditure If subsequently greater expenditure – how can this be equitably and transparently shared between payers and pharmaceutical companies with companies seeking to maximize prices for each indication [109]

Table 5. Key information and analysis requirements needed in order to apply a fair pricing framework [adapted from Moon et al. [119]]

Factors to consider	Information and analysis requirements
Sellers (including those conducting R&D as well as the manufacturers/companies)
Cost of R&D	Typically this information is not disclosed and is contentious to estimate as seen by appreciable differences in published sources for bringing new medicines to the market ranging from US$200million and US$2.9billion [9]
Cost of manufacturing and distribution	Generally this information is not disclosed although it is seen as feasible to estimate and usually disclosed in competitive markets as seen by some of the low costs for generics and biosimilars and other estimates of production costs [26,28,122,123]
Fair profit	Typically aggregate profits are disclosed by companies but these are typically not product specific Such activities will typically entail a judgment as there have been concerns among health authority personnel that companies typically set prices for new medicines for cancer and orphan diseases based on previous benchmarks and what they feel are attainable prices irrespective of the health gain involved [8,124–127]
Other costs including registration, administration and pharmacovigilance	Again, usually such information is typically not disclosed by companies but is feasible to estimate based on previous benchmarks
Buyers (including health authorities and patients)
Affordability of new medicines	Additional analytical work will generally be required to identify concrete affordability ceilings for health authorities and patients given concerns with ever increasing prices for new cancer medicines and those for orphan diseases [7,126,128]
Value to health systems across continents	HTA can contribute to such analyses [129]. However, different methods may be needed to fully incorporate the benefits and value of new medicines for cancer into future pricing considerations given affordability constraints that exist within countries, especially LMICs. Willingness-to-pay studies have been conducted among the public in Brazil to help establish possible prices for new vaccines serving as potential benchmarks [130,131]
Supply security	Information on potential volumes and producers (for multi-sourced products) are needed to maintain competition and supply for specific products, which such data seen as feasible to collect. This is because supply shortages are becoming a key issue across countries [132]

Table 6. Potential parameters proposed by the International Association of Mutual Benefit Societies (AIM) for pricing considerations for new medicines [43] as well as by Uyl-de Groot et al. for new oncology medicines [44]

Potential parameters AIM Model

Potential considerations model of Uyl-de Groot et al.

R&D costs – a lump sum of €250 million for each new medicine. Higher amounts if these can be justified using a specific approved methodology (incorporating issues such as expenses incurred minus sponsor/government money, costs of failure and buyouts) up to a total amount of €2.5 billion Amount of R&D allocated to Europe (which represents 42% of the population of the main markets for new innovative medicines) Target population, i.e. whether ultra rare, rare, or for a chronic disease treatment rate, market share, and likely duration of treatment Whether a new indication or the 2nd or 3rd indication Alternatives for the same indication, i.e. are there already alternative medicines on the market or will this new medicine be a first in the class Production and overhead costs Sales and marketing costs – 20% of R&D costs will be allowed and gradually reduced Basic profit of 8% based on the upper range of returns in risky industries Innovation bonus ranging from 5% to 40% depending on the expected added therapeutic value of the new medicine versus current standards Differential price depending on issues such as GDP per country

R&D costs incorporating medicines that have been abandoned during their development (attrition rate) Costs including manufacturing, sales and marketing and overheads A profit margin linked to the level of clinical benefit versus current treatments to stimulate innovation based on for instance ASCO and ESMO criteria which are linked to the length of additional survival and other key parameters, e.g. 20–40% margins The envisaged number of patients likely to be treated with the new medicines The length of patent (years) after registration

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