Food for Thought: Greek Ghosts Haunting Pharma

Up to the end of 2010, pharma companies were able to set the price for innovative new medicine at will upon introduction to the German market. Under the new AMNOG law, however, the price is dependent on the degree of innovation, as assessed by G-BA (Federal Joint Committee). G-BA requires pharma and biotech companies to provide information on medical benefits and advantages as compared to existing medicines across all indications the drug is approved for, and statistics on the (sub)sets of patients who will benefit from the drug. In addition, they have to provide spending figures of the statutory healthcare system and need to explain how quality can be assured during treatment.

G-BA can mandate the Institute for Quality and Efficiency in Healthcare (IQWiG) with the assessment (to make matters more complex, IQWiG can assess drugs and treatments also without assignment by G-BA) and once it has come to a conclusion, it needs to call for opinions of all parties (manufacturers, reviewers/experts, head organizations of patient/self-help groups and medical associations, etc.) – written statements as well as hearings.

If at the end of the process G-BA comes to the conclusion that the respective drug does not provide additional benefit, the medicine is subject to reimbursement under Germany’s fixed-price system and will be reimbursed in the price range of drugs already marketed in the same indication(s).

However, if the new medicine is ruled innovative, the bazaar is open: lobby groups of the pharmaceutical industry, including generics manufacturers, start debating with G-BA and representatives of the statutory healthcare system. The interesting part of this procedure is that pharma companies have to provide data on the selling price in “other European countries”.

But which are these “other” countries? With the European debt crisis, the debate has become heated: while manufacturers demand to select countries with similar economic power as comparators (such as France or UK), the statutory healthcare insurers are advocates of including Europe’s weakest economies: Greece, Portugal, The Czech Republic, Slovakia, etc. To resolve the problem, an arbitration board was founded.

Since last week, the jury is out, and it is not in favor of manufacturers. The arbitration board selected 15 European countries as reference countries for price fixing. The list comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Greece, Ireland, Italy, The Netherlands, Portugal, Sweden, Slovakia, Spain, and the UK. At least five of them are economically weak countries with low drug prices.

The ruling will have consequences not only for Germany. If, as a result, prices for innovative medicines in Germany come down, prices elsewhere in Europe might follow as Germany is a reference country for pricing in many other European countries. To avoid a downward spiral, manufacturers may choose to introduce novel innovative drugs in Germany only with a considerable delay.

Food for Thought: Innovation on Trial

Germany’s new Law on the Reorganization of the Pharmaceutical Market (AMNOG), which came into force January 1 this year, has substantially changed the rules for the introduction of new medicines on the German market. The akampioneer already has reported on the novel regulations and procedures – now it is time to look at the consequences AMNOG has had already.

Since the beginning of 2011, 18 dossiers for the required benefit assessment have been filed with the Federal Joint Committee G-BA, the highest decision-making body of the joint self-government of physicians, dentists, hospitals and health insurance funds in Germany. G-BA is then assessing the “additional patient-related benefit” of a novel drug, either itself or by assigning Germany’s Institute for Quality and Efficacy in Health Care (IQWiG). If G-BA identifies an additional benefit, the umbrella organization for the statutory health insurance funds and the pharmaceutical company negotiate the reimbursement price as a discount on the original selling price within six months. If negotiations fail to reach an agreement, an arbitration commission defines the reimbursement price using the European price level as a standard.

Most cases are still pending. In one of the 18 cases (the statin pitavastatin marketed by Merckle Recordati in Germany) , the manufacturer itself requested the drug to become reimbursed under the fixed price system. In two cases, marketing was halted in Germany by the manufacturer following a negative G-BA assessment: Boehringer Ingelheim and Eli Lilly decided not to market linagliptin, a DPP4 inhibitor for the treatment of type II diabetes; the companies think G-BA chose the wrong therapy for comparison and assessment of the additional benefit.

Novartis removed Rasilamlo from the market, effective September 1. The oral drug is a combination of aliskiren and amlodipine, which was approved in April this year for the treatment of high blood pressure patients not adequately controlled by either aliskiren or amlodipine alone. The company could not get to terms with G-BA on the data required for the assessment of the additional patient-related benefit.

The decision not to market a drug in Germany if the assessment is negative and the setting of a low price is imminent certainly reduces sales; on the other hand it prevents the setting of a lower price in other European countries that use Germany’s drug prices as reference.

The first completed assessment regards AstraZeneca’s platelet aggregation inhibitor ticagrelor, which was approved in December 2010 for the prevention of thrombotic events in patients with acute coronary syndrome or myocardial infarction with ST elevation, and is intended to be used in combination with acetyl salicylic acid (ASS). G-BA had assigned IQWiG with an assessment that deviated from the design of the studies used for approval and from the comparator therapy G-BA originally had agreed upon with the manufacturer. For approval, the drug had been compared to clopidogrel (plus ASS). IQWiG, however, defined subgroups and compared ticagrelor plus ASS with clopidogrel plus ASS in patients with unstable angina pectoris and myocardial infarction (with and without ST elevation) and prasugrel plus ASS as a comparator for patients with ST elevation, which had received a coronary bypass or a percutaneous coronary intervention (PCI) .

As a result, G-BA ruled that the drug has an additional benefit only in patients with myocardial infarction without ST elevation and in patients with unstable angina pectoris. In these cases, G-BA sees a moderate additional benefit. IQWiG had stated that the data provided by the manufacturer to support efficacy in patients with ST elevation did not sufficiently prove additional benefit in this subgroup.

While it certainly is a good idea to ask whether a novel drug not only meets regulatory requirements but also translates into patient benefit, the process of assessing this benefit and the degree of improvement as compared to existing therapies is a mess in Germany.

One important point is transparency. The crucial selection of the comparative therapy for the assessment takes place behind closed doors in G-BA’s pharmaceutical subcommittee. G-BA does not  even disclose the subcommittee’s members – however, it is known that the members are picked from the National Association of Statutory Health Insurance Physicians and from the Statutory Healthcare System. The cheaper the comparative therapy chosen, the bigger is the hurdle to meet the cost/benefit ratio.

Second, as compared to the NICE procedure in the UK as an example, manufacturers are not involved in the process once it has started (except that they may be asked to submit more data), and  if they are not happy with a decision the only possible procedural intervention is taking G-BA to court. Otherwise, they may wait for a year after which they can file an application for submitting novel data – which may be granted by G-BA or not.

Third, it is often very difficult to prove an additional benefit of an innovative medication immediately – except maybe for an antibiotic. Therapies for chronic diseases lead to measurable improvements often in the long or medium run only, and regulatory studies often are not large or long enough to meet the strict “evidence-based” criteria of IQWiG and G-BA. In addition, elderly patients often suffer from multiple diseases, making an assessment even more difficult.

Last not least, for the reference price system the devil is in the details. Will all European countries, including the poor economies of the former communist countries in Southeastern Europe, be included – or only the richer economies of the old European heartland?

All in all, the new regulations already have led to a slowing-down of novel drugs reaching the German market – a development that IQWiG’s new director Juergen Windeler in a recent interview declared as “expected”. He might as well have said “welcomed” as he added that of the about 60,000 drugs on the market in Germany, 95% were dispensable: “Experience shows that good medical care is possible with 2,000 to 3,000 drugs only.”

Food for Thought: In the Health Care Sector, Who Should Choose Which Treatment Is Best?

The healthcare sector is under scrutiny in major developed countries across the globe. Some nations, like the UK and Germany, have already developed strict guidelines to determine the effectiveness of therapeutics and medical technologies, which must undergo comprehensive cost-benefit analyses as a pre-requisite for reimbursement. You can read more information about European regulations, especially German efforts, in our previous articles about the German Drug Reimbursemend Law AMNOG.

While cost-cutting is not as important in the U.S. healthcare system (yet), the emphasis on so-called comparative effectiveness research (CER), which is to assess the most effective treatment options for a patient,  has become undisputed.

An article in Knowledge@Wharton examines the pros and cons of CER efforts worldwide, stating that  “while not specifically designed to address health care costs, CER could ultimately lead to changes in the ways people seek medical treatment, the development of innovative remedies and other trends within the industry that could impact costs.”

Wharton healthcare management professor Scott E. Harrington takes an even more critical view: “The fear is that significant government involvement in CER will give rise to some form of restrictions on access to care [or to] particular treatments based on research studies and bureaucratic decision-making,” he says. “It might not be tied to what people want to have and what they are willing to pay for.”

On the other hand, if properly applied in both the state-funded and private healthcare sector, CER may incentivize biopharmaceutical and medical device companies to invest even more money into first-in-class or best-in-class innovative treatments by granting special patent protection and market access.

Knowledge @Wharton: In the Health Care Sector, Who Should Choose Which Treatment Is Best?, March 2011

Food for Thought: Future Reimbursement of Novel Cancer Drugs in Germany

Germany’s new law regulating the reimbursement of drugs, the so-called Arzneimittelmarktneuordnungsgesetz – AMNOG, requires companies planning to introduce a novel drug to the German market to provide a value dossier, if they want reimbursement of the full price for the first year of marketing (See the akampioneer, “Germany’s New Reimbursement Law“). This value dossier not only needs to demonstrate efficacy and safety, but also has to provide evidence that the drug is more advantageous to existing treatments in terms of patient-relevant endpoints such as morbidity, mortality and quality of life.

This is difficult to prove as many novel cancer drugs are approved on the basis of surrogate endpoints such as slowing or stopping cancer growth (objective response rate ORR, time to tumor progression TTP, time to treatment failure TTF or progression-free survival PFS).

Late last month, Germany‘s Institute for Quality and Efficiency in Health Care (IQWiG) has published details on how it is going to evaluate the patient benefit in these cases. IQWiG usually is evaluating drugs on behalf of the so-called Gemeinsamer Bundesausschuss G-BA (Federal Committee), a decision body within Germany´s statutory healthcare system.

In cancer, IQWiG plans to primarily address „the question as to whether a therapy can prolong the life of affected patients. In addition, a new therapy should alleviate symptoms, prevent complications, and improve quality of life.“ If surrogate endpoints have been used for approval, IQWiG will only accept them as evidence for patient benefit, if the validity of these endpoints for demonstrating patient benefit can be proven by correlation-based approaches based on randomized controlled trials.

In a 160 page „rapid report“ (available in German only) IQWiG details its approach to search available literature for studies on the correlation between surrogate and patient-relevant endpoints. In addition, it describes how it is performing a meta-analysis of these studies for assessing the strength of the correlation (three levels) and the reliability of the validation studies (four levels) to reach an overall conclusion about the validity of the surrogate endpoint for a decision whether the new drug is providing patient benefit.

While the institute so far has only differentiated between „proof“ of surrogate endpoint validity and „indication“ of validity (meaning medium reliability), it proposes to introduce a third category called „hint“ for the fulfillment of certain minimal requirements for the available studies. This category will be applied in cases where the validity of a surrogate endpoint is unclear – a situation IQWiG expects to be quite common. In these cases, IQWiG states, „it can also be taken into account how strong the effect of a treatment turns out to be“. IQWiG would then seek to find a threshold value for the surrogate marker and evaluate whether the new treatment exceeds this value, e.g. whether it decelerates tumor growth for longer than a specified period of time.

Last not least, IQWiG appeals to drug makers and study groups to make accessible their analyses on the validity of surrogate endpoints and the specification of threshold values, e.g. in special registries.

A short English summary of IQWiG‘s basic assumptions on how to recognize at an early stage whether a new cancer therapy prolongs life can be found here. IQWiGs proposals for the early benefit assessment of cancer drugs can be read, also in English, here.

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