Download How can value be measured and valued?

Dávid Dankó, PhD, MSc
Corvinus University of Budapest
Institute of Management
d id d k att uni-corvinus.hu
david.danko
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i
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How can value be measured and valued?
ISPOR 5th Asia-Pacific Conference, Taipei, 2 September 2012
Pharmaceutical innovation:
underlying dilemmas in the early 21st century
Innovation content of new active
substances introduced between
1975 and 2002
•
Real therapeutic breakthrough
has become extremely rare
•
Innovation seems to be biased
towards „sellable” therapy
areas, while other areas are
largely neglected
Therape
eutic
value
e
Chemical structure
Provides
progress in
ttreatment
eat e t
Does not
provide
progress in
treatment
New
Already
known
•
BUT policy backlashes against
some forms of innovation
143
295
•
((10%))
((18%))
201
821
More and more new
substances cause
di
disappointment
i t
t iin real-life
l lif
settings
(14%)
(56%)
•
The business model of the
pharma industry is
undergoing a slow but
thorough transformation
SOURCE: BARRAL, P.E. [2004]: 28 ans de résultats de la recherche
pharmaceutique dans le monde 1975-2002. IRDES, Párizs
© Dávid Dankó
How can innovation be measured and valued?
Taipei, 2 September 2012
(2)
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Health technology assessment as a tool to assess value
Health technology
gy assessment ((HTA)) covers all methods for
 the systematic evaluation of the comparative value of
pharmaceutical products and other health technologies
 linked to pricing & reimbursement decisions by public and private
payers
 preceding to admission to the reimbursement formulary and during
formulary management.
© Dávid Dankó
How can innovation be measured and valued?
Taipei, 2 September 2012
(3)
A definition from practice: HTA is much more than QALY’s and ICER’s!
Health Technology Assessment (HTA)
is the scientific evaluation of medical
technologies regarding their
effectiveness, appropriateness,
efficiency as well as social and ethical
aspects and implications.
HTA is bridging the gap between the worlds of
Science and Politics. In times of general health
budget restrictions, HTA becomes more and
more important by providing political decisionsmakers with timely, accurate and sound
information on medical technologies.
© Dávid Dankó
How can innovation be measured and valued?
Taipei, 2 September 2012
(4)
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Three main paradigms for HTA
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ECONOMIC
EVALUATION
 Based on pharmacoeconomics
 Strict quantitative methods
applied by dedicated HTA agency
 Attempt to arrive at two economic
indicators: ICER, budget impact
 Cost-effectiveness linked to
explicit or implicit threshold
QUALITATIVE
ASSESSMENT
2
3
BALANCED
ASSESSMENT
 Similarity with regulatory approaches
 Synergies between economic
 Mainly qualitative methodologies based evaluation and qualitative assessment
on collective decision-making
decision making
 Mainly collective decision-making
decision making,
which is retraceable and publicly
 No attempt to arrive at ICER: scoring is
accessible
often used, classification is a priority
 Consideration of non-financial aspects
 Cost-effectiveness is one input to a
classification /scoring algorithm
& broader societal impact
 Wide consideration of non-financial
 Supported by structured review
aspects & broader societal impact
UK
© Dávid Dankó
NZ
PL
HU
F
I
How can innovation be measured and valued?
J
CH
S
CAN
AUS
Taipei, 2 September 2012
(5)
Criticism towards economic evaluation –
is it really able to capture value?
Debate around acceptable ICER cutoff point or range
Too much technicism, hard-tounderstand
Pseudo-objectivity
Legitimation role and business
Pricing effect and perverted
incentives
Costliness and capabilities
PUBLIC BACKLASH & SHIFT AWAY FROM ONE-SIDED ECONOMIC EVALUATION
© Dávid Dankó
How can innovation be measured and valued?
Taipei, 2 September 2012
(6)
3
Overview of qualitative value assessment criteria used in current
international practice
Australia
Better pharmacokinetics
Budget impact
Clinical efficacy
Clinical trial
Cost-effectiveness
Cost
effectiveness
Currently untreated disease
Depth of action
Industrial policy
Logistics costs
Market size
New mechanism
Orphan disease
Patient equality
Place in therapy landscape
Public health significance
Relative price
Second-line therapy
Severity of disease
Side effect profile
Technological innovation
Therapeutic value
France
Italy
X
Japan
X
Spain (implicit)
X
Sweden
X
X
X
X
(X)
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
SOURCE: OWN COMPILATION
Different systems weigh elements differently, and no system covers all elements.
Focus is sometimes missing. Assessment criteria used in different countries may
cover similar concepts under different terminology.
© Dávid Dankó
How can innovation be measured and valued?
Taipei, 2 September 2012
(7)
Straightening it out:
possible framework for a redundancy-free, balanced system
Unmet need
(urgency)
Costeffectiveness
Budget
impact
Therapeutic
value added
Explicit local
policy priorities
More
favourable
side effect
profile
Therapeutic
value added
Szöveg
Stronger
adherence to
treatment
Higher
effectiveness
(degree of
p
)
response)
 Cost-effectiveness is necessary but
not sufficient for drug reimbursement
 Therapeutic value added is measured
SOURCE: OWN COMPILATION
along 4 factors
 Health policy priorities help decide
between therapy areas
© Dávid Dankó
How can innovation be measured and valued?
Taipei, 2 September 2012
(8)
4
Institutional background in middle-income countries
•
Several payers, complex decisionmaking processes
•
Intuitive, rather than analytical,
decision-makers at political levels
•
Budget impact focus, emphasis on
financial aspects
•
•
Questions around the practical
applicability of economic
evaluation
CAPABILITY GAP,
„institutional cost-effiency”
© Dávid Dankó
How can innovation be measured and valued?
Rational free-riding:
Peering on selected
international assessment
Simplified local evaluation:
Very focused, pragmatic local
assessment
Regional shared service
centres for value
assessment?
Taipei, 2 September 2012
(9)
Some preliminary suggestions
There is considerable variation in HTA systems all around the
world, with tendencies toward balanced assessment frameworks.
Economic evaluation has challenges in middle-income countries.
Blindly following the track which Central Europe followed in the
past few years is not helpful.
When developing a system, both the logic and process are crucial.
© Dávid Dankó
How can innovation be measured and valued?
Taipei, 2 September 2012
(10)
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財團法人醫藥品查驗中心
Center for Drug Evaluation
How can innovation be measured and How
can innovation be measured and
valued?
Experience from Taiwan
Jasmine R. F. Pwu, PhD
Division of HTA, CDE
Taiwan
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Disclaimer
The views presented in this presentation do not Th
i
t d i thi
t ti d
t
necessarily reflect those of the CDE
財團法人醫藥品查驗中心
Center for Drug Evaluation
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About Taiwan
• Population – 23 million – Aging society
• Parliamentary democracy • 2011 GDP per capita (nominal) ‐ US$21,832 (PPP, IMF) : US$ 39,245
財團法人醫藥品查驗中心
Center for Drug Evaluation
Health Care
• Total health expenditure ‐
p
6.9% of GDP
• National Health Insurance
–
–
–
–
Introduced 1995
Mandatory, single‐payer social health insurance Comprehensive
Low premium & low co‐payment
財團法人醫藥品查驗中心
Center for Drug Evaluation
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財團法人醫藥品查驗中心
Center for Drug Evaluation
Well recognized,…
By friends…
Within ourselves…
“The initiation of the National Health Insurance, Is the first time in our history,
that people dare to be sick,
can afford to be sick,
can be sick without any feelings of guilt
can have any kind of illness”
Po‐Yang
財團法人醫藥品查驗中心
Center for Drug Evaluation
…yet with challenges
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Pre‐negotiated, fixed NHI expenses
NHI medical and drug claims (NT$ billion)
財團法人醫藥品查驗中心
Center for Drug Evaluation
HTA has played a role in New Drug Application…
財團法人醫藥品查驗中心
Center for Drug Evaluation
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Consideration factors for listing
Regulatory body
• Safety
• Efficacy
BNHI
• Comparative effectiveness
C
ti
ff ti
• Budget impact
• Cost‐effectiveness • Ethical/Law/Social/Political Impact
財團法人醫藥品查驗中心
Center for Drug Evaluation
Decisions made during DBC meetings
• Listing or not
Li ti
t
• Reimbursement price
• Reimbursement criteria/restrictions
b
/
財團法人醫藥品查驗中心
Center for Drug Evaluation
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Categories for New Drugs
Category 1
Shown substantial improvement in effectiveness, comparing to the best ff i
i
h b
currently‐used drug (therapy)
Category 2A
Shown moderate improvement Category 2B
Shown similar clinical values
財團法人醫藥品查驗中心
Center for Drug Evaluation
Price decision
Submission Submission
price
New Drug category International prices
Reimbursement price
Comparators
Restriction in Restriction
in
use
財團法人醫藥品查驗中心
Center for Drug Evaluation
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Listing Review Process with HTA
Application received
Evi‐
dence
Principal reviewers made written recommen‐
dations
Nominate 2+ DBC members as principal reviewers
DBC meetin
g
Assessment Report in 42 days
財團法人醫藥品查驗中心
Center for Drug Evaluation
Listing Review Process
Application
Received
d
42 Days
Effectiveness
Economic
+
Assessment
Assessment
=
Evidence
Report
Drug Beneficiary Committee
財團法人醫藥品查驗中心
Center for Drug Evaluation
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More like “Qualitative Assessment”
• Clinical effectiveness is the key!
Cli i l ff ti
i th k !
– Treatment effectiveness
– Safety
– Convenience
財團法人醫藥品查驗中心
Center for Drug Evaluation
Qualitative value assessment criteria
Taiwan
Better pharmacokinetics
Budget impact
X
Clinical efficacy
X
Clinical trial
X
Cost-effectiveness
?
Currently untreated disease
X
Depth of action
Industrial policy
Logistics costs
X
Market size
New mechanism
Orphan disease
?
Patient equality
py landscape
p
Place in therapy
X
Public health significance
Relative price
X
Second-line therapy
Severity of disease
Side effect profile
X
Technological innovation
Therapeutic value
X
財團法人醫藥品查驗中心
Center for Drug Evaluation
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CEA is under development
• More and more accepting
M
d
ti
• Not mandatory now
– Incentive for doing local PE
• Still need acceptance, mostly from decision makers
財團法人醫藥品查驗中心
Center for Drug Evaluation
Challenges
• All potential values considered?
All t ti l l
id d?
• New Act, new process, new value system?
• CEA could be helpful, but should be used with care
財團法人醫藥品查驗中心
Center for Drug Evaluation
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財團法人醫藥品查驗中心
Center for Drug Evaluation
Thank you for your attention!
RECOGNIZING AND REWARDING HEALTHCARE INNOVATION THE HEALTHCARE INNOVATION‐
THE
SINGAPORE EXPERIENCE
Dr Jeremy Lim
CEO Fortis Colorectal Hospital, Singapore
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ABSTRACT
• Despite the plethora of ‘Level 1 evidence’, many health systems struggle with effective recognition and implementation of healthcare improvements and innovations. The reasons are complex and include incongruent healthcare financing measures, cultural difficulties in transplanting practices and lack of skilled manpower to implement i
innovations.
ti
• Singapore has established a Health Services Development Program (HSDP) to address the ‘real‐world’ challenges of national implementation. Through the Program which adopts a system level “PDSA” (Plan, Do, Study, Act) approach, Singapore pilots a healthcare innovation in a limited manner, learning what works, what does not work and what needs to be localized, before deciding on whether and how to scale nationally. The HSDP initially focused only on clinical implementation but has since evolved to address also pricing and operational roll‐out challenges such as incenting wider adoption.
d
d
• This presentation discusses why innovation diffusion and adoption are so difficult in the healthcare setting. It also shares the experience of the Singapore HSDP and offers lessons, both positive and negative, learnt which may be applicable to other health systems.
Evidence to Practice
• Harmful effects of radiation of fetuses
– 1956: Oxford‐based epidemiologist Alice Stewart demonstrated, that the chances of childhood cancer were vastly increased by X‐raying pregnant mothers. – 1971: practice was abandoned by medical establishment • "threshold theory“
• Opposition by Britain's foremost epidemiologist of the time, Richard Doll
16
PARiHS framework (Promoting Action on Research Implementation in Health Services)
The PARiHS
The
PARiHS framework framework
proposes that successful implementation of evidence into practice is a function of three broad interactive elements (evidence, context, and facilitation). 17
Singapore
710 sq km
5.2 million inhabitants, 3.3 million citizens
GDP per capita S$50,123 , 11th in the world
FUNDAMENTALS OF THE HEALTH SYSTEM
• Co‐payment and Personal Responsibility
–“The
The Singapore health care delivery system is based on individual responsibility, coupled with Singapore health care delivery system is based on individual responsibility, coupled with
Government subsidies to keep basic health care affordable. Patients are expected to pay part of the cost of medical services which they use, and pay more when they demand a higher level of services. The principle of co‐payment applies even to the most heavily subsidised wards to avoid the pitfalls of providing "free" medical services.”
• Explicit Rationing
–“The basic medical package will reflect good, up‐to‐date medical practice, which is cost‐effective and of proven value. But it will not provide the latest and best
p
p
of everything. The treatment will be y
g
delivered without frills by trained personnel using appropriate facilities.”
• “Muscular state” but strong role of market
–Government influences through regulation and payment
–Mechanisms to enable market to function
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PHARMACEUTICAL MANAGEMENT
• “Clinically relevant and cost effective drugs that are considered as basic therapies and essential for management of common diseases afflicting the majority of the patients”
• Means tested subsidies
• Expensive drugs that are not in the Standard Drug List but have been assessed to be clinically necessary,
• Clinical controls to assess the eligibility of the patients and to ensure that the drugs prescribed are clinically necessary
• Freely available for sale in public and private hospitals
• No subsidies available
Standard Drug List
Medication Assistance Fund
Non‐Formulary Drugs
Qualitative value assessment criteria
Singapore
Better pharmacokinetics
Budget impact
X
Clinical efficacy
X
Clinical trial
Cost-effectiveness
X
Currently untreated disease
Depth of action
Industrial policy
Logistics costs
Market size
New mechanism
Orphan disease
Patient equality
Pl
Place
in
i therapy
th
landscape
l d
Public health significance
X
Relative price
Second-line therapy
Severity of disease
Side effect profile
Technological innovation
x
Therapeutic value
x
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HEALTH SERVICES DEVELOPMENT PROGRAMME
• Established in 2001; S$15 million funding per year
• Three categories of new health services are funded:
– New cutting‐edge medical technology
– Advanced and costly treatments
– Major augmentations of existing management Major augmentations of existing management
capability for key diseases
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COCHLEAR IMPLANTS (2001)
COMMUNITY PODIATRY (2003)
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ENDOBRONCHIAL ULTRASOUND (2007)
SUMMARY
• HSDP
– Evidence: Review E id
R i
built into selection process
– Context: Clinical champions and advocates; leadership support
– Facilitation: ‘Real world’ piloting and learning
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