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Investigating Myths about European
Pricing and Market Access
New York, October 17, 2014
New York Life Sciences
Marketing and Strategy Forum
Paris Office
Robert Dumitrescu, Partner
Julia Hummelt, Director
17, Square Edouard VII,
75009 Paris France
Tel. +33 1 56 69 23 90
[email protected]
Boston office
One Canal Park
Cambridge, MA 02141, USA
Tel. +1 617 231 4500
[email protected]
www.simon-kucher.com
Overview of today’s presentation
Goal:
 Get up to speed on some new
developments in Europe
 Understand how EU pricing and
market access (P&MA) is different
from the US
“… ….. ..
….. .. ….”
What’s the plan?
 We present the myth
 We have a vote
 We present some facts and figures
 We solve
We want this to be interactive,
so please feel free to
participate, ask questions, etc.
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 1:
Do you believe it’s true?
“Price potential
in Europe is always
lower than in the US”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Looking at some examples, the myth begins to ring true
% premium of US average price over EU average price
$8.00
Chronic obstructive
pulmonary disease
244%
$7.22
WAC / ex-manu. price per day in $
$7.00
Pulmonary arterial
hypertension
100%
88%
Renal cell cancer
Non-small cell lung
cancer
Castration-resistant
prostate cancer
Example within diabetes - Januvia (sitagliptin):
US prices vs. selected EU prices
278%
Diabetes
79%
49%
$6.00
350 to 360%
$5.00
$4.00
$3.00
$2.00
100%
200%
$1.62
$1.74
FRA
GER
UK
$1.00
$US
0%
$1.60
300%
Source: Simon-Kucher & Partners. Project experience. WAC for US, ex-manu for EU-5.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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The main reason is that the pricing and access “obstacle
course” is getting tougher in just about every EU market
Payers are creating new and unpredictable mechanisms, and manufacturers are having a difficult time
navigating them to achieve favorable pricing and access conditions.
NICE/SMC review and
patient access schemes
H2H studies, costeffectiveness, potential
implementation of the ITR1
UK
France
Germany
AMNOG2
Spain
Therapeutic
Positioning Reports
and dual pricing
… and new reforms may be on the horizon
Source: Simon-Kucher & Partners. 1ITR: relative therapeutic index. 2AMNOG: Arzneimittelneurodnungsgesetz.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Example: Germany, once the lone holdout of free pricing,
became a price-controlled market in 2011
The AMNOG reform has been in place since 2011; the objective is to agree on a “fair price”.
Benefit
assessment
Launch
6 months
Ex factory price freely
set; manufacturer
needs to submit a
value dossier
Launch of
new drug
or drug
with new
indication
Early benefit
assessment
- Formal
evaluation
by IQWiG
- Final verdict
by G-BA
Additional
benefit vs.
comparator?
Price
negotiations
6 months
Price
negotiations with
GKV-SV
Agreement?
(umbrella
organization of
all sick funds)
Price no higher
than
comparator
OR
reimbursement
limit (FRP)
Germany
Decision
3 months
Discount is
valid from
month 13
after launch
Decision via
arbitration
board
NOTE: Simplified process
that applies in most cases,
but not all!
Source: Simon-Kucher & Partners. BMG. G-BA.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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In addition, payers are becoming even more creative
when current cost-containment measures are insufficient
Sovaldi’s price and budget impact have triggered controversial ad-hoc mechanisms in several countries
in Europe, including some dramatic threats.
Sovaldi example
France
Proposal to create special one-off law to
cap expenditure on all HCV drugs to
450m€ in 2014 and 700m€ in 2015
Italy
Further proposals to unilaterally set price
or even to compulsory license (!)
Germany
G-BA chairperson mused whether a
retrospective rebate should be applied
for year 1 of sales
Pricing negotiations still pending
EU
Reimbursed, but only for the first 30,000
most severe patients with advanced
cirrhosis
Rumored 50% discount vs. list price
Spain
Price cap of 124m€ in its first year, and
hidden discount bringing the price to an
estimated €25,000 per patient
Number of treated patients may therefore
be as low as 5,000
14 EU countries signed a “joint initiative" intended to put pressure on Sovaldi and other HCV
therapies to temper price demands (driven by France)
This is the first time European markets have jointly and publicly announced their intention to drive
down the price of a drug
Source: Simon-Kucher & Partners. Depeches APM. El Global. Sanita.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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On the other hand, many orphan drugs have similar prices
in the EU and US
This also holds true for some recently launched therapies such as VPRIV, Kalydeco, and Lojuxta.
Comparison EU5 vs. US prices – Orphan drugs
2,500 €
2,000 €
1,500 €
1,000 €
500 €
0€
VPRIV
Cerezyme
Elaprase
France
Germany
Naglazyme
Italy
Spain
Kalydeco
UK
Soliris
Lojuxta/Juxtapid
US
Source: Simon-Kucher & Partners. Prices from October 2014. Average exchange rates from the year preceding October 12, 2014. Doses shown: VPRIV/Cerezyme: 400 units. Elaprase/Naglazyme: per mg.
Kalydeco: 150mg. Soliris: 100mg. Lojuxta/Juxtapid: 5/10/20mg. Prices shown: France: ex-manu. Germany: net ex-manu including 15% discount on Cerezyme and 4% discount on all others. Italy: net ex-manu
including 5+5% discounts. Spain: net ex-manu including 4% discount. UK: NHS price.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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And for generics, prices are sometimes even lower in the
US than in Europe
Clopidogrel
Venlafaxine
Pantoprazole
1800%
300%
600%
150%
100%
50%
0%
500%
1400%
1200%
1000%
800%
600%
400%
200%
0%
EU ex-manufacturer prices per
tabletin relation to US WAC price
200%
EU ex-manufacturer prices per tablet
in relation to US WAC price
EU ex-manufacturer prices per tablet
in relation to US WAC price
1600%
250%
400%
300%
200%
100%
0%
Source: Simon-Kucher & Partners; US: https://pricerx.medispan.com; FRA: http://www.codage.ext.cnamts.fr; GER: https://www.lauer-fischer.de; SPA: https://botplusweb.portalfarma.com;
UK: http://www.mims.co.uk
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 1:
What’s the verdict?
“Price potential
in Europe is always
lower than in the US”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 2:
Do you believe it’s true?
“Target prices are
only attainable with
an innovative
contract”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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In some markets for some indications innovative
contracting is a must — Example: Oncology in Italy
Italy
Examples of contracting schemes for oncology drugs in Italy
Jevtana
Payment by result
Cost ceiling
Cost sharing
Risk sharing
Halaven
Mozobil
MabThera
Zevalin
Torisel
Removab
Tarceva
Herceptin-GC
Tyverb
Votrient
Tasigna – 2nd l.
Velcade
Mepact
Arzerra
Zelboraf
Torisel
Erbitux - CRC
Javlor
Votrient
Afinitor - BC
Nexavar
Alimta
Vidaza
Yondelis
Caprelsa
Avastin
Yondelis
Afinitor - RCC
Xgeva
Zytiga
Revlimid
Vectibix
Iressa
Erbitux - HN
Tasigna - 1st l.
Yervoy
2008
2009
2010
2011
2012
2013
Source: Simon-Kucher & Partners. AIFA. Press releases.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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In other markets, there was a short boom but then interest
tapered off — Example: UK
UK
Risk sharing
agreement for
Velcade (2007)
Coverage with evidence
development for 4 MS
drugs (2002)
“MS drug risk-sharing
scheme ‘a costly failure’.”
Pharmatimes, 2010
Risk sharing
agreement for
Lucentis (2008)
“NICE chief calls on
drugmakers for ‘simple
discounts’.”
Pharmatimes, 2010
…
Time
Since 2011: Only simple
discounts in patient
access schemes
(PASLU overview)
Amount of innovative contracting
Distribution of what the UK calls patient access schemes (PAS) as of March 2014
Free stock (n=7), dose cap,
response scheme, etc.
Simple discount (mostly confidential) (n=29)
Source: Simon-Kucher & Partners. Pharmatimes.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Some markets have hardly even attempted innovative
contracts, and will not go much further — Example: France
Risk-sharing contracts in France are to be restricted to exceptional cases only. The definition
of “risk-sharing contract” was only included in the “Accord Cadre” as of December 2012.
France
Examples of risk-sharing contracts in France
1
Background
information
RisperdalConsta
 Long acting formulation
for schizophrenia in
patients currently
stabilized with oral
antipsychotics
2
Xolair
 Add-on therapy to
improve asthma control
3
Glitazones
 Oral anti-diabetes drugs
launched in 2002
 Important SMR, ASMR IV
by TC in 2006
4
Cimzia
 TNFα blocker for the
treatment of rheumatoid
arthritis
 Important SMR, ASMR V
by TC in 2010
 Important SMR and
ASMR IV by TC in 2004
 Based on the number of
hospitalization
Contract
details
 In case of negative
outcomes: costs
reimbursement and price
decrease
 Based on the onset of a
serious exacerbation (e.g.
hospitalization, increase
in corticoids dosage)
 Based on the capacity to
delay the use of insulin in
the long run through a
longer glycemic control
than available products
 Signed in 2013
 Based on treatment
discontinuation rate
 Predetermined end date
is not public
Contract
outcomes
Source: Simon-Kucher & Partners. Accord Cadre December 2012. IFIS presentation January 2013.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Other markets are just beginning to experiment with
innovative contracts at the national level – Example: Spain
The first two innovative contracts were signed at the national level in 2013.
Contracts at national level
Performance-based contracts
Published contracts at regional level
Catalonia (Catalan Institute of Oncology):
 First contracts approved in May and September 2013
 Non-small-cell lung cancer
 Contracts involve hospital products: easier patient monitoring,
with manufacturer’s support
 Rheumatoid arthritis
 All hospitals in the country benefit from the agreement
 Diagnostic test
 Published contracts to date:
− Multiple sclerosis (Fampyra)
− Cell therapy for repairing cartilage defects of the knee
(ChondroCelect)
Spain
 Colorectal cancer
Andalusia:
 Pulmonary hypertension
 Colony stimulating factors
 Growth hormones
Financial contracts (details confidential)
 Price discount for the NHS (dual pricing)
 Price-volume agreement
 Utilization cap
 Botulinum toxin
Balearic Islands:
 Neuro-reflexo therapy (low back pain)
 Protocol of use imposed
 Conditional price approval to be revised one year post-launch
Source: Simon-Kucher & Partners. Project experience. El Global, “Sanidad solo financiará fampridina en pacientes que respondan al tratamiento”, October 2013. Lecture from Piedad Ferré at Simon Kucher´s
Pricing Strategy Forum. “Pricing, reimbursement and market access in Spain”. September 25, 2013. Cinco Dias, “Sanidad financiará el primer fármaco de terapia celular”, May 2013.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 2:
What’s the verdict?
“Target prices are
only attainable with
an innovative
contract”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 3:
Do you believe it’s true?
“In oncology, pricing
and market access is
a breeze”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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In the UK access continues to be a struggle in oncology
NICE has made headlines over the years for being particularly restrictive. Those oncology
agents that do gain access typically do so only with hidden discounts.
UK
Selected NICE recommendations and ICERs per QALY gained* for recently reviewed oncologics
ICER per QALY gained (in 1,000s)
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
Drug
Recommended
Not recommended
ICER per QALY gained in the light of appraisal
of a life-extending, end-of-life treatment
Soft NICE
threshold for
“end-of-life”
therapies
Soft NICE
threshold for
basic costeffectiveness
Vectibix
Erbitux
Halaven
Jevtana
Zytiga
Yervoy
Zelboraf
Avastin
Bosulif
Zaltrap
Alimta
Yervoy
Revlimid
Indication
2nd-line
mCRC
2nd-line
mCRC
3rd-line
BC
2nd-line
mPC
2nd-line
mPC
2nd-line
mel.
1st-line
mel.
1st-line
adv. OC
Prev.
treat.
CML
mCRC
NSCLC
Untreat.,
adv. mel.
Myelo.
Syndromes
Issue date
Jan. 12
Jan. 12
Apr. 12
May 12
Jun. 12
Dec. 12
Dec. 12
May 13
Nov. 13
Mar. 14
Apr. 14
Jul. 14
Sept. 14
n/a
n/a
n/a
n/a
Discount
Discount
Discount
n/a
n/a
n/a
n/a
Discount
Cost cap
PAS
Source: Simon-Kucher & Partners, NICE. *Selected examples: ICER per QALY gained depends on the underlying calculation model and the selected comparator. The figures displayed here are the most
plausible estimates documented in the respective NICE guidance.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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In Germany, Bosulif illustrates how even orphan oncology
drugs can become trapped in the inflexible AMNOG process
The initial disagreement was supposedly in the choice of comparator therapy for price
benchmarking/ starting point—considering that for orphan drugs with an annual revenue of
<50m€* the G-BA does not define an official appropriate comparator therapy.
Comparator from Pfizer perspective:
Comparator from GKV-SV perspective:
 Tyrosine-kinase inhibitors with similar
indication and high price level
 Non-specific cytostatic drugs
 Annual therapy cost: significantly below
€69,900
 Annual therapy cost of Bosulif: €69,900
Price negotiations for Bosulif
(bosutinib)
“The GKV-SV wanted
to compare Bosulif
with drugs that are
not in line with the
current medical
treatment standards.”
Germany
November 2013: Opt-Out: Cancellation by
Pfizer of the rebate negotiations with the GKV-SV
after the first negotiation round
- Statement by Pfizer
December 2013: Surprise agreement with
the GKV-SV (§130b discount of 44%) and Bosulif
was reimbursed as of February 2014
“There is no
perspective for an
agreement on a
reimbursement price
which would reflect
the benefit of Bosulif
for the treatment of a
very narrow patient
population.”
- Statement by Pfizer
Source: Simon-Kucher & Partners. Aerztezeitung, Pfizer. *Revenue of the drug with statutory sick funds at pharmacy selling prices inclusive VAT within the last 12 calendar months.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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In France, even late line oncology drugs have struggled
in recent years, particularly those with IV administration
France
Product
Launch indication
EMA date
Admin.
form
ASMR rating
Avastin
mCRC
Jan 2005
IV
ASMR II
vs. therapeutic strategy
Jul 2005
Nov 2005
Velcade
3rd line MM
Apr 2005
IV
ASMR II
vs. therapeutic strategy
May 2005
May 2005
Yondelis
2nd
line STS
Sep 2007
IV
ASMR V
vs. therapeutic strategy
STS failed,
listed Jan 2011
for OC only
In DRG
for STS
Abraxane
2nd line mBC
Jan 2008
IV
ASMR IV vs. Taxol
Failed
In DRG
Arzerra
2nd line CLL
Apr 2010
IV
ASMR V
vs. therapeutic strategy
Mar 2012
Pending
Halaven
3rd line mBC
Mar 2011
IV
ASMR IV
vs. therapeutic strategy
Mar 2012
Jul 2012
Mar 2011
IV
ASMR IV
vs. therapeutic strategy,
later revised to ASMR III
Failed at first,
Jul 2013
Sep 2013
Jul 2011
IV
ASMR IV
vs. therapeutic strategy
Apr 2012
Mar 2013
Jevtana
Yervoy
2nd
line CRPC
2nd line melanoma
T2A exclusion
list date
Price
publication date
Source: Simon-Kucher & Partners. EMA. HAS. ATIH. BDM_IT.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Sometimes, the tide can turn though – and turn again
UK
Cancer drugs fund (CDF) provides
welcome relief for UK cancer patients
However, times of ‘guaranteed access’ via
the CDF may be over soon
August 27, 2014
“The CDF provides an additional
£200m each year to enable patients
to access drugs that are not
routinely funded by the NHS. It was
established in 2010 and will run
until the end of March 2016.”
CDF homepage
CDF budget was increased from £200m to £280m per year
… falling short of the projected expected spend of £360m
 The NHS has agreed with proposals from the CDF to:
– Officially begin assessing price. Recent CDF panel
meetings have involved price as a topic of consideration
– Implement two new assessment processes:
Drugs not approved by
NICE routinely got
access via the CDF
1. Re-evaluation to delist drugs with the least clinical
benefit and a confidential process assessing “the cost
per patient in relation to the clinical benefit delivered”
2. Commissioning through evaluation for new drugs
Source: Simon-Kucher & Partners. NICE.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 3:
What’s the verdict?
“In oncology, pricing
and market access is
a breeze”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 4:
Do you believe it’s true?
“Beyond national
price negotiations,
it’s smooth sailing”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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In many EU markets taking the “national hurdle” is not the
end of the journey
Regional
level
Sometimes,
even the local
level can be a
challenge
National level
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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The majority of Italian regions have regional formularies
Regions are responsible for formulary inclusion decisions and managing usage restrictions
or recommendations.
Valle d’Aosta
Trentino Alto
Adige
FriuliVenezia
Giulia
EmiliaRomagna
Time to inclusion in regional formularies,
days post EMA
AIFA approval
Umbria
Basilicata
Sicilia
No regional formulary
Regional formulary
Formularies in Areas Vastas
Italy
226
371
396
Veneto
416
Val d’Aosta
420
Campania
426
Emilia Romagna
439
Trento
445
Sardegna
445
Calabria
502
Toscana
504
Lazio
510
Source: Simon-Kucher & Partners. SIFO Commissioni terpautiche e prontuari regionali, di area vasta e locali, 2012.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Some Italian regions have also started to create their own
HTA processes, although intensity of activities is still low
Organization
Activities




Evaluation of national and regional program
Evaluation of health social services
Monitoring system and performance evaluation
Elaboration of guidelines
 Control the adoption of high technology at regional level
 Support to the organization of implementation of new technology
Regional
Support to the regional commission through:
 Economic and scientific evaluation of arguments discussed by
the regional commission
 Analysis of hospital consumption
 Epidemiological studies on drugs use
 Orientate the planning of adoption of technology at regional and
local level
 Support to the organization of implementation of new technology
 Identification of priority for the NHS
 Analysis of the efficacy documentation and identification of gaps
 Analysis of the cost-effectiveness for the Regional HS
National
Region
Italy
Emilia Romagna
Emilia Romagna
Veneto
Piemonte
Lombardia
 Training
 Scientific and cultural development of HTA at national level
 Promotion of innovation and quality in healthcare
 Development of comparative cost and cost-effectiveness analyses
of health services
National level
Source: Simon-Kucher & Partners, www.cevas.it, www.uvef.it, www. Official bulletin of Lombardy of 2nd September 2008, www.sihta.it; http://www2.aress.piemonte.it/cms/settori-tematici/health-technologyassessment/presentazione-hta.html
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Decentralized healthcare management makes for a
fragmented market in Spain
Healthcare management initiatives such as electronic prescribing systems vary by region,
but new measures driven by the economic crisis aim to unify these and reduce costs.
Spain
Regional differentiation
 Regions are responsible for healthcare
management, including (drug) budget allocation
 In many policy areas there are no common
approaches. Examples are:
 Electronic prescribing system
 Policy on generics
 Hospital drug evaluations
 Prescribing indicators
 Treatment guidelines
 Joint regional drug evaluation committee
 Hospital drug regional evaluations/
formulary
High interest
 New laws implemented as part of austerity
measures aim to unify healthcare management
and reduce regional variations
Medium interest
Low interest
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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A 2013 survey confirmed high heterogeneity in access of
innovative oncologic agents across Spanish regions…
…and heterogeneity even across hospitals within the same region.
Spain
Market access inequities
 A 2013 survey by SEOM* confirmed what had
been rumored since many years: patients in
Spain have unequal access to innovative
oncology agents
 Inequities where found at various levels:
1. Non-access to some products
2. Prescribing hurdles for some products
3. Differences across hospitals even within
the same region
Example: Selected hospitals in
Spain prefer either Iressa or Tarceva
for the treatment of EGFR+ NSCLC,
and sometimes the non-preferred
option is not available at all
4. Andalucía and Catalonia had the most
frequent restrictions
Source: Simon-Kucher & Partners. Press release from diariomedico. *SEOM= Spanish Society of Medical Oncology.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Purchasing groups in France are organized at different
levels and have become well established
France
Major healthcare purchasing groups in France
GPO
Description
Representation level
UniHA
Public purchasing group for the 32 CHU1 and 24 CH2 in France
National
Public
UGAP
Public purchasing group involved in the procurement for the public
sector
National
Public
CAHPP
Private purchasing group managing around 70% of the French
private hospital procurement
National
Private
CACIC
Private purchasing group managing the procurement of various
products for a large range of healthcare centers3
National
Public + private
AGEPS &
Resah-idf
Local purchasing groups for the public hospitals in the AP-HP4
network and Ile-de-France region
City of Paris (AGEPS)
IdF region (Resah-idf)
Public
UNICANCER Achats
Manages group purchasing for most of the 20 CLCC5
National
Oncology competence
Source: Simon-Kucher & Partners; 1 university hospital centers; 2 hospital centers; 3 hospitals, elderly care centers, etc.; 4 Paris hospitals; 5 oncology centers
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Myth No. 4:
What’s the verdict?
“Beyond national
price negotiations,
it’s smooth sailing”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
30
Myth No. 5:
Do you believe it’s true?
“You can avoid the
referencing problem
by careful launch
sequencing”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Referencing at launch has been an issue since years, and
now countries are adding low-priced markets to their baskets
With more countries included in reference baskets, access decisions are becoming
increasingly interconnected.
Example: External price referencing in Spain
Until 2004
France
Germany
Netherlands
Italy
EU
Other examples
Additional reference
countries in 2011
Greece
Extension of reference basket
2004:
Austria
UK
Belgium
Denmark
Greece
Spain
2011:
Czech Rep
Ireland
Romania
Sweden
Switz.
Extension of reference basket
Before 2009:
After 2009:
 Any EU country* can be referenced
 External price referencing is no longer
included as an explicit criterion in
Spain
EU
Since
2012
Germany
Introduction of (informal) price
referencing; attempt to reference the
actual net selling price (including
manufacturer rebates)
Source: Simon-Kucher & Partners. *Any EU country which is not subject to any exceptional or transitional intellectual property regimes for pricing.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
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Increasing re-referencing is significantly limiting the
positive benefits of optimized launch sequencing
Effects of a carefully orchestrated launch sequence may disappear after a relatively short period of time.
Impact of re-referencing
Re-referencing frequency
Price level
Initial
referencing
After rereferencing

Netherlands: twice a year

Greece: increased frequency

Switzerland: introduced regular re-referencing

Spain: re-referencing on a regular basis

Italy and France: may re-reference, typically if
specified in the P&R contract

In Germany, the AMNOG process can be reinitiated, potentially leading to re-referencing

Many smaller EU countries re-reference
regularly or irregularly
Conceptual
Time
Re-referencing, in conjunction with extended referencing baskets, can be the starting point for a
downward price spiral
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
33
There is evidence that price levels in Eastern Europe are
beginning to contaminate Western European markets
Price levels are often significantly lower than the Western European average.
Price differential versus EU-4 average for key oncology therapies
115%
Price as % of average EU-4 ex-manu price
110%
105%
AVG
EU-4
100%
95%
90%
85%
80%
75%
70%
65%
Glivec
Alimta
Avastin
Erbitux
Bulgaria
Tarceva
Croatia
Nexavar
Sutent
Romania
Tasigna
Serbia
Iressa
Jevtana
Zytiga
Slovenia
Source: Simon-Kucher & Partners. Analysis from 2012. UK not included.
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
34
The nightmare scenario: A price cut in one country can
have a disastrous effect on pan-European profitability
This real example shows how a price cut in one country at LoE had a significant impact on price levels in
various other European countries.
Upper
limit:
€1.62
Simon-Kucher
Project Example
Ex manufacturer price for
Medication A
€1.62
€1.37
€1.01
€1.04
€1.06
€1.15 €1.18
€1.12
€1.23
€1.29
€1.20
€1.09
€0.98
€0.84
€0.62
€0.50
€0.90
€0.50
€0.45
New
lower
limit:
€0.20
Hungary
€0.22
Countries
Czech
Rep
Spain
Germany
Poland
€0.39
€0.28
€0.20
Current Prices
€0.67
€0.62
New EU
price
corridor:
87.9%
€0.56
€0.76
Old EU
price
corridor:
48.3%
€0.92
€0.95
€0.87
Price Reduction
Old
lower
limit:
€0.84
€1.48 €1.48
€1.40 €1.43
Italy
Greece
France
Austria
Norway
Future Prices
Portugal
Finland
Belgium
Denmark
Sweden
Nethlnds
UK
Internal
Referencing
External
Referencing
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
35
Myth No. 5:
What’s the verdict?
“You can avoid the
referencing problem
by careful launch
sequencing”
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
36
Key takeaway: It’s all a myth!
1.
Despite some major structural reforms, EU payers continue to look for ad-hoc savings
opportunities to limit growth or even reduce overall healthcare spend
2.
EU payers are changing the rules continuously and are learning from each other. Effective cost
reduction mechanisms have spread quickly
3.
With few exceptions, use of risk-sharing type contracts remains limited, and they may even be
losing favor among the earliest payer advocates
4.
Payers are no longer afraid of denying access, sometimes even to innovative products in
sensitive indications like oncology
5.
Sub-national payers are assuming more important roles in budget control. Your affiliates are
under pressure on many fronts, and must balance increasing resource demands with
diminished revenues due to payer-imposed price or access cuts
6.
There is increasing sophistication by payers when referencing and re-referencing other
countries. A good launch sequence only helps for a limited time
Source: Simon-Kucher & Partners
New York Life Sciences Forum_Investigating Myths about European P&MA_October 17, 2014
37
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