(The following was presented during the First Plenary Session, “Health Technology Assessment (HTA) as a Reimbursement and Priorities in Health Care,” at the ISPOR 9th Annual European Congress, 29 October 2006, Copenhagen, Denmark) 

ISPOR has set as one of its key targets to reach out to decision makers. This article will address where science meets policy, as this is a policy article, not economic, and will have a Swedish point of view as well as a point of view from of the European Pharmaceutical Association (EFPIA). This article will contain several references and explanations about EFPIA work in Brussels and explanations about the working group that the Commission has set up to try and streamline the approaches the governments take. The pharmaceutical industry has been not very constructive in the dialogue with payor's about how to use the tools that many work with daily. There is an attitude that this is acceptable as this is academic and this is applied by doctors in a wise way when they decide with patients what drugs to use.

But as soon as governments have intervened and made formal procedures in the context of pricing and reimbursement, it has not been appreciated. Many have worked against it in many countries. Now, this attitude has changed. Many have a constructive attitude in Europe with most, if not all, European countries at a rapid pace. There is now a media focus about discussions and reference prices in Italy that is being debated. We follow the developments in Germany on a daily basis about the future of IQWiG, and all these new reforms as well.

This article has a European focus, but will include comments on the Nordic experience as well. Payors, politicians and policymakers on one hand agree we have no functioning market for pharmaceuticals. Many in industry think that is unacceptable; and we need to have that, as it is the solution to our problems. On the other hand there are many people in society that do think that there should be no free market for pharmaceuticals. The reality is this is where we are right now, and particularly in Europe, we have health systems that are managed either by governments or quasi-government bodies or insurance type schemes. There are different features, but they have many things in common, one of which is that there is no functioning market in a real sense. Many in industry have accepted that these are legitimate arguments by payors. Politicians will say, 'we want a system like that. Let's set up an agency to do this.' There is so much more meaning behind these statements. First of all, costs. What are the costs? This has to be defined. Effects would comprise both clinical effects and economic effects or benefits. You can have entire debates on RCTs versus real clinical life experience. When you look at the economic factors, you are also going to have a debate about what you measure and how. What may seem very simple for a politician and a policymaker, applying that in real life is difficult. That is, why it is so difficult to apply the science for those who are developing in decision-making within governments? It is because it is not so easy? We end up dragging in scientific arguments and we explain that just because a drug is now approved, it is on the market, it does not mean we know everything about it. In fact, we know that things will change. We know that drugs turn out not to be so safe. They may actually turn out to be much better than we had expected, worth a lot more than we had thought in the beginning. This notion of not knowing everything about products is very difficult for politicians to understand. People in the regulatory environment understand this (heads of the EMEA, FDA, etc.). They know it is matter of balance; there is always a riskbenefit. You never know the truth. You have to manage uncertainty. That is not something that people in budget departments or finance ministries really are known to do. They can manage other types of uncertainty but a product ought to be a product. Managing uncertainty is a reoccurring them in this argument, but the biggest challenge we have is when you do this, the view must also be holistic and patient-focused.

This is where it also becomes difficult to apply the science for policymaking or decisions on products are because this is all context-bound. The arguments developed in one context may not fit just across the border in another country or it may be across the border in another region in a particular country depending on the way it looks. The industry experience with the application of HTA is largely positive if we talk about the academic environment whereas where governments apply this, they apply it in context where this does not fit. For instance, if you have silo budgets, if you have decentralized budgets for pharmaceuticals, to the extreme that each doctor has his or her own budget, there are no incentives for that physician to prescribe drugs that do not bring any savings on a person's work beyond the Hippocrates oath, of course, and what drives the profession. Using novel medicines like TNF-alpha agents will, there are simply no incentives in some systems for that. This is also borrowed from IHE in Lund, Institute of Health Economics in Sweden where they just made a calculation for the year 2002, the society cost for illness (C= 2.9 billion out of a total of 55). This is important, but the focus should be on this issue. When governments and payors look at this, it is very often with a very narrow view of just the pharmaceutical budget.

In Europe, there are long traditions applied in government settings as well because we have the public management of health systems. They could be, as previously mentioned, insurance-based, or even though now the Krankenkassen system, which is more or less like a quasi-government which the new government is trying to tackle which is not so easy. We have state-run systems of course on the national or regional level. A long tradition in France, which we often tend to forget, is that within the ministry functions and government bodies in France there has been a rating of products for many, many years about the relative value of products which in a way touches upon what we are doing. We have of course product-based price control systems in many countries. We have had that for years. And we know it is coming everywhere. In the European Union, the G10 Group is a high level group that the European Commission set up together with member states and stakeholders in just before the turn of the century. They delivered a report in 2002 with 14 recommendations on what should be done to balance these conflicting needs. Industry has a need to have a competitive environment in Europe, so we need to sell our new medicines and get rewarded for that. At the same time we have national health systems that are running out of money. And we have on top of that something called the Lisbon Agenda which is about fostering the competitiveness of Europe. Now how can we have these people meet one another and how can we find a win-win solution? That was a process. It finished with some recommendations. Some of the business, particularly one, recommended the increased use of health technology assessment or the code word for this in this setting was ‘relative effectiveness’.

What is HTA? What is relative effectiveness? What is cost efficiency? There are many debates on these topics. The European Commission and the member states feel that we should increasingly use these tools when we decide on pricing and reimbursement for medicines. It is an agreement within industry, commission, and member states. Now it was not so easy to arrive at those models; so therefore the commission started a second process called the pharmaceutical forum with a working group on relative effectiveness where EFPIA was very much engaged. Again, the politicians see this as very simple – the relative value in products. When you set a price, what does it add to what's on the market? That is what we should do. That must be simple. So the commission officials say, fine, now we have the EMEA that approves all new products and we have agreed on that and it is a success story. Now why don't we do the same thing for this? We can just bolt on a centralized assessment and that is what they're pushing. We know that German politicians say, 'oh, IQWiG, oh, this is fantastic, now IQWiG should follow international standards'. “What standards,” we say; “Europe is all over the place in this context.” This bias will also be used in Europe and we have not had a rational use of medicines in Europe over the last few decades. Typically what we have done is that we have overspent on old drugs. We have not had low generic prices. Research-based companies make a lot of money on the old drugs when the patent has expired. Was that very rational, whereas our new products were delayed two years for every product. For example, in Belgium before they even got reimbursement, we had automatic waiting. Is that rational? We made money on the old drugs in Belgium, not on the new ones. That is not rational. The model was better in the U.S., that is, what we call “create headroom for innovation.” Push prices down after patent expiration in order to have money so you can afford the new medicines and start using them early to the benefit of patients and everyone. This is the bias which should be adapted.

As mentioned previously, Europe is diversified. Basically, there are not two systems that look the same; it should be this way. It has to stay this way because the responsibility of public health is in the national domain. Now there are different approaches; some will be highlighted in this article. At the ISPOR 9th Annual European Congress Short Course Health Care Reimbursement Systems in Europe, there was discussion about Spain and Italy. It is amazing to see the different approaches just within a country like Spain between the regions. One very critical issue is whether you make these assessments transparent or not. If you go on the Swedish agency's website you will find detailed assessment reports for all the decisions whereas in many countries you can not find anything. It is a secret committee that meets somewhere and they just basically say yes or no. And you have the debate about what weight to put on RCTs versus observational data. There is a big question about when do you do this. Do you do this routinely for all new products before you put them on the market? That is what is being done in many countries as a part of the pricing procedure. In Sweden, it is being done as a separate agency, but they handle it very well. You are allowed to submit your application even before the commission has issued the official approval which means that you have a head start; most decisions are delivered within 90 days. In the UK, we have the situation where NICE will make a review after a product is approved and introduced. The absence of a NICE assessment or appraisal means that drugs are not used in the UK, and that has to be acknowledged.

Concerning the issue of adhering to transparency rules, there is a directive in Europe, a transparency directive that calls on the time lines which is not followed in most of the European countries. There are also different approaches to transparency of assessment models. There is a disagreement between member companies and NICE about the assessment for Alzheimer drugs where things may have happened, but that we can not have access to the models that NICE is applying because they are called proprietary. What is critical is managing uncertainty and reassessment. Are you going to (once you have said yes or no to a product) not reassess this when you have new evidence presented that either increases or decreases the relative value of a product? What are you going to do when the patent expires in a therapeutic group? And we know that payors are very keen to go back and look at those clauses again to see if you can get more value for money by changing recommendations. Another big difference we have between European countries is the degree of implementation. How many HTA assessments are actually implemented or followed or even known in a wider audience? This is one of the outstanding problems in countries like Sweden, UK, and elsewhere because you have positive assessments but they are not followed. There are negative assessments and they are typically followed. This handling of uncertainty remains a big issue for us. Just look now how Pfizer's inhaled insulin, Exubera, has been handled. That is not entirely a question of handling uncertainty. It is a question of handling products with certain risks. There is certainty about the real clinical utility of a product; Exubera has just been approved with a lot of conditions and follow up studies to be performed whereas many countries in Europe have turned it down blankly. This is the type of discussion we need to have at the European level. Are we going to have the benefit of the doubt and let new products onto the market and then make reassessments? In the Nordic countries, we have a very different approach to handling uncertainty, as we have different approaches to the management of relations with generics and patent expiration.

BThis is a critical question: What will you do the day a patent expires in a class? In Norway, you basically force doctors to switch patients, or at least try to switch patients, whereas Sweden so far has relied on that market to function by itself. In Germany, there is the other extreme with jumbo groups, bundling patented and nonpatented products together and trying to drive down the price. Implementation was previously mentioned (policies tend not to be followed); there are a number of assessments. Some have had very wise decisions by policymakers. For instance, a recent report on cancer drugs, you were given recommendations. You had reimbursement in countries and still the products are not used. There are still some barriers.

Many involved cannot be held responsible for those barriers. But the policy-makers that we are trying to reach out to also not only need to make the right decisions based on what you present, they also need to make sure they're executed and followed. This has to be an intricate part, not only of a pricing reimbursement decision, but of how you manage the whole health care system. We are now at a stage where we are beginning a process. We have to say for Europe diversity is inevitable. It is all context-specific. But we must be able to develop common approaches and best practices. From a European standpoint, the challenges that we have now is this discussion we have in the Commission Working Group. The Commission Working Group comprises all the 25 member states, the Commission, stakeholders, industry, say that it is far too early to talk about a European assessment. We need to focus on best practices. We need to exchange these reports. There was a colleague from a member state in the last meeting who basically said, “I'd like to know what all of you are doing. We spent three meetings trying to discuss what we should do and I still do not know what you are doing in your systems. I can not find those 2,000 decisions. Where are they? I want to learn. I want to see that.” We must start with this before we talk about working together on concrete assessments. Maybe the new network, the EUnetHTA which is based in Copenhagen, chaired by Finn Borlum Christensen, the European Network of HTA Agencies funded by the Commission, will play such a role. The number of work packages is a very interesting process in which industry will want to take part.

To illustrate that there are a number of areas for collaboration where we think in industry that there is room to work, we need to try and achieve consistency. This is so important for the executives in my industry and everyone working in industry. We need to know the rules. We need to have some kind of predictability. We need to know what studies are planned, and what to expect. Are we going to invest in a molecule in Phase II, go forward in Phase III? We need to have some clue what the payors want and how they are going to look at it and today it is becoming very difficult in Europe. We need to achieve the consistency and increase clarity on what we actually mean. There are a number of definitions that we need to agree on. We have not been able to agree in the European Union process on this. There are a number of member states that are admittedly against talking about money in any way in this assessment. Relative value of a How many HTA assessments are actually implemented or followed or even known in a wider audience? This is one of the outstanding problems in countries like Sweden, UK, and elsewhere because you have positive assessments but they are not followed. There are negative assessments and they are typically followed. product is only about clinical value in controlled clinical trials preferably with outcome data only. That is it’s costs or benefits, financial benefits have no role whatsoever in this. There are some very, very big member states that take that view. I think there is a long way to go before we can build any European system. To emphasize the biggest area for work with the policy-makers, is to development of new tools.

We need to agree on a mind set on how to handle new data, a mind set, like the regulators have. When new products come, you do not know everything, but you still have to have some kind of go at it. The FDA will approve a product with a certain risk profile, a certain indication. They certainly turn down parts of the application from the company and may not give the full claim. They say maybe we can expand it later. We would like to have that type of dialogue with payors which we do not unfortunately have today. Much of the evidence is being submitted to a black box and we do not find out why things turn out the way they do, so we need to have this mind set. We need to have a flexible system for adjusting prices, claims, and coverage decisions, up or down depending on the experience we gather. We need to develop these tools in the member states by gathering real clinical life experience. There is a lot of work being done on this, but there is a lot still that can be done particularly in making people have access to health records in the countries. We need to make it easy both for companies, for researchers, for providers, contract providers and others to tap into these resources and to present the requested data to payors. There are some apparent benefits in this dialogue and in trying to establish best practices for Europe. This could turn out to be a win-win situation for everyone. The recommendations that we have made from industry are exactly this.

Reaching out to policy-makers and decision makers is what we should be relaying to politicians. If you want to do economic evaluation for inclusion of pharmaceuticals and other technologies for reimbursement, you need to do it properly, and we are all ready to contribute