High-Cost Drugs: Experiences and Barriers to Access in Latin America

Published Aug 16, 2022

The COVID-19 pandemic has placed enormous strain on the Latin America region. Even after more than 2 years of the pandemic, healthcare systems in the region still face significant challenges, particularly related to economic crisis. In this difficult context, the demand for high-cost drugs continues, and the approaches to provide access vary considerably in different countries across the region.

Against the backdrop of this, the Latin America Consortium hosted a forum at the ISPOR 2022 where some current initiatives from the region to address this issue were discussed. Professor  Yajaira Bastardo, Chair of ISPOR Latin America Consortium (2020-2022) and Professor of Central University of Venezuela, opened the session by providing a brief overview of the rising cost of drugs and impact on access in Latin America region. Dr. Stephen Stephani, Head of Oncology, UNIMED Central RS presented from a clinician perspective, discussing the current cancer care situation in Latin America, key challenges for patient access to oncology medicines, particularly financial toxicity, and explored some strategies on how to bend the increasing cost curve in the region. Professor Diego Rosselli of Pontificia Universidad Javeriana discussed about the financing mechanisms for high-cost drugs in Colombia, access, barriers, and factors influencing access to innovative drugs. Dr. César Cruz, HTA Director of National Health Council shared Mexico’s experience from the last 10 years in consolidated purchase of medicines, medical devices, and other supplies for health, and discussed about high-cost drugs plans and the government involvement in pay for performance.

This brief summarized a couple of reflections from Dr. Stephen Stephani and Professor Diego Rosselli.

Innovative treatments, such as gene therapies can treat, prevent, or cure a disease that was previously uncurable. However, they are still emerging on the healthcare system. Health technology assessment (HTA) agencies have not yet elaborated standardized approach for assessing gene therapies; therefore, significant differences can be seen during HTAs carried out in various countries, especially Latin America. At the same time there is a stand-off between key stakeholders. Patients are no longer prepared to wait, demonstrated by a rise in medical crowdfunding campaigns and legal injunctions. Payers, under pressure to allow access early, fear undermining HTA, pricing and reimbursement negotiations, particularly if high price benchmarks are set. Several questions must be explored.

Each country, with its specific characteristics, must quickly prepare to broaden the debate on various challenges, such as assessment of clinical effectiveness, selection of appropriate discount rates, valuation of outcomes, time horizon and extrapolations of effects beyond trial duration, HTA methods, estimation of costs and affordability.

Several organizations assessing the value of health technologies have a higher cost-effectiveness threshold for treatments for ultra-rare health catastrophic conditions. Some of the broader concepts of value are particularly relevant such as severity of the disease, insurance value (notion that is important to have therapies available, even if unlikely to use it), real option value (especially if it can really be a cure), value of hope (potential to give you a big change) and equity (benefit patients that usually are not beneficiary of the system).

Use of Modifiers

A modifier implemented in a quantitative way (as proposed for the severity modifier) increases the value of the quality adjusted live year (QALYs) provided by the intervention. It means, that some agencies are prepared to pay more for a medicine if it treats, in this case, patients with a severe disease. Latin America countries have to address this situation as soon as possible.

Affordability: Access Considerations

Getting pricing and reimbursement models right is important for incentivizing research and development investment while not jeopardizing the sustainability of healthcare systems. Payers and manufacturers therefore need to acknowledge each other’s constraints—limitations in the evidence generation on the manufacturer side, budget considerations on the payer side—and embrace innovative thinking and approaches to ensure timely delivery of therapies to patients.

Affordability and budget impact concerns could pose, also, a barrier to equitable and timely access of patients to these treatments. Novel payment models include innovative financial agreements to spread costs over time, allowing payers to control budget impact over the long term. Additionally, outcome-based agreements, such as paying for results or value, can manage uncertainty and share risks related to real-world value. While the actual system differs in each country, all countries should work towards a new dynamic system.

There is a need for additional enabling factors that would support progress in this debate:

  1. Where there are gaps in the data collection infrastructure, agencies and payers should be open to collaborating in building solutions, incorporating appropriate access to the resulting information, whilst minimizing the administrative burden
  2. Novel pricing and payment approaches (such as combination-based pricing and over-time payments). This includes the need to engage in a dialogue earlier on to ensure predictability for both parties and a willingness to adapt traditional pricing and reimbursement to facilitate the use of novel payment and pricing models when this would broaden and accelerate patient access.
  3. The value that novel pricing and payment model deliver should be assessed comprehensively, focusing on how these can broaden and accelerate patient access, as well as their contribution to managing uncertainty and budgets.

Recent developments suggest an increase appetite for outcome based contracting solutions, but it is necessary to build a “data stream’ to be able to monitor outcomes. Managed entry agreements are used with greater frequency, but usually involve substantial price concessions in addition to data collection commitments. Some agreements are:

  1. Conditional reimbursement. Already in use in some countries, such as in England (for cancer), Scotland (for ultra-orphan drug) and in German and France, under this type of scheme, reimbursement is time limited and conditional on the collection and review if further evidence, allowing for future price re-negotiation.
  2. Pay for performance. Deals linking price or rebates to pre-defined outcomes, when intervention prices are high, this type of scheme allows payers to hedge financials risk if a product fails in some cases. In Brazil, this strategy was evaluated for gene therapy, but it stopped because of the need to modify the legislation to accommodate this model.
  3.  Annuity/Installment based Models. This type of scheme spread up-front payments over several years facilitating cash flow management, but do not impact the budget impact and the affordability.

Preferred Models vary across countries, that shows that each country need to customize their own strategy, based on their restrictions and criteria. Restriction is often related to scientific uncertainty of limited evidence the time of submission or approval and the high cost of the therapy.

Since its radical health reform in 1993, the Colombian Ministry of Health has used different cost-containing strategies. Centralized procurement of hepatitis C medications was one. It was supposed to be applied later to other high-cost drugs, but this has not yet happened. Drug price regulation was on the agenda for several years until it finally started in 2006. The methodology for the reference pricing used has had several adjustments since then and is finally mature enough to show its advantages. Another strategy has been the relatively flexible legislation (at least as compared to the US) for the entrance of biosimilar products.

Numerous analyses have shown how biosimilars influence the market both by lowering drug prices (including the price of the reference biologic) and by improving access, as more patients receive these innovative products. But perhaps the most original strategy of the Colombian health system has been The Cuenta de Alto Costo (CAC- High Cost Account). The CAC was established in 2007 as a technical organization, independent of the government, and funded by all the different health insurers, both public and private. The initial purpose of the CAC was to adjust for the fact that since its inception the largest public health insurer, the Nueva EPS, which inherited the patients of the extinct Colombian Institute of Social Security (ICSS), had a disproportionate share of HIV/AIDS and chronic kidney disease (CKD) patients. The CAC rapidly developed an efficient information system to keep track not only of the treatments received by these patients but also of the efforts for an early detection of these and other “high cost conditions”. The original list included HIV/AIDS, CKD, hemophilia and a handful of cancers, but the list has been growing to include hepatitis C, rheumatoid arthritis, all cancers, as well as highly prevalent conditions like hypertension and diabetes, well known risk factors for CKD.

The CAC information system has been structured not only to contain cost but also to develop quality indicators that have had an impact in, for example, early detection of breast cancer or overall survival of hemodialysis patients. The huge problem of ever-increasing costs is a global concern, and there are no easy solutions. Latin America suffers from an aging population, and has a better informed growing middle-class, which demands more and more health interventions. We require culturally and politically designed interventions to manage our own problems.

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