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GfK HealthCare | March 2011 | |
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Risk Sharing: Dealing With Uncertainty  By Marco Rauland, Ph.D. Head of Pricing & Reimbursement Risk-sharing agreements as innovative market access strategies are currently on everybody's lips. But risk-sharing deals are easier said than done. The implementation of a risk-sharing agreement can be associated with a high administrative burden, additional costs and last, but not least, a lot of uncertainty. Thus, the question arises whether and when a risk-sharing agreement is the right strategy for your product. The first risk-sharing agreements were born of necessity. Insufficient data for a reimbursement decision from payers’ perspective (especially in terms of long-term, real-life data) induced the industry to break new ground with regard to its market access strategies. What is the solution if the data available at the time of the planned product launch is insufficient for a payer to reimburse the therapy? You can agree on a deal that links reimbursement to the product’s performance (e.g., clinical outcome or utilization) in the post-marketing setting. You share the real-world uncertainty with respect to:
The expression “risk sharing” is interchangeably used for different forms of market access agreements and vice versa. This includes terms such as: market access schemes, cost-sharing, dose-capping, response schemes, pay-for-outcome and performance-based pricing, to name but a few. Despite the several ways they may be named, risk-sharing agreements can broadly be divided into two categories: finance-based and performance-based. A further distinction is whether the agreement is based on a disease population or the individual patient. Finance-Based/Patient Population level: The price of a pharmaceutical is agreed between a payer and a manufacturer on the basis of a sales volume forecast. If the actual sales volume exceeds a predefined volume cap, the manufacturer has to pay penalties either in terms of money, rebates or price reductions (examples: France, Australia). Finance-Based/Individual Patient level These agreements ensure payers that the individual patient treatment cost will not exceed a certain threshold. For example, Novartis agreed with the NHS in the UK to pay for the macular degeneration drug Lucentis in case the patient requires more than 14 injections (dose-capping). An example of a so-called cost-capping agreement is Avastin in Italy: Avastin for the management of approved cancer cannot exceed €25.941 ($36.15) per year. Performance-Based/Patient Population level The MS deal in the UK is the most popular example of such a risk-sharing agreement. After NICE considered neither beta-interferons nor Glatiramer to be cost-effective for the treatment of MS, an acceptable level of £36,000/QALY ($58,702.69) was defined and a prospective study launched in 2002. Over a period of 10 years the cost-effectiveness of four products will be monitored and the prices adjusted accordingly to meet the agreed cost/QALY threshold. Performance-Based/Individual Patient level The most prominent example of this type of risk-sharing deal is Johnson & Johnson’s Velcade for the treatment of relapsed multiple myeloma. Following NICE’s conclusion that Velcade is not cost-effective (at cost of £3,000 ($4,892.14) per cycle), it was agreed that patients showing full or partial response to the drug (measured by the serum M-protein level as a surrogate) are kept on therapy, which is funded by the NHS. Patients showing insufficient or no response are taken off therapy and refunded by the manufacturer. Another example of such a deal is the agreement between Novartis and some German sick funds, where Novartis refunds the bisphosphonate Aclasta for patients who suffer from a fracture within one year despite taking the drug. Risk-Sharing: Easier Said Than Done The implementation of a risk-sharing agreement can be quite difficult. Whereas finance-based schemes are comparably easy to execute (low administrative burden and data on usage is relatively easy to obtain), performance-guarantee agreements are much more complex and costly. It is evident that under a performance-based scheme the success of the intervention needs to be measured, documented and evaluated. It is the natural interest of both parties (payer and manufacturer) that this is handled by an independent, neutral third party. The related investment and administrative burden should not be underestimated. In addition to the necessary human resources, the patients being treated under the risk-sharing program need to be registered, monitored and the results recorded, stored and analyzed. Legal issues with regard to patient rights and data privacy/protection related to data collection by a third party can be a further implementation hurdle. In addition, some outcome-based risk-sharing agreements require additional cost-effectiveness analysis, which is also labor intensive and associated with additional costs. Furthermore, agreement has to be achieved regarding the right clinical outcome indicators (primary and/or surrogate endpoints) as well as on methodological aspects. This is sometimes easier said than done since definition and/or measurement of objective clinical indicators are not possible in many disease areas. And finally, the impact of a country-specific risk-sharing agreement on payer’s price acceptance outside the country of interest has to be evaluated to avoid any negative impact on the pricing opportunities in other countries (external price referencing). |
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Informed Decision to Minimize the Risk of Risk Sharing There is no question that the decision with respect to a risk-sharing agreement cannot be made without a sound information base. Several key questions need to be answered before entering a risk-sharing deal:  Market research and consultancy can provide valuable information in defining the best form of market access agreement and assessing any related risks. Payer/KOL Advisors Research
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