By Kevan Wind Medicines Procurement Pharmacist London and East of England.
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Transcript of By Kevan Wind Medicines Procurement Pharmacist London and East of England.
By Kevan Wind
Medicines Procurement Pharmacist
London and East of England.
A Personal View
Change the Name from Pharmaceutical Price
Regulation Scheme (PPRS)
To
Pharmaceutical Profit Regulation Scheme
First a little digression!!!
By Kevan Wind
Why?
•Because that is what it really is.
•Operates as a control on profit but allows prices to be set high.
Remember I am a Simple Man
You can make profit from few sales of a high cost product
OR
Lots of sales from a low cost product
The NHS has a problem
Too many patients to treat and not enough money.
Expensive Medicines
Sales of medicines tend to rise if the price goes down. (Elastic demand)
Especially if price has been a constraint.
E.g.
Clozapine
Ondansetron
Oxaliplatin
Omeprazole
Ondansetron Oral Usage – UNITS
0
25
50
75
100
125
150
175
200
225
250
275
300
TOTAL USAGE ZOFRAN GENERICS
Source: IMS Health, HPAI, Dec 07
Omeprazole Oral Usage – UNITS
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
2,500
2,750
3,000
3,250
3,500
3,750
4,000
TOTAL USAGE LOSEC GENERICS
Source: IMS Health, HPAI, Dec 07
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
1998 1999 2000 2001 2002
TU
N
Omeprazole Original Omeprazole Generic
The The GermanGerman Generics Market - What happens after Patent Generics Market - What happens after Patent Expiry Expiry
Omeprazole-Performance (Volume) after Generic LaunchOmeprazole-Performance (Volume) after Generic Launch
Source: IMS Health
Oxaliplatin Usage – TOTAL MG’S
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
TOTAL USAGE ELOXATIN GENERICS
Source: IMS Health, HPAI, Dec 07
Clozapine Usage – UNITS
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
2,500
2,750
3,000
3,250
3,500
3,750
4,000
TOTAL USAGE CLOZARIL GENERICS
Source: IMS Health, HPAI, Dec 07
So My Thesis is That TRUE partnership =
A relationship where the price of the medicine is set at one
that the NHS can afford
On the basis that we treat an agreed number of patients.
You get your profit….. We treat our patients.
Some Potential Issues
•Reference Pricing.
•Demand might be inelastic
•Money used on other health priorities
•Difficult to explain to boards and shareholders?
•Also Norman Evans effect (Fluoxetine)
BUT
It would be a fundamentally moral arrangement that would give us what we need.
We can link price to volumes in a framework contract.
And don’t forget the patients………… or many of your mission statements.
Patient Access Schemes (Risk Share)
This should be their fundamental purpose……………….
To reduce the effective price so that more patients can be treated.
Are fundamentally inferior to a straightforward price reduction
Are costly and complicated to administer
PJ 29th March 2008 reported (Cancer Network Pharmacists Forum)
Three scenarios for risk sharing schemes
1. Where a company wants to get a foothold in the market before NICE appraisal.
2. Where a company wishes to reduce the cost per QALY after a negative NICE appraisal.
3. Where a company wishes to reduce the cost per QALY and allow the product to hit the NICE threshold.
In my view this misrepresents true Patient Access Schemes
Schemes should NOT bypass or undermine
normal NHS approval mechanisms.
Not a New Idea
Antiemetic effectiveness contract 10 years ago.
(Relied on measuring volume of vomit so not very popular)
MS Risk Share Scheme (for Beta interferon ) 2003
Allowed 10,000 patients to be treated.
Some Current Schemes (BOPA)
Straw Poll of Pharma reveals
Limited number of schemes being envisaged
Caution about the unpredictability of financial risk
Caution about the rigidity of the arrangements
Mostly a UK solution (by-product of NICE approval process)(Italy has some schemes Sutent, Tarceva, Nexavar)
May be a response of slow (or appropriate) uptake of new medicines by NHS(commercial survey result shows NICE Networks and PCT influence uptake).
(thanks to those involved)
NHS Position
DoH Authorising some schemes
Comply with NICE guidance
Meet DoH criteria
DoH specialist in this area.
“Exception rather than the rule”
Paper from BOPA
Paper from NPSG for discussion with ABPI
Unusually is essential agreement!
NPSG Paper
The schemes should allow greater access to medicines and may speed uptake, something which the NHS has been accused of failing to manage in the past. They are by definition value based and give transparency to outcomes. They are however potentially administratively burdensome especially if they multiply and have the potential to overburden the clinical staff who should be involved in patient care not financial reconciliation.
Summarised in editorial in Hospital Pharmacist Vol 15 No 4 p114
DoH only looking at NICE approved treatments.
PCT / Trust medicines management procedures must still be followed.
Scheme should be assessed in same way as new medicines (London New Drugs Approach).
Advantages of Schemes (to NHS)
Patient Access schemes make medicines available to the UK in the global arena of linked market prices but with localised cost effectiveness targets (e.g. cost per QALY).
Healthcare should be improved with the right patient being treated at the right time.
Speed of uptake of new medicines could be improved.
The system is by definition a value based one.
Outcomes of treatment will be in the public domain.
Sales of medicines will be increased and profitability of manufacturers could be improved.
There will be increased opportunities for partnerships between industry and the NHS within these schemes.
Problems with Schemes
Schemes have potential to be administratively burdensome with a danger that the extra workload will fall on clinical staff. The burden is cumulative with increasing numbers of schemes.
Financial flows in the new NHS are complex and there is a need for reconciliation of responses and financial flows between providers and commissioners.
Schemes may require the transfer of individual patient data with the resultant need for confidentiality.
Auditing of the schemes may be complex as all sides (industry commissioners and providers) need to be assured of fairness.
There is a need to agree mechanisms for measuring clinical criteria (who will measure what).
Specific objective measures of clinical response are not available for all treatments.
As clinical experience grows and responses improve the return to the NHS could fall.
Clinicians may treat more freely with “free” medicine.
There is the potential for abuse of the schemes by all parties.
Recommended features of ideal schemes
BOPA and NPSG Positions essentially in agreement.
NPSG BOPAJointly Developed Schemes 1. Calls for discussion with commissioners(industry, commissioners and providers) 15. Calls for single local mechanism for
approval of schemes locally.
One Preferred Model 4. Flexibility in how scheme operates.11. Should be a consistent approach to approval
Simplicity of Arrangements 12. Schemes are offered across the whole NHS13. If scheme ceases prices should remain constant.14. If scheme ceases NHS should have contingency
arrangements.
Clear Financial Flows 2. Trusts must have robust financial processes for dealing with reconciliation of pt outcomes with pay back
schemes to commissioners. 4. Actual price paid recorded on pharmacy systems
Prices do not vary 5. Prices should be reflected in HRG payments.9. Discounted prices should be available to NICE16. NHS have contingency for dealing with cessation of
scheme.
Infrastructure Costs Agreed 8. Information collected by appropriate staff. May need Data Manager may be needed. extra establishment.
States need for patient confidentiality 7. No patient identifiable information used.
10. DoH needs to establish a position on interim schemes.
Have agreement with ABPI Supply Chain Group and NPSG to work on a joint approach to define “Best Practice”
So Patient Access Schemes could be described as being rather Like these ladies
Whilst they have many desirable features, the costs of becoming involved with too many of them is likely to be high.
(High Maintenance)
So perhaps one should limit one’s experience to just a few!
So
Cautious welcome from the NHS
Schemes must be jointly agreed & not bypass normal approval mechanisms
Schemes must be easy to administer
Costs for NHS must be taken into account within the scheme.
Payment delayed until agreement about continuing scheme?
But if my poll is to be believed we are not going to be inundated with them
So if they are set up and managed appropriately this could be a win win.
NPSG / ABPI “Task and Finish Group” being set up to come up with a Best Practice Approach.
Questions?