Health Technology Assessment Perspectives and Trends

Abdulkadir Keskinaslan, MD, MBA, MPHMarket Pricing Director Asia Pac

29-31 Oct 2009, Kapadokya, Turkiye

2

Health care spend has reached USD 3.5 trillion in OECDProviders and distributors account for 66% followed by 17% for pharmaceuticals

296

592

567

2,364

1,797

OtherPayors/

PBMs BiotechnologyPharma-

ceuticals Devices/ Equipment

TotalProviders/ Distributors

1,722

70 253,565

171343

47

1,843

Note: Includes non-profit hospitals and services and government-owned hospitals and service providers; OECD countries only; 1 Conservative estimates considering only OECD countries

2005 Revenue, Health Care Industry1

17%

2%10%

66%

<1%5%

USD billion (nominal)Publicly traded companies Government & Non-profit Share of HC total

OECD

Source: McKinsey analysis; OECD, IMS

3

Demographic transition will be the leading cause of growth in health care spend

Global population ageing – decreasing fertility along with lengthening life expectancy shifting relative weight from younger to older groups

Regional differences in life expectancy at birth are expected to decrease – an interregional gap of about 7 years is expected by 2045-2050, down from approximately 9 years in the period 2025-2030 and from almost 12 years at present

Source: Lesthaeghe. 2000; WHO. World Population Ageing 1950-2050

4

0

200

400

Num

ber (

thou

sand

s)

0 20 40 60 80 100Age

OtherMusculoskeletalInjuriesDiabetesChronic respiratoryMentalNeurologicalCardiovascularCancer

1993

0

200

400

Num

ber (

thou

sand

s)

0 20 40 60 80 100Age

2023

Source: Carter R. Presented at HTA Workshop in Beijing 2008Referencing Begg S. 2008 also available athttp://www.aihw.gov.au/bod/index.cfm

Australia 1993–2023

Shift in burden of disease into specialty areas - oncology and neuroscience - will increase demand for services

5

Higher per capita health expenditure for elderly will further increase

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

0-4 5–14 15–24 25–34 35–44 45–54 55–64 65–74 75+

pe

r ca

pita

exp

en

ditu

re

Male

Female

Source: Carter R. Presented at HTA Workshop in Beijing 2008Referencing Data from: AIHW (2005) Health system exp. on disease and injury in Australia, 2000-01. AIHW Cat No HWE 28

Australia 2000-2001

6

Health care spend has grown above GDP

Health care spendPercent of GDP, 1960–2006

Health care expenditure/capita in USD 000, PPP, 2005;

0

2

4

6

8

10

12

14

16

1960 1970 1980 1990 2000 2010

1960

15.3%

11.3%

5.1%

4.9%

Growth in percent share of GDP, CAGR2006

2.4%

Health care spend as percent of GDP

1.8%

6.0% 10.6% 1.2%

3.9% 8.4% 1.6%

Source: Source: OECD Health Data 2008, McKinsey

7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2003 2013 2023 2033 2043

UoQ/AIHW (All health expenditure, including private sector

Inter-Generational Report: Federal Govt expenditure only

Productivity Commission (State & Federal Govt – no private expend)

% GDP

9.4 9.29.9

10.8

5.76.8

7.99.0

10.1

4.75.1

6.2

7.9

9.9

Health care spend as % of projected GDP will keep growing

Source: Carter R. Presented at HTA Workshop in Beijing 2008Referencing Data from: Begg S. 2008

Australia 2003-2033

8

Diabetes expenditure

Disease burden (DALYs) Per 100,000 population

USD per diabetic person

Productivity*

*Productivity as performance index is calculated as product of DALY and per capita total expenditure on health, normalized with value of US as 1.0. For country X, (DALY*Cost in US) /(DALY*Cost in Country X)

5.0

3.02.4

1.0

x5.0

232

340267

449

2,4312,713

4,430

6,231

Health care strategy is all about how you spend your moneyUK is about 5 times more productive than US in managing Type II Diabetes

Source: WHO GBD Report 2009; International Diabetes Federation - Diabetes Atlas, ADA, NHS

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Health Care needs drive changes pricing and value assessment

Comparative effectiveness will be used to evaluate

value

Hypothesis Comments

Innovative agreements will become a more common and accepted approach

Innovative pricing models help industry and countries offer access for affordable medicine to appropriate patients

The UK, Australia and Germany are more advance in offering

Health care cost will be shifted to patients

Patients are needing to pay more – as full cash payers or in the form of copays – and demanding more

Tends to rewarded adherent patients with services and lower premiums in the US

In Turkey there are growing trends towards contribution to treatment

Providers may be asked for comparative data even post registration

Cost effectiveness evaluations will take into account all costs, not just those of drugs, providing room for cost-offset arguments

HTA used to assess the most appropriate population to benefit

Reimbursement can be conditional or increased on the provision of additional evidence

Restriction of reimbursement to subgroups of patients in which the price is justified

Reimbursement will be informed by Health

Technology Assessment

Ass

essi

ng

Val

ue

Pri

cin

g

10

Risk pooling empowers budget holders shifting inelastic demand towards elasticity

Price negotiations through risk pooling helps inelastic demand shifted towards elasticDemand from an insurance fund holder for 100 transplant a year

Price

DEMAND CURVE:Inelastic,

Unitary Elastic,Elastic,

n = -1

D

Quantity

InelasticInelastic

Unitary ElasticUnitary Elastic

ElasticElastic

?=?=

Perfectly inelastic demand: changes in the price do not affect the quantity demanded for the goodNeed for heart for transplant – no matter what the price is a person needs one

Relatively inelastic demand:when the change in quantity demanded is less than change in priceNeed for an antibiotic for a resistant bacteriaBudget Impact

Price elasticity of demand:responsiveness in the quantity demanded as a result of change in price

elastic if consumers will only pay a narrow range of prices – sugar

inelastic if consumers will pay almost any price for the product – water

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Value Based – Risk sharing pricing framework

Financial contracting

models

Risk based models

Outcomes based models

• Reimbursement / pricing through financial arrangements- Price-volume agreements- Dynamic benefit schemes (rebate depending on market share targets)- Patient capitation and dose caps

• Different reimbursed price depending on patient sub-groups - by indication

- treatment history

- risk factors

• Different reimbursed price depending on patient outcomes- treatment response

- treatment outcome

Consumer oriented models

• Implementing differentiated pricing models by providing direct benefits to patients

Per

form

ance

Ori

ente

d M

od

els

12

Innovative Pricing approach help create win-win solutions Underlying goal of models similar, but differ in reimbursement price and scheme

Financial Contracting Models - Utilization

Outcomes Based Pricing Models

Risked Based Pricing Models

Price Volume Agreement: e.g. full reimbursement for first 10% of patients, reduced reimbursement for next 20% of patients, no reimburse-ment for all others

Initial 10% of patients

Next 20% of patients

All others

Full response

Partial response

No response

Money back guarantee, e.g. full reimbursement for responders, reduced reimbursement for partial responders, no reimburse-ment for non-responders

High Risk

Moderate risk

Low risk

Reimbursement linked to value and level of risk (e.g. based on diagnostic test)

Patient segments Patient segments Patient segments

13

Technology Assessment (TA) is a concept, which embraces different forms of policy analysis on the relation between science and technology on the one hand, and policy, society and the individual on the other hand. Technology Assessment typically includes policy analysis approaches such as foresight; economic analysis; systems analysis; strategic analysis etc. TA could make policy analysis about:

What is TA?

GMO and environment

Working conditions in the light of increasing

ICT work

The energy situation Privacy in e-governmentGlobalisation and labour

market competences

Potential of nanotechnology in

health care

Sources:http://www.eptanetwork.org/EPTA/what.php

Technology Assessment has three dimensions

•The cognitive dimension - creating overview on knowledge, relevant to policy-making

•The normative dimension - establishing dialogue in order to support opinion making

•The pragmatic dimension - establish processes that help decisions to be made

And TA has three objects

•The issue or technology

•The social aspects

•The policy aspects

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1967 - Technology Assessment first used in the Subcommittee on Science, Research, and Development of the House Science and Astronautics Committee of the U.S. Congress

1972 - the U.S. Congress created the The Office of Technology Assessment (OTA) by Public Law 92–484. OTA provide analysis of the complex scientific and technical issues from 1972 to 1995

1987 - Scientific Technology Options Assessment (STOA)-an official organ of the European Parliament – started releasing reports partnering with external experts.

1990 - The European Parliamentary Technology Assessment Network-EPTA was formally established under the patronage of the President of the European Parliament to advise parliaments on the possible social, economic and environmental impact of new sciences and technologies. E.g. Working in future - structures and trends in industrial work , Vaccine capacity in the UK.

In 1973-1975 roots of Health Technology was established:

• the U.S. Academy of Sciences published a report that examined the implications of four health technologies: in vitro fertilization, choosing the sex of children, retardation of aging, and modifying human behavior

• The National Institutes of Health carried out a rather comprehensive assessment of the totally implantable artificial heart in 1973

• The Swedish Organization, Spri, carried out a cost-effectivenessanalysis of the computed tomography (CT) scanner (the first HTA outside of the US)

From TA to HTA

Sources: Banta. 2009;www.eptanetwork.org/EPTA/about.php; www.europarl.europa.eu/stoa/default_en.htm

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Health Technology Assessment - HTA

HTA studies the medical, social, ethical, (legal) and economic implications of development, diffusion and use of technology and informs policy decision

Its aim is to improve quality and cost-effectiveness of healthcare

Health Technology

Health technology covers any method (intervention) used to promote health, prevent and treat disease and improve rehabilitation or long-term care

Health Technology Assessment is a tool for Decision Making and Priority Setting at Given Resources

Sources: Adapted from http://www.singhealth.com.sg/

Health Services and Health Systems

Rehabilitation Programme

Pharmaceuticals Medical Devices Surgical procedures

Preventive Programme

Policies no longer focused solely on cost-containment,

but achieving value for money

16

Criteria for HTA varies based on country perspective

CriteriaAT

BE CH DE FI FR NL NO SE UK

Therapeutic benefit X X X X X X X X X X

Patient benefit X X X X X X X X X X

Cost-effectiveness X X X X X X X

Budget impact X X X X X X

Pharmaceutical/innovative characteristics

X X X X X

Availability of therapeutic alternatives

X X X X

Equity considerations X X X

Public health impact X

R&D X

Sources: Sorenson 2008

17

Increasing interest in HTA across Asia Pacfollowing trends in the US and EuropeFormal HTA programs

Country – HTA HTA Body since

Australia – MSAC, PBAC

Non-Pharmaceuticals - the Medicare Services Advisory Committee (MSAC) since late 1998

Pharmaceuticals - the Pharmaceutical Benefits Advisory Committee (PBAC) Mandatory economic evaluation since 1993

The Australian Safety and Efficacy Register of New Interventional Procedures—Surgical (ASERNIP-S) since 1998

HTA at state government level within public hospitals

Taiwan – CDE

New Zealand Health Technology Assessment (NZHTA) since 1997

Source: Hailey D. 2009; Sivalal S. 2009; Chang-yup Kim, 2009; Teerawattananon Y. 2009

Thailand – HITAP

South Korea – HIRA

Health Intervention and Technology Assessment Program (HITAP) was established in 1996

HTA is actively used for policy decisions

An agency of the National Health Insurance (NHI), the Health Insurance Review and Assessment Service (HIRA) is responsible for working-level benefit determination since 2000

HTA Center within HIRA was tasked to perform HTA in 2007 Plans to introduce new national independent organization for HTA and based

on the model of the NICE of the UK

New Zealand – NZHTA

Center for Drug Evaluation (CDE) - HTA division since 2007

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Key Principles for the Improved Conduct of Health Technology Assessments for Resource Allocation Decisions

1. The goal and scope of the HTA should be explicit and relevant to its use

2. HTA should be an unbiased and transparent exercise

3. HTA should include all relevant technologies

4. A clear system for setting priorities for HTA should exist

5. HTA should incorporate appropriate methods for assessing costs and benefits

6. HTAs should consider a wide range of evidence and outcomes

7. A full societal perspective should be considered when undertaking HTAs

8. HTAs should explicitly characterize uncertainty surrounding estimates

Source: Sullivan S. Future Trends Workshop, Seoul 2008, Singapore 2009, Drummond 2008

From Future Trends Workshop 2008-2009

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Key Principles for the Improved Conduct of Health Technology Assessments for Resource Allocation Decisions

9. HTAs should consider and address issues of generalizability and transferability

10. Those conducting HTAs should actively engage all key stakeholder groups

11. Those undertaking HTAs should actively seek all available data

12. The implementation of HTA findings needs to be monitored

13. HTA should be timely

14. HTA findings need to be communicated appropriately to different decision makers

15. The link between HTA findings and decision making processes needs to be in all transparent and clearly defined

Source: Sullivan S. Future Trends Workshop, Seoul 2008, Singapore 2009, Drummond 2008

Michael F. Drummond University of York, J. Sanford Schwartz University of Pennsylvania, Bengt Jonsson Stockholm School of Economics, Bryan R. Luce United BioSource Corporation, Peter J. Neumann Tufts University, Uwe Siebert UMIT—University for Health Sciences, Medical Informatics and Technology, Sean D. Sullivan University of Washington; International Journal of Technology Assessment in Health Care, 24:3 (2008), 244–258.

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Key Principles for Improved Health Technology Assessment: Identify and inform organizational, procedural and methodological best practice

Source: Sullivan S. Future Trends Workshop, Singapore 2009; Neumann 2009 accepted for publication

Australia (PBAC), Brazil (ANVISA), Canada (CADTH), Germany (DAHTA@DIMDI, IQWiG), Korea (HIRA), Sweden (TLV, SBU), Taiwan (CDE), the United Kingdom (NICE), and United States (Blue Cross/Blue Shield, CMS, DERP, Wellpoint).

Many of the organizations support and implement certain principles, such as being explicit about their HTA goals and scope; considering a wide range of evidence and outcomes; and seeking all available data

Other principles, such as taking a full societal perspective; having a clear system for setting priorities; explicitly characterizing uncertainty surrounding estimates; monitoring the implementation of HTA findings; and considering the generalizability and transferability of results receive much less backing

There is also variation in the degree to which organizations incorporate appropriate methods for assessing costs and benefits

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HTA systems: room for improvement

HTA’s role and utility in decision-making and priority-setting of health care systems and impact on innovation

Risk of using HTA as a cost-containment measure

HTA governance including transparency, accountability and stakeholder involvement in the HTA process

Stakeholder agreement on methods, evidence requirements and cost-effectiveness thresholds employed during the assessment process

Delays in the HTA process restricting patient access to treatments

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Discussion pointsIssues? Resources? Knowledge Networks?

Despite the fact that Turkey is advanced on the equity dimension in Health Care, HTA has been relatively slow in gaining much of a foothold. What are the factors that play role in this? Political support? Capacity? Investment?

How to speed up capacity building in Turkey? Human resources? Resources in general? Network? What should be the role for stakeholders in capacity building?

What is the potential value of Information Centers and Knowledge Networks?

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Information Centers and knowledge networks for HTAcan accelerate collaboration

International Network of Agencies for Health Technology Assessment (INAHTA)• Accelerate exchange and collaboration among agencies

• Promote information sharing and comparison

• Prevent unnecessary duplication of activities.

HTA on the net; A Guide to Internet Sources of Information from Institute of Health Economics is a toolkit with links• specialized bibliographic databases relevant to the subject of the assessment;

• data from government and regulatory agencies;

• administrative databases;

• industry studies, and advice from experts in the field

NHS Economic Evaluation Database (NHS EED): published economic evaluations of health care interventions

Source: http://www.inahta.org/HTA/http://www.ihe.ca/publications/library/2008/health-technology-assessment-on-the-net-10th/