Periodic Reporting for period 1 - HI-PRIX (Health Innovation Next Generation Payment & Pricing Models)
Periodo di rendicontazione: 2023-01-01 al 2024-06-30
The emergence of high-price innovative therapies is exerting strong financial pressure on healthcare payers worldwide. Most of the recently approved advanced therapy medicinal products are for oncology indications, often in rare and ultra-rare populations. Given the high per-patient prices, which can exceed one million Euros, payers’ ability to absorb multiple gene therapies while delivering affordable access to healthcare is questionable.
The coronavirus disease 2019 pandemic has highlighted advantages and limitations of different current mechanisms for funding research, development, manufacturing, and distribution of biomedical innovation. Traditionally transparency about research and development costs is lacking, as manufacturers rarely make public the costs incurred in product development, as part of the pricing and reimbursement negotiation. Similarly, in 2019 a world-first subscription payment model was launched in the UK to incentivise pharmaceutical companies to develop new drugs for resistant infections. The idea behind this scheme involves decoupling payment from the volume sold and, instead, rewarding pharmaceutical companies for the development of novel antibiotics with regular payments based on their overall value to society.
In addition, system access and affordability issues exist for future Alzheimer’s disease treatments. Because the target population is potentially very large, even cost-effective treatments may be unaffordable given skyrocketing budget impact.
This array of contemporary issues facing third-party payers worldwide illustrates how a single payment model is not going to provide an effective answer in every situation, but rather innovative pricing and payment models need to be considered and developed to ensure financial sustainability of both public and private health care systems, adequate incentives for innovation, and fast access for high-cost innovative medicines.
Therefore, the overall objectives of the Health Innovation Next Generation Pricing Models (HI – PRIX) project are:
1. to extensively map and formulate new pricing and payment schemes that can be used across technology classes, therapeutic areas, setting and healthcare systems/geographies together with a related set of principles that may guide successful adjustment and flexible implementation to the particular context of use;
2. to investigate the impact on competitiveness, innovation, equity and affordability of a pipeline of contracting modalities for health innovations to move from regulatory approval through value assessment to adoption;
3. to address the challenges and concerns of payer, manufacturer, healthcare professional, and patient perspectives regarding different models of pricing by sustaining an effective dialogue across stakeholders’ groups about the trade-offs between affordability, innovation and patient access.
The coronavirus disease 2019 pandemic has highlighted advantages and limitations of different current mechanisms for funding research, development, manufacturing, and distribution of biomedical innovation. Traditionally transparency about research and development costs is lacking, as manufacturers rarely make public the costs incurred in product development, as part of the pricing and reimbursement negotiation. Similarly, in 2019 a world-first subscription payment model was launched in the UK to incentivise pharmaceutical companies to develop new drugs for resistant infections. The idea behind this scheme involves decoupling payment from the volume sold and, instead, rewarding pharmaceutical companies for the development of novel antibiotics with regular payments based on their overall value to society.
In addition, system access and affordability issues exist for future Alzheimer’s disease treatments. Because the target population is potentially very large, even cost-effective treatments may be unaffordable given skyrocketing budget impact.
This array of contemporary issues facing third-party payers worldwide illustrates how a single payment model is not going to provide an effective answer in every situation, but rather innovative pricing and payment models need to be considered and developed to ensure financial sustainability of both public and private health care systems, adequate incentives for innovation, and fast access for high-cost innovative medicines.
Therefore, the overall objectives of the Health Innovation Next Generation Pricing Models (HI – PRIX) project are:
1. to extensively map and formulate new pricing and payment schemes that can be used across technology classes, therapeutic areas, setting and healthcare systems/geographies together with a related set of principles that may guide successful adjustment and flexible implementation to the particular context of use;
2. to investigate the impact on competitiveness, innovation, equity and affordability of a pipeline of contracting modalities for health innovations to move from regulatory approval through value assessment to adoption;
3. to address the challenges and concerns of payer, manufacturer, healthcare professional, and patient perspectives regarding different models of pricing by sustaining an effective dialogue across stakeholders’ groups about the trade-offs between affordability, innovation and patient access.
The project’s progress can be monitored through deliverables and milestones.
Briefly, over the first reporting period:
-“Pay for innovation Observatory” – an online catalogue of pricing and payment schemes for health innovation has been released;
-Two literature reviews on the role of indirect medical and environmental costs in economic evaluations and budget impact analyses have been completed;
-Economic theory and empirical evidence behind price discrimination for newly-approved indications for the same product has been reviewed;
-A review of key components in payment schemes for health care innovations embedded in primary and integrated care settings has been released;
-Two reports have been produced on costs of the development of medicines and public Contributions to R&D of health innovations;
-A unique database with detailed mapping of policies and incentive mechanisms to foster pharmaceutical innovation and access to innovation has been created;
-Results of simulation on the impact of various payment schemes on cost differences for both, manufacturers and society, specifically focusing on different sources of uncertainty have been produced;
-A deliverable on “Equity implications of including indirect medical costs and environmental impacts in economic evaluations informing pricing and reimbursement” (D3.1) has been released.
Briefly, over the first reporting period:
-“Pay for innovation Observatory” – an online catalogue of pricing and payment schemes for health innovation has been released;
-Two literature reviews on the role of indirect medical and environmental costs in economic evaluations and budget impact analyses have been completed;
-Economic theory and empirical evidence behind price discrimination for newly-approved indications for the same product has been reviewed;
-A review of key components in payment schemes for health care innovations embedded in primary and integrated care settings has been released;
-Two reports have been produced on costs of the development of medicines and public Contributions to R&D of health innovations;
-A unique database with detailed mapping of policies and incentive mechanisms to foster pharmaceutical innovation and access to innovation has been created;
-Results of simulation on the impact of various payment schemes on cost differences for both, manufacturers and society, specifically focusing on different sources of uncertainty have been produced;
-A deliverable on “Equity implications of including indirect medical costs and environmental impacts in economic evaluations informing pricing and reimbursement” (D3.1) has been released.
During the first 18 months, the HI-PRIX project has made steady progress towards the achievement of the scientific, economic and societal impact presented in the Description of Action:
Scientific Impact
The entire work conducted as part of this research and innovation action has the ambition to produce scientific outcomes and is currently engaging six PhD students and three postdocs. HI-PRIX work has progressed to develop scientifically sound methodologies and interdisciplinary approaches to assess, determine value and pay for new health technologies and create new tools and instruments (e.g. a pay-for-innovation observatory, a handbook to guide transparent assessment of development costs; a European Tool for estimating indirect medical costs, a scientific model to simulate the impact of innovative payment schemes) to be made available to the health industry, regulators and public authorities, and the relevant scientific community.
Economic Impact
During the first 18 months, HI-PRIX has made progress in the study of successful implementation and maintenance of innovative pricing and payment schemes by building a framework rooted in implementation science, based on the assessment of costs, benefits, barriers and enablers for the analysis. In addition, a simulation model has been proposed and developed to simulate the impact on players in the pharmaceutical market of various payment schemes, specifically performance-based risk-sharing agreements, refund and multi-annual instalment agreements, for a Haemophilia B gene therapy (Hemgenix). A unique database mapping policies and incentives with product-level R&D data, country and firm-level indicators, and where feasible, market data and health need data have been built to proceed with the assessment of comparative effectiveness of incentive mechanisms for pharmaceutical innovation in key areas of need. The evaluation of various payment schemes, such as French Liste-en-sus has been completed, and an empirical cost-effectiveness analysis comparing non-integrated versus integrated management of AoVS disease is ongoing.
Societal Impact
During the first 18 months, the project has examined the equity implications of excluding or including indirect medical costs and environmental impact in economic evaluations informing pricing and reimbursement decisions, and is making progress towards identifying which equity-issues mitigation strategies are most promising and what is the feasibility of new pricing models, based on interaction with regulatory officials and provider representatives.
Scientific Impact
The entire work conducted as part of this research and innovation action has the ambition to produce scientific outcomes and is currently engaging six PhD students and three postdocs. HI-PRIX work has progressed to develop scientifically sound methodologies and interdisciplinary approaches to assess, determine value and pay for new health technologies and create new tools and instruments (e.g. a pay-for-innovation observatory, a handbook to guide transparent assessment of development costs; a European Tool for estimating indirect medical costs, a scientific model to simulate the impact of innovative payment schemes) to be made available to the health industry, regulators and public authorities, and the relevant scientific community.
Economic Impact
During the first 18 months, HI-PRIX has made progress in the study of successful implementation and maintenance of innovative pricing and payment schemes by building a framework rooted in implementation science, based on the assessment of costs, benefits, barriers and enablers for the analysis. In addition, a simulation model has been proposed and developed to simulate the impact on players in the pharmaceutical market of various payment schemes, specifically performance-based risk-sharing agreements, refund and multi-annual instalment agreements, for a Haemophilia B gene therapy (Hemgenix). A unique database mapping policies and incentives with product-level R&D data, country and firm-level indicators, and where feasible, market data and health need data have been built to proceed with the assessment of comparative effectiveness of incentive mechanisms for pharmaceutical innovation in key areas of need. The evaluation of various payment schemes, such as French Liste-en-sus has been completed, and an empirical cost-effectiveness analysis comparing non-integrated versus integrated management of AoVS disease is ongoing.
Societal Impact
During the first 18 months, the project has examined the equity implications of excluding or including indirect medical costs and environmental impact in economic evaluations informing pricing and reimbursement decisions, and is making progress towards identifying which equity-issues mitigation strategies are most promising and what is the feasibility of new pricing models, based on interaction with regulatory officials and provider representatives.