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Define access agreements

Using clear terminology helps all parties manage the conditions for new drugs coming to market

Access definitionMany goods come with a guarantee of performance. But in healthcare, when payers have to decide whether to fund a drug, there is uncertainty, especially at launch, about the actual production of health outcomes from that drug. For example, ten years ago, this was the case for disease modifying drugs in multiple sclerosis (MS) in the UK: the cost of production of a QALY (Quality Adjusted Life Year) associated with them ranged from £10,000 per QALY to over £3m per QALY according to assumptions made (see Table 1 *). 

In order to minimise that uncertainty, an agreement was made between the National Health Service (NHS) and pharmaceutical companies in which the NHS recommended their use under certain conditions, including that data be collected about the real effects on health.

The most popular and accurate definition of risk sharing is that of De Pouvourville et al (Eur J Health Econ, 2006), which describes risk sharing as 'agreements between a payer and a pharmaceutical ... manufacturer where the price level and/or nature of reimbursement is related to the actual future performance of the product in either the research or the 'real world' environment rather than the expected future performance.' 

Interestingly, the author opposes expected performance to actual performance, assuming that there is uncertainty in achieving the intervention performance. Therefore managing performance uncertainty is thought to be the driver behind such types of agreement. 

However, De Pouvourville's definition does not cover agreements whose sole aim is to implement cost containment measures, such as price volume agreement, rebate, or discount. In those cases there is no uncertainty about health outcomes. Instead these mechanisms aim to reduce the net price paid for the drugs by the payers. Too often, such agreements are called risk sharing agreements when they are not. Indeed, in most there is no risk to share. Moreover, any risk identified is shifted solely on to the manufacturer rather than shared between both parties. Therefore the terminology of risk sharing is inappropriate in most cases. 

That is why the Department of Health in the UK proposed the term Patient Access Scheme (PAS) instead. In fact, the UK is the only country which has made the effort to make those agreements reasonably transparent by openly publishing the terms at launch. However, even in the UK, PAS does not seem to be an appropriate term as it occasionally restricts access and leads to much lower usage rates than the drugs would otherwise achieve with a positive recommendation from the National Institute for Health and Clinical Excellence (NICE), which was the case for disease modifying MS drugs. The UK ranked 13 out of 14 developed countries for use of new disease modifying MS products in 2010 despite a PAS being in place since 2002.

Table 1. Examples of coverage with evidence development (based on Carlson et al, Health Policy 2010)

Country

Disease area

Product

Scheme

France - 2003

Schizophrenia

Risperdal Consta (Johnson and Johnson)

RisperidalConsta covered at J&J's asking price in return for studies on hospitalization rate vs. other antipsychotics. If the studies don't show less hospitalizations with the drug, J&J will reimburse a portion of the money spent on the drug.

France - 2010

Type II diabetes

Victoza (Novo-Nordisk)

Observational study to confirm efficacy in real-life settings. The daily cost of treatment will remain at 2.95€ if the study confirms the efficacy. Otherwise it will be lowered.

Germany - 2008

Kidney transplant

Sandimmum optoral, myfortic, certican (Novartis)

Novartis will refund the costs of the drug if a patient loses his/her donor kidney.

Sweden - 2003

High cholesterol

Rosuvastatin, ezetimibe (AstraZeneca, MSD, Schering-Plough)

Additional data is required on the use of the drug in Swedish clinical practice and the long-term effect on the drug on morbidity and mortality.

Sweden - 2007

Cervical cancer

Human papillomavirus quadrivalent (Sanofi Pasteur, MSD)

Additional data is required on ongoing and planned studies in order to determine the cost-effectiveness from a long-term perspective. Data shall be provided every 6 months starting from 01/10/2007.

*UK - 2002

Multiple sclerosis

Interferon beta, glatiramer acetate (Biogen, Schering, Teva/Aventis, Serono)

Patients using Interferon betas or glatiramer acetate are followed for 10 years with treatment effects determined every 2 years. Drug price reduced to maintain cost-effectiveness at £36,000/QALY.

UK - 2007

Alzheimer's disease

Memantine (Lundbeck) 

Memantine is not recommended as a treatment option for patients with moderately severe to severe Alzheimer's disease except as part of well-designed clinical studies.

USA - 2005

Oncology

FDG-PET scan (Multiple)

An FDG-PET scan is covered in patients with brain, ovarian, pancreatic, small cell lung, testicular cancers, and certain indications for cervical cancer in the context of an approved clinical trial.

USA - 2006

Chronic hypoxaemia

Home use of oxygen (Multiple)

The home use of oxygen is covered for beneficiaries with arterial oxygen partial pressure measurements from 56 to 65mmHg or oxygen saturation ≥ 89% who are enrolled subjects in clinical trials approved by CMS and sponsored by the National Heart, Lung & Blood Institute.

 

Innovative Contracting
The term Innovative Contracting was introduced by pharma industry consultants. It has become quite fashionable and is used increasingly to define these types of agreements. However it does not fit either. First, many of these agreements are very old. For example, in the US, Coverage with Evidence Development (CED) was first used in 1995 in Medicare and it has been used for many years in many countries since. Moreover, price volume agreement is one of the most common and oldest trading agreements between buyers and sellers. Hence, 'innovative' is not appropriate here.

That is why the term 'Market Access Agreement' (MAA) is a better fit. This name explicitly refers to an agreement between two or more parties who define together the terms and conditions under which a product will get access to the market. It is imperative that the name matches the practice it describes, as careless use of terms can be very confusing.

MAAs can be grouped into two types: financial agreements and outcome-based agreements. 

Financial agreements are commercial agreements between two or more parties entering into a deal for goods acquisition. For example, a price volume agreement, discount or rebate, cap price, or cost sharing

Outcome-based agreements are part of an insurance or warranty facility: the payer agrees to a price under the insurance that the product will deliver a predefined outcome. This regroups two kinds of MAA: Payment for Performance (P4P) and CED. 

In a P4P agreement, payment is decided for individual cases, ie. patient by patient. While it may seem reassuring for payers to pay only for patients who respond to treatment, the question of when to end the P4P and allocate the intervention its appropriate price is problematic. Indeed the collected data consists of an accumulation of information which is not comparative and does not help to address the relative effectiveness of the drug. Moreover, the management of such agreements is costly and burdensome for the healthcare system as well as for the company. It may also be an obstacle to the prescription of the drugs as it incurs administrative workload for prescribers already under time and work pressure.

On the other hand, CED schemes are based on the assumption that a well-conducted study could address the uncertainty associated with a drug at launch (Table 1). They allow conditional funding for new promising drugs while more conclusive evidence is being gathered to address uncertainty regarding clinical or cost effectiveness. They are also better adapted to address uncertainty as each unanswered question has an appropriate study design, leading to a clear answer. The issue here is often the difficulty in agreeing on the protocol, especially the study design, as well as a lack of initial information about which decisions will be made depending on the magnitude of the outcome. It is easy to agree that price will augment if an endpoint improves, but agreements severely lack specific details, such as what the threshold for improvement should be.

Benefits of MAA
MAA should be considered by payers when they wish to minimise uncertainty and by companies when they want to capture the full value of their drugs and they could not do so otherwise. In fact the actual reason for doing MAA is too often not related to, nor thought of, in terms of uncertainty when it should be. 

The manufacturers are focused on two major issues; to optimise the international reference pricing and to get access to the market. Indeed, in some countries MAA has become a passage obligé for new innovative drugs to achieve market access as payers think paying for success is the way forward.

Payers also use MAAs to reduce the costs of pharmaceuticals while at the same time claiming that new innovative drugs are covered within their formulary.

Too often, MAAs are used to decrease drugs' costs in order to address payers' budget constraints when their real role is to be a guarantee against the uncertainty that faces the payer when a new drug wants  market access. One has to wonder, then, what their future holds.

Of the three types of MAA (financial agreements, P4P and CED), commercial agreements are common across all industry sectors. As a result they will probably live on in the pharmaceutical sector as well. 

Agreements made to deal with uncertainty, however, will need to become more professional; it seems likely that P4P will eventually disappear in favour of CED. But as long as pharma companies' business cases show economic benefits to P4Ps superior to the logistic difficulties when implementing them, they will keep proliferating. Only once they have been victims of their success will they end. Ironically, the more P4P agreements are made, the sooner they will be replaced by CED.

Well designed and transparent CEDs have proved to be powerful tools to reduce uncertainty about drugs' real-life performance. Examples of CED developed in France, Italy and Sweden suggest that reducing payers' uncertainty about drugs' value is indeed feasible when it is the true motivation of payers and the industry.

The European directive implementing high transparency standards will probably lead to less confidentiality in deal-making. If a drug's face price becomes known, it will be used for international reference pricing and pharma companies' global RoI will diminish. This, in turn, may make them lose interest in MAAs. 

Prof Mondher ToumiMorgane Michel

The Authors
Prof Mondher Toumer
(left) is chair of market access at the University of Lyon and Morgane Michel is resident in public health, University of Paris V.



5th July 2011

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