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ANALYSIS: Jane Wells and Claire Cheong-Leen NICE appraisals should be everybody's business BMJ 2007; 334: 936-938 [Full text]

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UK OFT pricing proposal - a necessity to fund new drugs or new indications

Brian Barr Godman, Alan Haycox, Vittorio Bertele', and Ulrich Schwabe   (9 May 2007)

Dealing with opportunity cost – a New Zealand perspective on trastuzumab funding

R Scott Metcalfe, Steffan Crausaz, Jackie Evans, and Matthew Brougham   (11 May 2007)

UK OFT pricing proposal - a necessity to fund new drugs or new indications 9 May 2007
Brian Barr Godman, Visiting Researh Scientist Mario Negri and Visiting Research Fellow University of Liverpool University of Liverpool, L69 7ZH and Mario Negri Pharmacology Research Institute, Milan, Italy, Alan Haycox, Vittorio Bertele', and Ulrich Schwabe Send response to journal: Re: UK OFT pricing proposal - a necessity to fund new drugs or new indications	There continues to be insufficient resources to fund all new technologies and new indications approved by NICE despite government directives and a large increase in NHS funding leading to variable implementation[1,2,3]. This can also have a detrimental effect on funding other services with Primary Care Trusts (PCTs) required to remain within budget[4]. The Office of Fair Trading (OFT) recent suggestion of a value-based pricing approach in the UK[5] has caused considerable debate[6,7]. We believe it is workable building on reforms in other European countries to release valuable resources. The OFT proposal of a 25% premium for brand products once generics are available is more generous than other European countries. In France, Italy, Poland, and Sweden for instance patients have to pay the difference if they wish a more expensive brand[8,9,10]. In Austria, brand prices must be similar to the generic once the third one is available for continued reimbursement[8]. The proposal is similar though to the differential that exists for generic and brand prices in Germany[11]. The OFT has also proposed a maximum 50% premium for patent protected products versus the prices of generics in a class or related classes to encourage choice. This has similarities with pricing calculations in Italy[9] and more generous than reimbursed brand prices in Germany in reference classes[11]. In Sweden there will be a maximum 25% premium over generic prices for existing patent protected products in classes unless good reason[12,13]. The alternative would be keeping brand prices the same but instigating proportional rebates. This is because the UK is a reference country for prices in the EU[5] and rebates are well accepted in return for higher prices in EU countries. Consequently, the OFT proposal is persuasive and in accordance with other European reforms so should be workable in the UK. The alternatives would be either to tighten the cost/QALY threshold[14], give NICE an annual notional budget to fund its advice alongside suggested areas for disinvestment[14], proactively switch patients from high cost brand drugs to generics[15], or further delay acceptance and funding by Primary Care Trusts (PCTs) for new drugs or indications approved by NICE as they strive to provide a range of services. These alternatives would not be in the best interests of patients with NICE already saying no to new cancer drugs and PCTs having difficulties funding for instance HERCEPTIN in early breast cancer[4,16]. Switching patients will require considerable effort as prescribing is complex, GPs still obtain their information from the industry[17], and there is limited awareness of drug prices[5]. Additional delays and/ or possibly tougher approval criteria are also not in the best interests of innovative pharmaceutical companies seeking to reap the rewards of their efforts. Email addresses for correspondence: Godman@marionegri.it; ahay@liv.ac.uk References 1. Audit Commission Health National Report. Managing the financial implications of NICE guidance September 2005. Audit Commission Publications, PO Box 99, Wetherby LS23 75A 2. Walley T, Mrazwek M, Mossialos E. Regulating pharmaceutical markets: Improving efficiency and controlling costs in the UK. Int J Health Plann Mgmt 2005; 20: 375 - 398 3. Cullum N, Dawson D, Lankshear A, et al. The evaluation of the dissemination, implementation and impact of NICE guidance – final report. April 2004 NICE website (www.nice.org.uk) accessed January 2007 4. Wells J and Cheong-Leen C. NICE appraisals should be everyone’s business. BMJ 2007; 334:936-938 5. Office of Fair Trading (UK). The Pharmaceutical Price regulation System – An OFT study. February 2007 – www.oft.gov.uk (sourced 6 March) 6. Major S. NHS pays £500mn too much for prescription drugs. BMJ 2007;334: 383 7. Collier J. The Pharmaceutical Price Regulation Scheme. BMJ 2007; 334: 435-36 8. Simoens S, De Coster S. Sustaining Generic Markets in Europe. Research Centre for Pharmaceutical Care and Pharmaco-economics 2006 (email www.egagenerics.com) 9. Rocchi F, Addis A, Martini N, et al. Current national initiatives about drug policies and cost control in Europe: the Italy example. J Ambulatory Care Manage 2004; 27 (2): 127 – 131 10. Andersson K, Sonesson C, Petzold M, et al. What are the obstacles to generic substitution? An assessment of the behaviour of prescribers, patients and pharmacies during the first year of generic substitution in Sweden. Pharmacoepidemiol Drug Saf. 2005 May;14(5):341-8 11. Busse R, Schreyoögg J, Henke KD. Regulation of pharmaceutical markets in Germany; improving efficiency and controlling expenditures? Int J Health Plann Mgmt 2005;20:329-349 12. Working guidelines for the pharmaceutical reimbursement review. Reference 1023/2003 June 2006 – LFN website – www.lfn.se 13. Wessling A, Lundin D. The review of drugs against disease caused by acid stomach – a summary. LFN website – www.lfn.se 14. Maynard A, Bloor K, Freemantle N. Challenges for the National Institute for Clinical Excellence. BMJ 2004;329: 227-229 15. Moon JC, Bogle RG. Switching statins. BMJ 2006; 332:1344-1345 16. Barrett A, Roques T, Small M, and Smith R. How much will Herceptin really cost? BMJ 2006;333;1118-1120 17. Prosser H, Almond S, Walley T. Influences on GPs’ decision to prescribe new drugs – the importance of who says what. Family Practice 2003; 20 (1): 61-68 Competing interests: None declared
Dealing with opportunity cost – a New Zealand perspective on trastuzumab funding 11 May 2007
R Scott Metcalfe, Chief Advisor Population Medicine, public health physician PHARMAC, Level 14 Cigna House, 40 Mercer St, PO Box 10 254, Wellington 6143, NEW ZEALAND, Steffan Crausaz, Jackie Evans, and Matthew Brougham Send response to journal: Re: Dealing with opportunity cost – a New Zealand perspective on trastuzumab funding	Jane Wells and Claire Cheong-Leen [1] tell a familiar story about funding of trastuzumab (Herceptin) in early breast cancer. We agree with their conclusion about the risk of making poor trade-offs if national policy decisions about treatment do not consider affordability in the context of all healthcare provision. New Zealand’s approach has differed to other countries, including funding nine weeks’ treatment. In New Zealand, the Pharmaceutical Management Agency (PHARMAC) applies nine decision criteria when making pharmaceutical funding decisions (http://www.pharmac.govt.nz/who_are_pharmac.asp), has a fixed budget, and integrates clinical and economic assessment to help determine the next best use of this funding. This framework allows PHARMAC to explicitly understand the opportunity costs that would arise from national medicines funding decisions – that is, to prioritise in the context of other medicines or health services [2], as highlighted internationally with the opportunity costs of trastuzumab.[3, 4] This framework has led PHARMAC to a different conclusion than other funding bodies on various occasions, including trastuzumab. Public funding for a 9-week course of trastuzumab for early breast cancer will be made available in New Zealand from 1 July 2007[5] – see http://www.pharmac.govt.nz/herceptin.asp. A major issue with trastuzumab has been the lack of comprehensive information to inform a funding decision. This is often the case for funding applications, where company-sponsored clinical trial data mainly aims to satisfy criteria for regulatory approval. However, to enable well-informed funding decisions, funders need data that inform judgements about the relative effectiveness of medicines, including optimal treatment regimens (dose/duration/combinations etc). Worldwide, the need to ensure companies face the right incentives for data provision is only becoming greater as more expensive medicines, with potentially small incremental clinical benefits, become available. This lack of relevant information for funding decisions has been evident in the cost effectiveness analyses of trastuzumab in early breast cancer performed internationally [6, 7, 8, 9] and by PHARMAC [10] – see http://www.pharmac.govt.nz/pdf/030307c.pdf. All were forced to give wide ranges of plausible outcomes, largely driven by uncertainty around the long-term durability of treatment benefit. In the New Zealand setting, none of the plausible outcomes gave sufficient confidence that 12 months of trastuzumab treatment would provide sufficient health gains to justify its high cost or opportunity cost.[*] However, unlike NICE’s single technology appraisal process [1, 11], PHARMAC was able to consider additional information generated from the FinHer study, which examined a nine week course of trastuzumab given concurrently with taxane chemotherapy.[12] (http://www.pharmac.govt.nz/pdf/030307i.pdf) Even with conservative assumptions about the extent and duration of treatment benefit, PHARMAC’s revised analysis [10] indicated that the reduced costs associated with this regimen (considering the benefits available at that cost) ensured the regimen would be a good investment relative to other options [**]. From the data currently available, this nine week regimen appears to provide at least similar health benefit to the longer duration (12 month) schedules, but is a more practical regimen, with reduced impact on health budgets, hospital service delivery, and patients’ time (http://www.pharmac.govt.nz/pdf/030307h.pdf). The optimal sequence and duration of trastuzumab has yet to be identified. PHARMAC remains open to the possibility of funding longer regimens of trastuzumab, if data indicate such funding does not result in unacceptable opportunity costs.[*] To this end, PHARMAC has already committed funding for international efforts (the SOLD trial) to resolve the question of duration.[13] Scott Metcalfe, Steffan Crausaz, Jackie Evans, Matthew Brougham Email address for correspondence: scott.metcalfe{at}pharmac.govt.nz Footnotes: * PHARMAC's original CUA estimate for the 12 month sequential regimen (base case NZ$75,000 per QALY [10]) might in fact have been optimistic, given now the apparent lack of significant benefit in the unpublished results from trial N9831 arm B comparing 12 months sequential therapy with usual care (n=1,964) [14, 15] and the reduced effect after 2 years median follow-up from HERA.[16, 17] (http://www.pharmac.govt.nz/pdf/030307i.pdf) PHARMAC waits with interest for further publications arising from these two studies. ** PHARMAC estimated the revised CUA for a nine-week concurrent regimen, under fairly conservative assumptions with respect to the extent and duration of benefit, to be NZ$14,500 -NZ$16,500 per QALY.[10] Trastuzumab in this setting would therefore be as, or more, cost-effective than many other medicines PHARMAC has funded. The nine-week concurrent regimen is likely to be at least four times more cost-effective than the 12 month sequential regimen (50 QALYs per million dollars spent for nine-weeks trastuzumab, 12.5 QALYs per million spent for 12 months trastuzumab). References [1] Wells J, Cheong-Leen C. NICE appraisals should be everyone’s business. BMJ 2007; 334:936-938 http://www.bmj.com/cgi/content/full/334/7600/936 [2] Brougham M, Metcalfe S, McNee W. Our Advice? Get a budget! HealthCare Papers 2002;3:83-6. http://www.longwoods.com/hp/3-1DrugPolicy/HP31DrugPolicy.pdf [3] Herceptin and early breast cancer: a moment for caution. Lancet. 2005 Nov 12;366(9498):1673. http://www.thelancet.com/journals/lancet/article/PIIS0140673605676702/fulltext [4] Barrett A, Roques T, Small M, Smith RD. How much will Herceptin really cost? BMJ. 2006 Nov 25;333(7578):1118-20. http://www.bmj.com/cgi/content/full/333/7578/1118 [5] PHARMAC media release 3 May 2007. 350 women each year to benefit from Herceptin funding decision. http://www.pharmac.govt.nz/pdf/030307.pdf. [6] Ward S, Pilgrim H, Hind D. Trastuzumab for the Treatment of Primary Breast Cancer in HER2 Positive Women: A Single Technology Appraisal. University of Sheffield School of Health and Related Research (ScHARR), May 2006. http://www.nice.org.uk/page.aspx?o=328487 [7] Belgian Health Care Knowledge Centre (KCE). Trastuzumab in early stage breast cancer. KCE reports vol. 34C, 2006. http://kce.fgov.be/index_en.aspx?ID=0&SGREF=5211&CREF=7198. [8] Liberato NL, Marchetti M, Barosi G. Cost effectiveness of adjuvant trastuzumab in human epidermal growth factor receptor 2-positive breast cancer. J Clin Oncol. 2007 Feb 20;25(6):625-33. [9] Kurian AW, Thompson RN, Gaw AF, Arai S, Ortiz R, Garber AM. A cost-effectiveness analysis of adjuvant trastuzumab regimens in early HER2/neu-positive breast cancer. J Clin Oncol. 2007 Feb 20;25(6):634-41 [10] PHARMAC TAR 75 Trastuzumab (Herceptin) in HER-2 positive early breast cancer with 9 week regimen CUA. Released May 2007. http://www.pharmac.govt.nz/pdf/030307c.pdf [11] Hind D, Pilgrim H, Ward S. Questions about adjuvant trastuzumab still remain. Lancet 2007; 369:3-5. http://www.thelancet.com/journals/lancet/article/PIIS014067360760004X/fulltext [12] Joensuu H, Kellokumpu-Lehtinen PL, Bono P, Alanko T, Kataja V, et al; FinHer Study Investigators. Adjuvant docetaxel or vinorelbine with or without trastuzumab for breast cancer. N Engl J Med. 2006;354(8):809-20. http://content.nejm.org/cgi/content/full/354/8/809 [13] PHARMAC media release 16 February 2007. PHARMAC supporting international trial and continuing assessment of funding options. http://www.pharmac.govt.nz/pdf/160207.pdf [14] Perez EA. Further Analysis of NCCTG-N9831. Slide presentation ASCO annual meeting 2005, available online at http://www.asco.org/ac/1,1003,_12-002511-00_18-0034-00_19-005815-00_21-001,00.asp [15] Romond, EH, Perez EA, Bryant J, et al. Trastuzumab plus Adjuvant Chemotherapy for Operable HER-2 positive breast cancer. N Engl J Med 2005;353(16):1659-1672. http://content.nejm.org/cgi/content/full/353/16/1673 [16] Piccart-Gebhart M.J. Procter M, Leyland-Jones B, et al. Trastuzumab after Adjuvant Chemotherapy in HER2-Positive Breast Cancer. N Engl J Med 2005;353(16):1659-1672. http://content.nejm.org/cgi/content/full/353/16/1659 [17] Smith I, Procter M, Gelber RD, Guillaume S, Feyereislova A, et al. 2 year follow up of trastuzumab after adjuvant chemotherapy in HER2-positive breast cancer: a randomised controlled trial. Lancet 2007;369:29-36. http://www.thelancet.com/journals/lancet/article/PIIS0140673607600282/fulltext Competing interests: None declared