Price Erosion Research Articles

Development Perspectives for Curative Technologies in Primary Demyelinating Disorders of the Central Nervous System with Neuromyelitis Optica Spectrum Disorder (NMOSD) and Myelin Oligodendrocyte Glycoprotein Antibody-Associated Disease (MOGAD) at the Forefront.

Primary demyelinating disorders of the central nervous system (CNS) include multiple sclerosis and the orphan conditions neuromyelitis optica spectrum disorder (NMOSD) and myelin oligodendrocyte glycoprotein IgG-associated disease (MOGAD). Curative technologies under development aim to selectively block autoimmune reactions against specific autoantigens while preserving the responsiveness of the immune system to other antigens. Our analysis focused on target patient selection for such developments, carefully considering the relevant clinical, regulatory, and market-related aspects. We found that the selection of patients with orphan conditions as target populations offers several advantages. Treatments for orphan conditions are associated with limited production capacity, qualify for regulatory incentives, and may require significantly shorter and lower-scale clinical programs. Furthermore, they may meet a higher acceptable cost-effectiveness threshold in order to compensate for the low numbers of patients to be treated. Finally, curative technologies targeting orphan indications could enter less competitive markets with lower risk of generic price erosion and would benefit from additional market protection measures available only for orphan products. These advantages position orphan conditions and subgroups as the most attractive target indications among primary demyelinating disorders of the CNS. The authors believe that after successful proof-of-principle demonstrations in orphan conditions, broader autoimmune patient populations may also benefit from the success of these pioneering developments.

HPR205 Predicting Drug Price Erosion in Germany Associated With Indication Expansion, to Understand the Potential Launch Price Benchmark for a New Product

HPR205 Predicting Drug Price Erosion in Germany Associated With Indication Expansion, to Understand the Potential Launch Price Benchmark for a New Product

Balancing medical innovation and affordability in the new healthcare ecosystem in China: Review of pharmaceutical pricing and reimbursement policies

AbstractThe China Basic Medical Insurance Program was created in 1999 with three objectives: equal accessibility, affordability, and quality. Today, it has become the biggest medical insurance program in the world, covering 95% of China's population. Since 2015, China's healthcare ecosystem has been reshaped by increasing innovation, which has in turn been driven by regulatory reform, enhancement of research and development capability, and capital market development. There has also been improved regulatory efficiency to reduce lags in launching drugs. In 2022, nearly 20% of novel active substances launched globally were from China. China has also risen to become the second biggest contributor to innovation in terms of pipelines. Using a “fast‐follow” strategy, many locally developed innovative drugs can compete with products from multinational companies in their quality and pricing. However, China's pharmaceutical and biotechnology industry will continue to face challenges in pricing and reimbursement, as well as a shortened product lifecycle with rapid price erosion. The government has already accelerated the timeline for updating the drug reimbursement list and is willing to create a high‐quality medical insurance program. However, some obstacles are hard to overcome, including reimbursement for advanced therapies, limited funding and an increasing burden of disease due to an aging population. This article reviews the trajectory of medical innovation in China, including the challenges. Looking forward, balancing affordability and innovation will be critical for China to continue the trajectory of growth. The article also offers some suggestions for future policy reform, including optimizing reimbursement efficiency with a focus on high‐quality solutions, enhancing the value assessment framework, payer repositioning from “value buyer” to “strategic buyer”, and developing alternative market access pathways for innovative drugs.

New pricing models for generic medicines to ensure long-term sustainable competition in Europe.

Background: Price erosion of generic medicines over time as a result of existing pricing policies in combination with increasing operational costs of these products due to high inflation, undermine long-term sustainable competition in European off-patent medicines markets. Therefore, the aim of this study is to identify new potential pricing models for retail generic medicines in Europe, examine their pros and cons, and illustrate them with examples inside or outside the pharmaceutical sector. Methods: A targeted literature review, one-to-one interviews and a joint advisory board meeting with experts from five European countries were carried out to assess potential pricing models for generic medicines. Results: We identified ten pricing models that can be applied to generic medicines. The tiered pricing model is viewed as a sustainable solution ensuring competitiveness, but requires market monitoring using a supportive IT infrastructure. De-linking the price of generic medicines from that of the off-patent originator medicine prevents the originator from forcing generic medicines' prices to unsustainable levels. Higher costs due to inflation can be compensated in the automatic indexation model. Other pricing models that have less implementation potential include the one-in-one/multiple-out model, tax credits, value-based pricing, volume for savings and guaranteed margin/fee models. The hypothecated tax and cost allocation models, which add a patient fee to generic medicines prices, are not likely to be socially acceptable. Conclusion: When considering a new pricing model for generic medicines, the impact on innovative medicines and the characteristics of the healthcare system in a given country need to be taken into account. Also, there is a need to continuously follow up the level of competition in off-patent medicines markets and to identify sustainability risks.

Measurement-Based Procurement Approach for Biosimilars in Italy: A Position Paper

Measurement-Based Procurement Approach for Biosimilars in Italy: A Position Paper

HPR33 Price Erosion for Haemato-Oncology Drugs in European Markets

To examine price evolution over time for select oncology drugs in major European markets.

Variation in the prices of oncology medicines across Europe and the implications for the future

Introduction/Objectives: Health authorities are facing increasing challenges to the sustainability of their healthcare systems because of the growing expenditures on medicines, including new, high-priced oncology medicines, and changes in disease prevalence in their ageing populations. Medicine prices in European countries are greatly affected by the ability to negotiate reasonable prices. Concerns have been expressed that prices of patented medicines do not fall sufficiently after the introduction of lower-cost generic oncology medicines. The objective of this study was to examine the associations over time in selected European countries between the prices of oral oncology medicines, population size, and gross domestic product (GDP) before and after the introduction of generic versions. Evidence of periodic reassessments of the price, value, and place in treatment of these medicines was also looked for. The goal of this review was to stimulate debate about possible improvements in approaches to reimbursement negotiations. Methodology: Analysis was performed of reimbursed prices of three oral oncology medicines (imatinib, erlotinib and fludarabine) between 2013 and 2017 across Europe. Correlations were explored between GDP, population size, and prices. Findings were compared with previous research regarding prices of generic oral oncology medicines. Results: The prices of imatinib, erlotinib and fludarabine varied among European countries, and there was limited price erosion over time in the absence of generics. There appeared to be no correlation between population size and price, but higher prices of on-patent oral cancer medicines were seen among countries with higher GDP per capita. Conclusion: Limited price erosion for patented medicines contributed to increases in oncology medicine budgets across the region. There was also a concerning lack of evidence re-assessments of the price, value, and place in treatment of patented oncology medicines following the loss of patent protection of standard medicines. The use of such proactive re-assessments in negotiating tactics might positively impact global expenditures for oncology medicines.

PMU37 Influence of Patient Population & HTA Assessment on Price Erosion Due to Indication Expansion in Europe: Evaluation across Oncology & NON-Oncology Biopharmaceutical Innovations.

Indication expansion has been the cornerstone of lifecycle management of biopharmaceutical products to cater to unmet needs of different patient populations. While standardized HTA assessments in EU tend to evaluate indications on their own merit, accompanying patient volume impacts the pricing of subsequent indications after launch. The objective of this research was to identify trends correlating the HTA ratings and patient population on price erosion in both oncology and non-oncology drugs, in France & Germany.

Reassessing the cost-effectiveness of nivolumab for the treatment of renal cell carcinoma based on mature survival data, updated safety and lower comparator price

Aims: The aim of this study was to estimate the cost-effectiveness of nivolumab versus everolimus for second-line treatment of renal cell carcinoma (RCC) based on mature data, updated safety and decreased everolimus price. Materials and methods: A 3-state (pre-progression/progression-free disease, progressive disease and death) Markov model was developed from the perspective of the Australian health care system. Two scenarios were tested. Scenario 1 used 30-months clinical data and scenario 2 used updated 80-months clinical data with updated everolimus price. Inputs for quality-of-life and costs were informed by the literature and government sources. Incremental cost-effectiveness ratio (ICER) per quality adjusted life years (QALY) gained was reported and an ICER threshold of AU$75,000 was assumed. Threshold analysis was performed, and uncertainty was explored using one-way and probabilistic sensitivity analyses. Results: In scenario 1, the model estimated 1.73 QALYs at a cost of AU$105,000 for nivolumab and 1.48 QALYs at AU$38,000 for everolimus with an ICER = AU$266,871/QALY gained. A rebate of 54.4% was needed for nivolumab to reach the ICER threshold. For scenario 2, 1.93 QALYs at AU$111,418 was estimated for nivolumab and 1.60 QALYs at AU$31,942 for everolimus with an ICER of AU$213,320/QALY gained. The rebate needed to reach the ICER threshold was 54.9%. One-way sensitivity analyses for both scenarios showed that the cost of nivolumab, time horizon and utilities were main drivers. The cost-effectiveness acceptability curves highlighted the differences in cost-effectiveness of the two scenarios, as well as significant uncertainty in the results. Conclusions: A 54% rebate of the published price is needed for nivolumab to be cost-effective in Australia for the treatment of RCC. At that rebate, nivolumab remains cost-effective despite severe price erosion of everolimus because of improved longer term follow-up data. We recommend that generic price erosion should be accounted for when performing cost-effectiveness analysis.

PMU60 DO COMPANIES SEQUENCE THE LAUNCH OF INDICATIONS FOR MULTI-INDICATION PRODUCTS?

The majority of payors are unable to provide separate prices for different indications of a multi-indication product. Current pricing practices may create incentives for manufacturers to sequence the launch of different indications in order to avoid price erosion. This study examines the impact of pivotal trial design, pivotal trial results, and disease prevalence on the launch sequence of multi-indication products.

PRO27 IMPLICATIONS OF INDICATION EXPANSION OF ORPHAN DESIGNATED DRUGS ON EXISTING PRICES ACROSS EUROPEAN MARKETS

The number of orphan drugs expanding into new orphan indications after first EMA approval has been increasing in Europe throughout the last decade. This study examines the implications of indication expansion for orphan designated drugs on existing prices across EU5 markets as a function of clinical value and level of unmet need. Qualitative in-depth interviews (n=14) with key stakeholders within EU5 markets were conducted, complemented with secondary research of different biomedical and price databases, to gather insights into the impact of expanding onto new orphan labels for products with previously established reimbursed prices. The likelihood of sustaining list prices is high for orphan drugs in European markets after expanding into a new orphan indication with high unmet need. In France, likelihood of potential list price cut is highest, as demonstrated by eculizumab (2-7%, 2014-17). Net prices are likely to decrease in all countries, with discounts from 5% to 10% depending on patients’ volume increase, perceived additional clinical value and level of unmet need observed in the new indication. Price drops can also vary across countries depending on market archetype. In budget conscious markets, accurately defining the new target population can lead to price maintenance if the drug provides a clear clinical benefit and the manufacturer is able to demonstrate a high unmet need. In HTA-driven and cost-effectiveness markets, price erosion is directly linked to whether the drug fulfils the country-specific HTA requirements or is considered to be cost-effective, respectively. Orphan drugs can manage to retain list prices in most EU5 markets after label expansion. However, net price discounts are generally re-negotiated to achieve reimbursement for a new indication depending on the additional clinical benefit and the level of unmet need.

PNS170 CHEAP OR TIMELY DRUG? PRACTICAL IMPACT OF EXTERNAL REFERENCE PRICING POLICY IN THE EUROPEAN UNION

External reference pricing (ERP) is one of the major determinants of drug prices regulation in EU markets. The aim of our work was to analyze the consequences of ERP rules for both companies and the national authorities by i) optimal market access timing or ii) overall availability of drugs on certain markets. Calculation of the optimal launch sequence of countries with an innovative drug was part of the analysis. We used hierarchical clustering of countries together with the evolutionary optimization heuristic (genetic algorithm). This algorithm optimizes the sequence of countries by maximizing the estimated revenue based on the market characteristics (ERP rules, willingness to pay threshold (WTP), population/market size, and others). The optimal launch sequence was calculated. As expected, we typically see that larger countries with high WTP are favored. On the other hand, countries with i) aggressive ERP rules (e.g. minimal price referenced), iii) low WTP, iv) countries referring to or v) referenced by a large number of countries stand in the back of the sequence. The main reason is that they cause greater price erosion in further countries. The unintended consequence of strong price referencing can, therefore, be lower availability of innovative drugs or shortage of older essential drugs, as companies prefer not to enter such markets and postpone market access. Our analysis provides both a guideline for companies when launching an innovative drug and crucial information for national authorities about the consequences of their ERP policies. The suggestion for national policies on how to keep drug prices low while ensuring their good availability could be setting weaker ERP rules (e.g. average rather than minimum price) and take advantage of confidential price discounts. That reduces the risk of further price erosion in other markets and increases the attractivity of such markets for innovative medicines.

PCN280 CHARACTERIZING THE CONTINUED RELEVANCE OF IRP IN ITALY: A SIMULATION ANALYSIS OF TOP PRESCRIBED MOLECULES IN ONCOLOGY

While international reference pricing (IRP) is recognized as a prevalent tool, there is some debate surrounding its continued relevance amid the rise of confidential discounting. In a country such as Italy, where IRP is used informally and managed-entry agreements (MEAs) are relatively common, its continued influence is uncertain. The present analysis sought to identify whether there is evidence that IRP continues to hold relevance in the Italian context. An Excel model was developed to simulate IRP application, drawing on ex-manufacturer prices in potential reference countries from three months prior, and calculating the delta relative to historic Italian prices. A basket of 22 drugs representing the top prescribed molecules in oncology (as reported by OsMed, the National Observatory on the Use of Medicines), supplemented by one known to be subject to MEA, was used. Controlling for active ingredient, pack size, strength, form and market authorization holder, Italian prices were compared to simulated prices in individual EU countries and the EU-wide average. 73% of the molecules exhibited simulated prices falling within a delta of ±5% of actual launch prices in Italy. In general, the smallest deltas were observed with reference to the EU-wide average simulated price, as opposed to simulated prices in individual reference countries. Actual Italian prices tended to remain largely stable, despite increasing deltas relative to simulated prices over time. The present analysis suggests that IRP continues to exert influence on Italian prices, particularly at time of launch. Moreover, the EU average price may be an important benchmark in price negotiations. Although pricing contracts may be re-negotiated every couple of years, the present results suggest that IRP may not be an extensive driver of price erosion downstream of launch. Additional analysis on larger sample sizes is needed to clarify the generalizability of these findings.

PBI69 INSIGHTS INTO FUTURE AUTOIMMUNE PRICING DYNAMICS IN EU5 & THE US, USING LEARNINGS FROM RHEUMATOID ARTHRITIS

The rheumatoid arthritis (RA) market has historically had many ‘disruptive’ events (new products and classes, indications extensions, biosimilar launches and new formulations) influencing pricing. The objective for this project was to take learnings from these historical events and apply to an auto-immune condition to predict future price changes in EU5 and the US. An RA price evolution was conducted for EU5 and the US, highlighting key disruptive events and subsequent impact on price. A ‘matching exercise’ between those in the auto-immune space and analogous RA products allowed formation of price projections in each market. In the US, ∼5% annual list price inflation is expected, with pricing dynamics occurring at the net price level. LoE events or biosimilar introduction in the near term (the next 5-7 years) is not expected to significantly impact net price. Although net price is expected to decline with time on the market and class crowding (∼30% reductions seen with anti-TNFs). Conversely, in European markets, disruptive events are expected to change list pricing dynamics. In France especially, a cross-therapy price convergence is expected, catalysed by biosimilar introduction and LoE events. Originator list price erosions may be as high as 40% in 5 years (seen post-biosimilar launch). Dissociation from biosimilar benchmarks may be possible for new launches by targeting sub-groups with a greater unmet need (with 5-15% price premiums seen in RA), and may have a lower long-term list price erosion. In Germany, list prices are expected to remain stable over time unless a biosimilar launch reaches ∼20% market share, causing a formation of reference price group with the originator; then list price drops are expected. The auto-immune space is set to become more competitive, with products across EU5 and the US providing discounts to remain competitive

How Changes in Reimbursement Practices Influence the Financial Sustainability of Medicine Policy: Lessons Learned from Slovakia.

Objectives: The aim of this study was to review the impact of new reimbursement requirements for medicines in the Slovak Republic based on legislation that came into force in January 2018. Methods: The new legislation was reviewed. The reimbursement dossiers for medicines and health technology assessments and appraisals, justifications for reimbursement decisions, final reimbursement decisions, and all aspects of the appeal mechanisms have been transparently published on the website of the Slovak Ministry of Health and were used for this analysis. Results: Based on the new legislation, there was no need to submit information about relative effectiveness and cost-effectiveness of medicines with less than 1:50,000 eligible patients prior to reimbursement decisions, and the cost-effectiveness threshold has been increased for all other medicines. The estimated impact of the 2-year budget for the 59 medicines submitted for reimbursement without relative effectiveness and cost-effectiveness analysis was €181,273,698, based on the published submission dossiers. The estimated impact of the 2-year budget for the 45 medicines with evidence of relative effectiveness and cost-effectiveness was €178,566,634. In contrast to the easier market access criteria for new original medicines, the new legislation enforces stricter price erosion criteria for generic and biosimilar medicines. Consequently, the number of generic and biosimilar entries was reduced from 242 in 2017 to 224 in 2018. Conclusions: Although some of the new reimbursement applications were not approved by the Ministry of Health, many new medicines were added to the Slovak pharmaceutical reimbursement list based on “balanced assessment” requirements; hence, the system became financially unsustainable. It was necessary to change the legislation from January 2019.

PHP74 - A REVIEW OF THE INFLUENCE OF INTERNATIONAL REFERENCE PRICING (IRP) ON LAUNCH SEQUENCING IN EUROPE

Many countries set prices of pharmaceuticals by referencing the average, or some other metric, of a number of other countries in Europe. The objective of this study was to examine the influence of International Reference Pricing (IRP) across major markets in Europe in terms of the level of price preservation, and to provide insight into the optimal launch strategies within these markets. We developed a 10-year Excel-based model accounting for recurring international price referencing across Europe. The frequency of referencing, the basket of countries referenced and the distribution mark-up on pharmacy purchasing prices were based on published data, supplemented by recent experiences of product launches. The optimal strategy for launch sequencing was determined by price maintenance and revenue maximisation. With the varying duration of reimbursement processes across countries, strategies to delay product launch post marketing authorisation can directly affect the reimbursement price. Launches should commence in countries that utilise free pricing systems, which subsequently improves price setting in other reference countries downstream. Free pricing countries include Germany, the UK and Sweden. Countries employing a minimum or 90% of the lowest 3 prices within their basket, such as Spain, Bulgaria and Croatia, would need to be sequenced later to delay price erosion. Even when launching with exactly the same price across Europe, IRP was found to typically cause price erosion of up to 12% in some markets. Pharmaceutical pricing models fit prices by optimising the order in which a product is launched across markets. IRP policies alongside regulatory policies form key factors to the planning and timing of launch sequences. Exploring IRP simulations is critical to maintaining optimal price and identifying launch sequence strategies, although price erosion is unavoidable and should not be prioritised over patient access.

PSY170 - IMPACT OF MULTIPLE INDICATIONS ON PRICE AND ACCESS OF DRUGS FOR AUTOIMMUNE DISEASES

Launching a drug in multiple indications can have an impact on price and access in Europe. The objective of this research was to identify and analyse analogues within the autoimmune diseases area to understand the factors that determine pricing and reimbursement success of drugs with multiple indications in EU5 countries (France, Germany, UK, Italy, Spain). Secondary research was conducted to identify relevant analogues that launched in 2 or more indications. Once analogues were identified, review of HTA assessments for each indication was performed, along with analysis of launch prices and price evolution using IMS data. Two analogues were identified: secukinumab and apremilast. Secukinumab was launched in three indications consecutively - psoriasis (PsO), psoriatic arthritis (PsA) and ankylosing spondylitis (AS). Apremilas was launched in two indications, PsA and PsO, simultaneously. Secukinumab gained access in all 3 indications in EU5, launching at and sustaining a premium price despite the two follow-on indications (PsA and AS) showing no added benefit in HTA assessments. This is due to better HTA outcomes in the first indication (PsO), which had an evidence package that included direct comparative data. In contrast, clinical trials for apremilast were placebo-controlled, with indirect comparative studies indicating inferiority vs biologics, leading to no reimbursement of the PsO indication in Italy and forcing the manufacturer to launch at a significant discount in other markets in order to gain access. Apremilast list price has further dropped in Italy and France post-launch. The research also indicated that to capture the drug’s differentiated values across indications in one combined price, Payers can delay access and price negotiations until all indications have been launched. Strong direct comparative data in one indication can protect against price erosion after the launch of the follow-on indications, even if the follow-on indications do not show additional benefit.

미국 특허법에서의 특허침해로 인한 일실이익 산정방법— 일실판매에 의한 일실이익과 가격침식에 의한 일실이익을 중심으로 —

미국 특허법에서의 특허침해로 인한 일실이익 산정방법— 일실판매에 의한 일실이익과 가격침식에 의한 일실이익을 중심으로 —

An exact static solution approach for the service parts end-of-life inventory problem

This paper studies the spare parts end-of-life inventory problem that happens after the discontinuation of part production. A final ordering quantity is set such that the service process is sustained until all service obligations expire. Also, the price erosion of substitutable or new generation products over time makes it economically justifiable to consider switching to an alternative service policy for repair such as swapping the old product with a new one. This requires the joint optimization of the final order quantity and the time to switch from repair to an alternative service policy. To the best of our knowledge, the problem has not been optimally solved yet either in its static or dynamic formulation. In the current paper, we solve its static version as a bi-level optimization problem. We investigate the convexity of the objective function and give a computationally efficient algorithm to find an exact optimal solution up to any given numerical error level ϵ > 0. We illustrate our approach on some numerical examples and compare our results with earlier works on this problem.

PHP52 - Biosimilar Infliximab Utilization After Patent Expiry: The Case of Colitis Ulcerosa and Rheumatoid Arthritis in Hungary

The importance of biosimilars is increasing as more and more biologicals with significant budget impact are going to lose market exclusivity in upcoming years. Due to expected price erosion, decision makers can improve the allocative efficiency of scarce resources by increasing the utilisation of biosimilars. This study aims to evaluate the impact of the Hungarian reimbursement policy on the uptake of biosimilar infliximab, the first monoclonal antibody (mAB) infliximab with patent expiry in 2013. The utilization of biologicals were analysed retrospectively on individual patient-level data between 2013-2016 provided by the National Institute of Health Insurance Fund Management (NIHIFM). We aggregated patient numbers on mABs, and analysed the initial therapy of new patients and switching rates between mABs in colitis ulcerosa (CU) and rheumatoid arthritis (RA). Data shows that overall market share of biosimilar infliximab in CU increased after patent expiry (33.7%), while in RA it remained marginal (0.2%) by the end of 2016. Compared to other single source biologicals the proportion of new CU and RA patients on infliximab were 50.9% and 2.5%, respectively, all these patients were started on biosimilars. During the study period 25% of CU patients with therapy switch from adalimumab to infliximab were switched to the original product and 75% of the patients were switched to the biosimilar alternative. Majority of RA patients were switched between seven patented active substances and only few patients were switched to multisource infliximab (1.6%). In Hungary the current biosimilar policy shows mixed results in incentivizing the increased uptake of multisource biologicals. Although new patients treated with infliximab started on biosimilars, but majority of RA patient started on other patented products. Policy tools and measures should be developed by the NIHIFM to facilitate biosimilar use, including single switch to biosimilars, and monitor outcomes.