A new Editorial reviews three solutions to the price and value challenge to reimbursing combination products. Higher thresholds are not justifiable. Evidence to support the use of shorter regimens will take time to develop. Multi-use pricing is the best option to explore.
It is eight years since NICE suggested pertuzumab, when used in combination with trastuzumab and docetaxel for the treatment of HER2 positive breast cancer, might not be cost-effective, even if pertuzumab were offered at zero price. It is seven years since the NICE Decision Support Unit published analysis of how this counter-intuitive situation arises. Combination therapies continue to come to market, often at prices presenting challenges to payers around the world. Indeed, experts agree combination therapies will become increasingly important in oncology.
A new Editorial, Not Cost-effective at Zero Price, in Expert Review of Pharmacoeconomics and Outcomes Research, sets out a broad framework for action. It builds on a workshop held in November 2019 in Australia by the not-for-profit Bellberry organisation, with invited stakeholders from around the world. A report of the workshop was published in May 2020.
The authors, Nick Latimer, University of Sheffield, and OHE’s Adrian Towse and Chris Henshall, explain that the problem arises when the ‘backbone’ oncology drug is priced at the limit of what a payer is prepared to pay given the outcomes delivered. Willingness to pay for a new ‘add-on’ drug to backbone therapy will be limited to the additional benefit. If the combination involves extended duration of treatment using the backbone (as with pertuzumab) as well as other extra costs, then no price may be low enough, let alone the price being sought by the developer. These challenges arise in all situations where coverage and price are linked systematically to the assessment of benefit (and not just where QALYs are used).
Three possible solutions are discussed:
1. Increase the willingness to pay for combination therapies in oncology, over and above that for monotherapy drugs. This is not supported by evidence of public or stakeholder preferences;
2. Improve the outcomes achieved by new combinations, improving clinical development to identify optimum treatment paradigms (such as treatment durations and stopping rules that optimise health benefits and minimise adverse effects and costs). This is important but challenging. Significant progress seems unlikely in the short term;
3. Adjust the price of both constituents of a combination to reflect the value they offer when used in that combination. This is the most feasible way forward to address the challenges of combination therapies in the near future.
Progress depends upon finding ways of aligning individual drug prices with the value attributable to them in that combination – which may be different from the value in monotherapy use or in another combination. Where these drugs are made by the same manufacturer, it can agree to price variations with a payer to achieve this. But, usually, different manufacturers are involved and some form of explicit multi-use pricing is required. This in turn needs some way of agreeing on the value – and therefore the price – of each use.
The authors recognise the challenges in making multi-use pricing work, but conclude that it would be both beneficial and feasible for combination therapies. They go on to discuss how the value and price of each component within a combination could be determined. Various methods have been suggested for value attribution, and work is needed to develop and assess these. But while an agreed approach to value attribution could help, the authors see the negotiation and agreement of prices as the biggest challenge. Ways need to be found to agree on prices for components from different manufacturers that add up to no more than the value-based price of the combination. Issues to be addressed here include the role that an HTA or Payer body could and should play in instigating or joining negotiations between manufacturers, and the ways in which such negotiations could be conducted without contravening competition law.
Where to next? A number of researchers are working on methods to attribute value to individual components in a combination. A recent OHE/Amgen paper on this was described in an OHE blog, and a paper is expected soon from a Takeda sponsored group looking at solutions in England.
Competition law differs by country, but usually bans companies who are competitors from discussing pricing with each other. Mechanisms are therefore needed to enable companies to negotiate prices with each other that are legal within particular jurisdictions. The Takeda sponsored group will publish a possible approach to negotiation in England. Hopefully, this will stimulate similar work in other systems. For example, a trading platform has been proposed.
A number of assessment and payer bodies around the world are still not yet formally engaged. We believe there is a strong case for meetings involving key stakeholders in Europe, the USA, and Asia to discuss the challenges and share ideas for, and practical experience with, solutions.
Latimer, N.R., Towse A. and Henshall C. (2021): Not cost effective at zero price: valuing and paying for combination therapies in cancer, Expert Review of Pharmacoeconomics & Outcomes Research, DOI: 10.1080/14737167.2021.1879644. Available at https://doi.org/10.1080/14737167.2021.1879644
Towse, A., Lothgren, M., Steuten, L., and Bruce, A., 2021. Why we need a new Outcomes-based Value Attribution Framework for Combination Regimens in Oncology. OHE Consulting Report, London: Office of Health Economics. Available at: https://www.ohe.org/publications/why-we-need-new-outcomes-bashttps://www.ohe.org/publications/why-we-need-new-outcomes-based-value-attribution-framework-combination-regimensed-value-at...
Latimer N, Pollard D, Towse A, Henshall C. 2020. Challenges in valuing and paying for combination regimens in oncology. Report of an international workshop convened by Bellberry, held on November 18-20, in Sydney, Australia. May 2020. Available at https://bellberry.com.au/wp-content/uploads/Meeting-report-final-draft-May-2020.pdf
Posted in Pricing and Reimbursement, Value-Based Pricing | Tagged External publications