Susanne Michel
Head of HTA Evidence Strategy, Ascenian
Michael Epstein
Head of Commercial Strategy and Pricing, Ascenian
A ‘pay for performance’ model should be adopted for rare disease drugs, with pricing adjusted as evidence of real-world effectiveness becomes available.
Across Europe, agencies that decide on reimbursement for drug development — such as NICE in the UK — want assurance that any new therapies will deliver good health value for patients and good monetary value for health systems.
“These agencies are dealing with public money,” says Susanne Michel, Head of HTA Evidence Strategy at Ascenian, a pricing and market access consultancy serving the pharmaceutical, biotechnology, medical devices and medical diagnostics industries. “It’s why they have strict evidence requirements and insist on seeing long-term data from drug trials featuring large numbers of patients.”
Pricing strategy
By the nature of rare conditions, patient numbers are low, which makes it difficult to design the type and length of trials sought by payers. “The US faces the same challenge,” explains Michael Epstein, Ascenian’s Head of Commercial Strategy and Pricing.
“The difference is that there isn’t one central agency, such as NICE. Instead, there are hundreds of private payers. But their concerns are the same: they want value for money.”
Companies must engage in price and value potential assessment much earlier.
Susanne Michel
Payment model
In Europe and the US, Michel and Epstein insist that new pricing and evidence assessment approaches are needed to speed the delivery of orphan drugs.
“The question is, what is a ‘fair price’ for an orphan drug that may not work or lose its effectiveness after five years or 10 years, etc?” asks Michel. “This is why new strategies must be used to define fair price.”
Rather than paying one large amount, Epstein explains that a ‘pay for performance’ model should be adopted with pricing adjusted as evidence of real-world effectiveness, safety and durability becomes available.
For instance, annual instalment payments could be made over five years, with lower payments in later years if a drug loses potency.
New evidence parameters
“New parameters of evidence should be established for orphan drugs,” says Michel. “Payers traditionally reject surrogate endpoints on methodological grounds and not accurately displaying the patient benefit, but there may be a good case to accept them for some orphan drugs — at least with other data combined to allow inferring the patient benefit.”
Pharma companies need to change their operations, too. “At the moment, reimbursement prices are negotiated once all trials are finished and all evidence is in,” says Michel. “Companies must engage in price and value potential assessment much earlier. Changes must be made — on both sides — so rare disease patients can have access to the drugs they need.”
