Pharmaceutical Economics

Einleitung / Introduction

The European Medicines Agency offers multiple authorization pathways (e.g. Centralized, Mutual Recognition) aiming to facilitate, standardize and accelerate the authorization of and subsequently patients’ access to pharmaceuticals within the EU. In times of emerging EU exit discussions among members, it is of particular importance, to what extend an EU membership and the centralization of authorization impacts launch delay and availability of pharmaceuticals.

Methode / Method

We exploit two changes to the eligibility for EMA authorization procedures. First, since 2004 several eastern European countries (Poland, Hungary, Czech Republic, Slovenia, Slovakia, Latvia, Lithuania, Estonia, Bulgaria, Romania, Croatia) joint the EU and got access to these procedures. Second, the scope of indications and drug types being mandatory to go through the centralized procedure was subject to extensions (e.g. cancer in 2005). Using both classic and staggered Difference-in-differences approaches, we examine the effects of (a) joining the EU/EMA, (b) voluntary access to the centralized procedure and (c) mandatory access to the centralized procedure on launch delay and availability of pharmaceuticals. European countries not (yet) a member of the EU serve as controls (i.a. Switzerland, Serbia, Bosnia, Turkey, Russia). National launch dates of pharmaceuticals were derived from IQVIA Midas Database.

Ergebnisse / Results

Preliminary results of 1vs1 DiDs are mixed, with only Hungary and Slovakia showing reduced launch delay for comparison (a),(b) and (c) (~12,6 to ~25,4 months, p<0.1), indicating heterogeneity among countries. Staggered DiDs show a decrease in launch delay of (a) ~11,6 months (p=0.002) after joining the EU, (b) ~13,2 months (p=0.001) for voluntary indications, (c) ~10,5 months (p=0.063) for mandatory biologics as well as ~9,3 months (p=0.085) for indications that became mandatory in 2005. Yet, only comparisons (a) and (b) withstand all robustness checks. Availability does not show any significant effects in any case.

Zusammenfassung / Conclusion

We find evidence that joining the EU and gaining access to EMA procedures can significantly reduce the time to patients’ access to innovative pharmaceuticals. This reduction is mostly driven by the subgroup of pharmaceuticals voluntary to centralized authorization. Within the mandatory group we observe a higher share of highly profitable substances (i.a. biologics, cancer) inhibiting larger incentives for manufacturers to launch fast regardless of the authorization procedure, leading to slightly smaller effect sizes. By further ruling out other procedures available to the voluntary group (e.g. mutual recognition), we conclude, that expanding the mandatory scope of EMA’s centralized procedure could further speed up patients’ access to innovative pharmaceuticals.

AutorInnen

Fabian Grünwald, Hamburg Center for Health Economics, Universität Hamburg

Tom Stargardt, Hamburg Center for Health Economics, Universität Hamburg

Einleitung / Introduction

There is a high societal demand for new therapeutic options to treat orphan diseases, especially those for which there are currently no available or effective therapeutic options. With the increasing availability of extremely high-priced Advanced Therapy Medicinal Products, (ATMPs) concerns are being raised, that orphan drugs and other novel specificized therapy methods may impose unsustainable costs to the healthcare system. We therefore examine which factors influence the price of a new orphan drug. We will examine to what extent the size of the target population and thus the potential budget burden play a role in pricing.

Methode / Method

Based on all benefit assessment procedures of orphan drugs between 2011 and 2020 in Germany, market entry prices, negotiated prices, and assessment criteria were evaluated. A piecewise ordinary least squares (OLS) regression was used to model the association between the discounted price and the estimated target population size. To account for non-linearities, separate models were fitted to distinct strata of the data. The identification of the sections was data-driven as each section border corresponds to a 33%-quantile of the population size.

Ergebnisse / Results

The proportion of newly approved orphan drugs, especially those with rather small patient populations of maximum 1,000 patients or less, in all newly approved drugs has continuously increased in recent years. At the end of 2020, 90 orphan drugs were available in Germany. More than half (54%) of these are approved for indications in which there was previously no therapeutic alternative. Based on piecewise regression, the marginal effect of population size on the negotiated price was analyzed on three distinct strata (up to 350 patients, up to 1,600 patients, more than 1,600 patients). In products with very small populations sizes (1st strata), a significant negative relation of population size and price was observed, which was different from the effect in orphan with larger populations.

Zusammenfassung / Conclusion

In the past, significantly higher therapy costs were accepted for drugs with a very small target population. Given increasing rates of new approvals for orphan durgs, the question of how to judge what is an acceptable or fair price of an orphan drug will remain at the heart of future debates about drug prices. To ensure that orphan drugs remain available and affordable in the future, especially in small indications, pay-for-performance contracts can be a suitable option to fairly distribute the uncertainty about the actual benefits and the realized costs between pharmaceutical companies and health insurers.

AutorInnen

Julian Witte, Vandage GmbH

Axel Böhnke, PTC Therapeutics Germany GmbH

Daniel Gensorowsky, Vandage GmbH

Manuel Batram, Vandage GmbH

Wolfgang Greiner, Universität Bielefeld

Aljoscha Neubauer, Institute for Health- and Pharmacoeconomics

Einleitung / Introduction

Innovation has substantially contributed to economic growth and longevity. Nevertheless, technology must be used appropriately to be effective, and the effectiveness of technology may vary by its quality. Yet, the inefficiency of using a medicine inappropriately (i.e. off-label) and the contribution of innovation are not well understood. Causes of variation inappropriate use may originate in that smaller markets are experiencing fewer innovations suitable to treat a condition. The objective of this study was to examine the potential gains from using the right technology (medicine) in the right place (condition) in the context of biopharmaceutical technology, where off-label use has been widely documented.

Methode / Method

We empirically investigate the role of on-label compared to off-label use of medicines and innovation. We study the use of active pharmaceutical ingredients, that means medicines that are authorized by the US Food and Drug Administration to treat a condition in the universe of biopharmaceutical products prescribed in the United States. We combine data from one large pharmaceutical reference database (Thériaque) that identifies 13,561 unique combinations of active ingredients (defined by the World Health Organization’s ATC classification) and labelled health conditions these products have been shown to be effective based on marketing authorization information (as by 3-digit WHO ICD-10 codes). We link these therapies to data of 201,489 patients by 219 health conditions and product level prescription data provided by the US Medical Expenditure Panel Survey, 1996-2015. We estimate fixed effect linear models by condition and individual to investigate the effect of the fraction of medicines used on-label and the effect of using newer compared to older vintage medicine on health care utilization outcomes (e.g. inpatient events) and disability (missed school and work days).

Ergebnisse / Results

The average share of treatments used on label has increased from 41 to 56 percent between 1996 and 2015. Empirical estimates that isolate the effect of appropriateness and innovation suggest that health care utilization and disability are inversely related to both the fraction of medicines used on label and vintage (an indicator of quality). Counterfactual analyses suggest that health care utilization would be lower by 3 to 25% if all medicines would be prescribed on label compared to current lavels. These reductions are equivalent to $467. Off-label use was higher in smaller markets and markets with older compared to newer vintages.

Zusammenfassung / Conclusion

Off-label medicines are presumably technologies that either have no effect or harm the person. We demonstrate that off-label use is attributed to substantial proportions in use of other types of health care and disability by missing school or work.

AutorInnen

Katharina Blankart, Universität Duisburg-Essen / CINCH Health Economics Research Center

Frank Lichtenberg, Columbia University, Graduate School of Business