AFFORDABILITY OF NEW DRUGS
FACTS AND FIGURES
Health Policy Workshop 26 november 2014
Outline




What do we spend on orphan drugs and other
expensive drugs?
What is “affordable”?
What do we know about prices?
What is in the pipeline?
Uptake and budget impact of orphan drugs in the Netherlands
2006
2007
2008
2009
2010
Number of orphan drugs
Total
11
22
26
31
36
Number of patients treated with orphan drugs
Total
2,189
3,603
4,625
6,493
8,152
Budget impact of orphan drugs (millions)
Total
€61.2
€97.9
€158.6
€192.7
€225.9
2011
2012
41
43
8,786
9,762
€241.4
€260.4
Spending on new cancer drugs
much higher than on orphan drugs
KWF, Toegankelijkheid van dure kankergeneesmiddelen, Nu en in de toekomst, Signaleringscommissie Kanker van KWF
Kankerbestrijding, 2014
Spending on other ‘expensive’ drugs (non orphan)
Bron: http://www.geneesmiddelendebat.nl/docs/Mijn%20documenten/afbeeldingen/Cijfers/Berekening_kosten_Dure_Geneesmiddelen.pdf
The 1000$ a day pill

Hepatitis C
The 1000$ a day pill

Hepatitis C
 About
$90 000 for a full course
 Currently available for ~1000 patients in NL
 Potentially ~100 000 patients in NL
 Would cost ~ euro 7 billion…
Outline




What do we spend on orphan drugs and other
expensive drugs?
What is “affordable”?
What do we know about prices?
What is in the pipeline?
What is affordable?
Ability to pay?
Type of drug
Rough estimate costs (2014),
€ million
Orphan drugs
300
Other ‘expensive drugs’* 1,200
* > 10 000 euro pppy
= 2% of total health spending (publicly financed 70 billion euro)
What is affordable?
Social and payer perspectives
Drug spending outside hospitals
Drug spending in hospitals
What is affordable?
From a social perspective

Willingness to pay for additionale life year?
 Literature:
value of a QALY (quality adjusted life year),
value of statistical life (year)
 Estimates € 40 000 – € 120 000
 Statistical vs identifiable life year
 Ethical norms: rule of rescue
 See Dijkgraaf later today
Outline




What do we spend on orphan drugs and other
expensive drugs?
What is “affordable”?
What do we know about prices?
What is in the pipeline?
“…the cost of the new generation of drugs is
getting out of all proportion to the added
benefit.” (Cavalli 2013).
Cavalli, Franco. 2013. “An Appeal to World Leaders: Stop Cancer
Now.” The Lancet 381(9865): 425-6.
Caveat: list price ≠ net price
http://www.imsconsultinggroup.com/deployedfiles/consulting/Global/Content/Our%20Latest%20Thinking/Recent%20Topics/Q3%202013
%20IMSCG%20PMA%202013%20A0%20Price%20of%20Innovative%20Oncology.pdf
Berndt et al., Pricing in the Market for Anticancer Drugs,
Prices in the US, MIT working paper August 29, 2014
prices converted to 2013 price level
$120 000
Not sure that this translates to the Dutch situation..
price new cancer drugs per life year gained < 65 000 euro
Source: Volkskrant, 20 11 2013
Some (most?) orphan drugs above 120 000 threshold
But (some of?) these drugs save identifiable lifes
Orphan drugs with highest number of
highest budget impact (2012)
RankTrade name
1
Glivec®
2
Revlimid®
3
Revatio®
4
Thalidomide Cellgene®
5
Tracleer®
RankTrade name
1
Naglazyme®
1
Elaprase®
3
Myzoyme®
4
Soliris®
5
Laronidase®
RankTrade name
1
Myozyme®
2
Glivec®
3
Revlimid®
4
Tracleer®
5
Somavert®
users, highest prices and
Patients
1,485
1,089
1,052
1,030
901
Cost/Patient
€600,000
€600,000
€474,857*
€358,000
€300,000
Budget impact (millions)
€40.3
€36.4
€36.2
€23.0
€14.3
Outline




What do we spend on orphan drugs and other
expensive drugs?
What is “affordable”?
What do we know about prices?
What is in the pipeline?
What is in the pipeline?
Hirsch, B. R. et al., (2014), The Impact Of Specialty Pharmaceuticals As Drivers Of Health Care Costs. Health Affairs, 33(10), 1714-1720.
Predicted total spending growth on pharmaceuticals
Bron:: Orphan Drugs in Development for
Rare Diseases, Phrma 2011
Future budget impact orphan drugs unknown
“To predict the future budget impact of orphan drugs in the Netherlands, detailed
information is needed on availability of individual orphan drugs in the Netherlands,
number of patients using these drugs, and prices of orphan drugs in the Netherlands,
also in relation to generic competition for orphan drugs. This information is yet
unavailable for the Netherlands. Further research on these aspects is needed before
a prediction of the future budget impact of orphan drugs in the Netherlands can be
made.”
Projections for France and Sweden
OMP budget impact as percentage of total pharmaceutical market: observed and
predicted data.
Hutchings et al. Orphanet Journal of Rare Diseases 2014 9:22 1750-1172-9-22
Generic competition for biologicals?
Biosimilars cost $100–
$200 million to develop
and take 8–10 years to
produce. In comparison,
generic medications cost
$1–$5 million to develop
and take 3–5 years to
produce.
“Because of the cost and complexity of biosimilar development and production, it is expected that
biosimilars will be discounted 20–40 percent from the brand-name product. In contrast, the FDA
estimates that generic small molecules are discounted 80–85 percent from the brand-name
products with which they compete.
Bron: Bradford R. Hirsch, Suresh Balu, and Kevin A. Schulman, Spending On Specialty Pharmaceuticals: The Impact Of
Specialty Pharmaceuticals As Drivers Of Health Care Costs, Health Aff October 2014 33:101714-1720
Prices fall after patent expiration
D. Lakdawalla, T. Philipson, Y. Wang Intellectual Property And Marketing , NBER Working Paper 12577, 2006
Prices should fall after patent expiration
but probably to a lesser extent for large molecules
Hirsch, B. R. et al., (2014), The Impact Of Specialty
Pharmaceuticals As Drivers Of Health Care Costs. Health Affairs,
33(10), 1714-1720.