Pre-Project Form for candidate subcontractors regarding the research project:
High drug prices. In search of possible scenario’s to steer away
from the impasse
1
BACKGROUND
1.1
CONTEXT
This project is conducted as a collaboration between the Belgian Healthcare Knowledge
Centre (KCE) and Zorginstituut Nederland (ZIN). Its results will be presented to the occasion
of the closing of the Dutch presidency of the Council of the EU.
The administrative coordination of the project is done by KCE.
1.2
PROBLEM DESCRIPTION
Over the last decades the price of new medicines has exploded. Innovative drugs are often
introduced on the market at a very high price, which seems to be disconnected from the
investment cost in research and development. The reason is that the marketing company is in
a monopoly situation and moreover there is a lack of international coordination to control drug
pricing. The prices of new medications have increased very significantly over the last two
decades, e.g. in oncology, as illustrated below.
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For 51 oncology drugs approved by FDA from 2009 through 2013, the median US costs per
year of treatment in 2015 amounted to $137 952. In addition, the study from the National
Cancer Institute, found that prices did not correlate well with how novel a drug was or whether
it prolonged life versus just was shrinking tumors.1
A recent example is Opdivo® in the treatment of squamous NSC lung cancer. Overall survival
was prolonged with 3.2 months. Opdivo® costs $150,000 per year of treatment.
Even higher prices are seen for orphan drugs, e.g. Cerezyme® for Gaucher disease costs
about $300,000 per year for life. Kalydeco® for cystic fibrosis also costs about $300,000 per
year.
Other examples illustrate that modifications of an existing molecule can also be associated
with major price increases. For example, Neupogen®, first in class filgrastim was followed in
the market by Neulasta® (pegfilgrastim), which was launched at a significant premium
(approximately 7 times the price of regular filgastrim) by the same manufacturers – Amgen.
There is also growing concern about huge price increases on older drugs, associated with the
development of a new indication or not.
Ibuprofen, costing approximately €0,50 per gram over the counter for its oral formulation, was
also approved in an intravenous formulation by the brand name of Pedea® for the treatment
of patent ductus arteriosus costing around €10 000 per gram.
Tecfidera®, a drug marketed by Biogen for the treatment of multiple sclerosis was launched in
the US at US$54 900 per patient per year. Its main active ingredient is dimethyl fumarate
available over the counter at approximately US$56/1000gr.
Alemtuzumab, a second-line therapy for chronic lymphoid leukaemia (CLL), was withdrawn
from the markets in the US and Europe in 2012 to prepare for a much higher-priced relaunch
aimed at multiple sclerosis.
More recently, Daraprim® was acquired by Turing Pharmaceuticals, a start-up. The price was
raised immediately from $13.50 to $750 a tablet, a 5000% raise bringing the annual cost of
treatment for some patients to hundreds of thousands of dollars.
The new directly acting antivirals against the hepatitis C virus (e.g. Sovaldi®) are priced at
such a high level that even relatively wealthy countries cannot cope with the huge budget
impact if the medication would be reimbursed for all who need it.
Many purchasers (governments, health insurers, etc…) are not really armed to set limits to
these prices, nor to set reasonable boundaries to the willingness to pay. As complaints grow
about exorbitant drug prices, pharmaceutical companies are coming under pressure to
1
http://oncology.jamanetwork.com/article.aspx?articleid=2212206&utm_source=google_plus_page&utm_medium=so
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disclose the development costs and profits of those medicines and the rationale for charging
what they do. The examples illustrate that the current system is flawed and that high prices of
new drugs are not always linked to R&D or production costs.
Admittedly, sufficiently high prices of drugs are required to support research and development
efforts which carry a high risk and a high cost. On average, only one in every 5,000 compounds
that drug companies discover and put through preclinical testing becomes an approved drug.
Of the drugs started in clinical trials on humans, only 10 percent are eventually approved.
When estimating the cost of developing a single drug, a very important variable is the (high,
>10%) discount rate that is often applied to past R&D costs. In addition, it is known that most
of the R&D expenditure goes to new drugs of little therapeutic benefit, and there are indications
that even for these drugs pricing towards the upper limit of the “willingness to pay” is often
pursued by companies.
As a matter of fact, profit margins in the pharmaceutical industry (and the banking sector) are
higher than in any other industry. Profits are often around 20%. So even if profits were cut by
a third or a half, this would probably leave sufficient incentive to assume the risks of drug
development.
A growing number of observers, politicians and even CEOs from pharmaceutical companies
admit the current trend of increasing drug prices is not sustainable in the long run. Local
healthcare payers increasingly struggle to find the budgets needed to provide coverage for
these expensive molecules. The patient and public health may not be well served as a
consequence. Public payers are recurrently maneuvered into difficult moral dilemmas. Clearly,
the problem with very high-cost medicines needs to be addressed in a more systematic way
and a comprehensive solution is needed to preserve access to valuable drugs to all who need
them.
1.3
RESEARCH OBJECTIVE
The project seeks to find creative scenarios for the future to get out of this bottleneck situation.
The objective is to develop and explore various new business models resulting in more
sustainable pricing mechanisms and policies, in consultation with international stakeholders
including patients, industry, academics, regulators, payers, government representatives from
Europe and the US.
1.4
POLICY RELEVANCE & TARGET POPULATION (END CLIENT)
This topic is of high relevance for the access of patients to innovative and existing drugs. It is
also of high relevance for healthcare payers, the pharmaceutical industry and the regulatory
agencies.
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2
RESEARCH QUESTION
What could be possible future business models and pricing mechanisms that can guarantee
both an ongoing support for pharmaceutical R&D and the availability of valuable innovations
to those who need them at a sustainable price? What assumptions were made in each of these
scenarios, and what are their respective strengths and weaknesses?
2.1
METHODOLOGY
This thought experiment will be conducted in consultation with international stakeholders
including patients, industry, academics, regulators, payers, government representatives from
Europe and the US. Scenarios for alternative business models will be thoroughly explored
through an open discussion among the stakeholders.
After an exploratory round looking for similar work conducted in the past, and including one
on one interviews with 20 to 25 well-selected key stakeholders or academics with expertise in
the field, two consecutive 1½ day round table workshops with around 20 stakeholders will be
organized in the first half of 2016 (March and April 2016).
A draft full report and an executive summary containing the options explored and the feedback
or position of the relevant stakeholders will be presented early in May 2016, to be finalized by
June 1st, 2016.
3
SPECIFIC INFORMATION REGARDING THE TENDER
3.1
TIMELINES
Deadline submission of project proposals: 19/11/2015
Start of project (T0): 01/12/2015
End of project: 30/06/2016
3.2
PRICING
The price proposed by the contractor has to include all costs i.e. those for salaries, travel,
overhead, and tax (e.g. VAT if applicable). Travel and subsistence costs for the two workshops
are not included and will be covered by a separate budget.
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3.3
DELIVERABLES2, 3
3.3.1
Deliverable 1
-
Output: Methodology of stakeholder consultation and interview guide
-
Activities: Recruitment of stakeholders and planning
-
Deadline: 31/01/2016
3.3.2
Deliverable 2
-
Output: Intermediate working document 1, based on the results of the interviews and
on the inventory of previous work along the same lines as this project, for the
preparation of the first round table workshop.
-
Deadline: 29/02/2016
3.3.3
Deliverable 3
-
Output: First round table: facilitation and notes taking
-
Deadline: 20/03/2016
3.3.4
Deliverable 4
-
Output: Intermediate working document 2, based on the results of the first round table,
for the preparation of the second round table workshop.
-
Deadline: 10/04/2016
3.3.5
Deliverable 5
-
Output: Second round table: facilitation and notes taking
-
Deadline: 21/04/2016
3.3.6
Deliverable 6
-
Output: Draft full report and an executive summary containing the options explored and
the feedback or position of the relevant stakeholders
-
Deadline: 12/05/2016
3.3.7
Final deliverable
2
3
-
Output: Delivery of the final scientific report consisting of all previous deliverables and
additional synthesis and discussion chapters.
-
This final report is written in English, and is maximum 30 pages long (not counting the
appendices). Quotes in the text should appear in their original language. However,
If one of the deliverables consists of a literature review, it has to be explicitly mentioned in this deliverable’s content that the
delivery to the KCE of copies of the articles that were reviewed, is included in the price. On no account, the KCE will allow a
claim for a payment of copyrights in addition to the price provided for the literature review deliverable.
If one of the deliverables consists of carrying out a study, i.e. an experiment as defined by the law of 7 May 2004 on
experimentation on human beings (trial, study or investigation carried out on human beings with a view to developing biological
or medical knowledge), the Contractor will be considered as the sole project coordinator as defined by said law. As the project
coordinator, before the study is carried out, it must take out insurance pursuant to Article 29 of that law. The cost of that
insurance should be mentioned explicitly in the tender, failing which it is deemed to be included in the overall price.
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translation of quotes may be required depending on the validators’ background.
References are placed at the end of the scientific report, using Endnote.
-
Activities: Assemble all deliverables into one coherent report and write a synthesis and
general discussion chapter, as well as a highly synthetic brochure presenting the key
results in an attractive and accessible way to a wider audience. Elaborate an effective
communication/marketing plan for the final product.
-
Deadline: 01/06/2016
The deadlines mentioned above are approximate, except the final deadline. The candidate is
expected to draw up a detailed planning of the project using the KCE template. If the deadlines
are adapted, this should be motivated in the project proposal.
The subcontractor’s participation in preparatory, progress and debriefing meetings with the
project sponsors meetings (in Brussels) is included in the price of the deliverables.
4
CRITERIA FOR GRANTING THE PROJECT
Four criteria will be taken into consideration when granting this project.
4.1
RELEVANCE OF THE PROPOSED METHODOLOGY
-
Does the project proposal demonstrate a good grasp of the subject?
-
Does the proposed approach of the research show that it will be carried out in the best
possible way?
4.2
RELEVANCE OF PROJECTED OUTPUT
-
Are there any improvements suggested on the methodology described in the present
pre-project form that will increase the likelihood of a high-quality and timely output?
-
Can the contractor show relevant examples of outputs produced in previous
assignments of a comparable nature?
4.3
PRICE
4.4
AVAILABILITY, SKILLS AND EXPERIENCE OF THE RESEARCHERS
ASSIGNED TO THE PROJECT
-
Which researchers will actually be involved?
-
What is their level of competence in the field of research? What previous experience
can they present in similar work?
-
What will be their level of availability to conduct the project within the given time
constraints?
-
What are their contractual ties with the contractor?
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KCE template for project planning
Project n°:
HSR 2013-03 (drug pricing)
Start of project (T0): 01/12/2015
End of project: 30/06/2016
Del
ive
rab
les
What to do?
Who?
Output
Timing
Start
Description of activities per
deliverable. If necessary,
this can be done in several
steps.
Examples: Preparation of
Sectoral Committee;
Demanding data; Extraction,
transformation, loading
(ETL) of data; Literature
review; Economic modelling;
Data collection; Data
analysis; Organisation of a
meeting; Attend a meeting;
etc...
Indicate for each
deliverable the
task executor (who
actually does the
job) and the
person who has
the final
responsibility
Description of the output (the content) that has
to be delivered.
Start
date
End
date on
which
specific
output is
expected
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
Whole team
Final scientific report consisting of all
previous deliverables and an additional
synthesis and discussion chapter.
This final report has to be ready for the
validation: it is written in English, using
the KCE Word template and is maximum
100 to 120 pages long (not counting the
appendices).
References are placed at the end of the
scientific report, using Endnote.
A validated scientific report
DD/MM/YY
Only the KCE is
responsible
Synthesis in French and Dutch with
recommendations
DD/MM/YY
Whole team
Power point presentation (max. 10 slides)
Only the KCE is
responsible
KCE report ready for publication
(scientific report in English & Synthesis in
French, Dutch and English)
Examples: Authorization request to the
Sectoral Committee; Request for data;
Chapter of the scientific report; Database;
Tables in SAS or Excel; Power point
presentation; Executive summary; etc...
1
2
3
4
...
Assembling all
deliverables into one
coherent report
Write the synthesis and
discussion chapters
Attend the validation
meeting and correct the
scientific report on the
basis of remarks made
by the validators
Summarize the scientific
report in a Synthesis and
formulate policy
recommendations
Attend the KCE Board of
Directors and present the
report
Correct the Synthesis on
the basis of remarks
made by the members of
the Board of Directors
Write text for press
release
End
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
DD/MM/YY
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