Keith Tolley, Director, Tolley Health Economics Ltd

IDF Europe Symposium 30th September 2012

1Tolley Health Economics Ltd

Strategic Consulting in Health Economics and Market Access

Reimbursement policies for new drugsConsideration of the evidence on therapeutic

benefit vs similar drugs used in practice to determine:Level of reimbursement.Price drug reimbursed at.

May also contain consideration of cost-effectiveness of new drugs:Added health benefitsResource savings (Incremental) cost of new drug

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Diet and exercise

OAD monotherapy

(in most countries metformin)

OAD combination

therapy 1

OAD combination

therapy 2 Insulin therapy

(e.g. metformin+

OAD)

(e.g. metformin+

2 OADs)

€0.11 €0.28

€2.27

€3.85

€0.29€0.56

€2.25

€3.47

€0.55 €0.72

€4.10

€4.94

Diet + exercise metformin metformin + SU met + SU + TZD* Insulin**

SpainGermanyUSA

Treatment cost per day in Euro (€):

Schematic treatment pathway

Source: SKP research. * Competact + generic SUs (Germany and USA) , Actos + gener. metformin + generic SUs (Spain) ** Including average price for two blood glucose test strips and 40 IU of Lantus

Diet and exercise

OAD monotherapy

(in most countries metformin)

OAD combination

therapy 1

OAD combination

therapy 2 Insulin therapy

(e.g. metformin+

OAD)

(e.g. metformin+

2 OADs)

Diet and exercise

OAD monotherapy

(in most countries metformin)

OAD combination

therapy 1

OAD combination

therapy 2 Insulin therapy

(e.g. metformin+

OAD)

(e.g. metformin+

2 OADs)

€0.11 €0.28

€2.27

€3.85

€0.29€0.56

€2.25

€3.47

€0.55 €0.72

€4.10

€4.94

Diet + exercise metformin metformin + SU met + SU + TZD* Insulin**

SpainGermanyUSA

Treatment cost per day in Euro (€):

Schematic treatment pathway

Source: SKP research. * Competact + generic SUs (Germany and USA) , Actos + gener. metformin + generic SUs (Spain) ** Including average price for two blood glucose test strips and 40 IU of Lantus

Emerging benefits in diabetes

Comparison of annual drug costs in UK for licensed diabetes drugs

Drug Class Dose regimen Cost per day (€)

Liraglutide GLP-1 0.6mg to 1.8mg once daily by subcutaneous injection

1.64 to 4.93

Exenatide prolongedrelease

GLP-1 2mg once weekly by subcutaneous injection 3.29

Exenatide GLP-1 5 micrograms to 10 micrograms twice daily by subcutaneous injection

2.86

Linagliptin DPP-4 5mg orally once daily 1.49

Dapagliflozin* SGLT-2 10mg orally once daily ?

Sitagliptin DPP-4 100mg orally once daily 1.49

Vildagliptin DPP-4 50mg orally twice daily 1.42

Saxagliptin DPP-4 5mg orally once daily 1.41

Pioglitazone TZD 15mg to 45mg orally once daily 0.74 to 1.10

*not yet licensed in UK

UK reimbursement

All new drugs for type 2 diabetes have been listed for reimbursement by Department of Health

However, new drugs and technologies, including for diabetes, are assessed for clinical and cost-effectiveness by: NICE (covering England and Wales)Scottish Medicines Consortium (covering Scotland)

Guidance and recommendations issued are intended to be followed by local health payers

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NICE clinical guidance number 87 in Type 2 diabetes, May 2009 Treatment line

Recommended treatment Alternative treatment option if primary drug not tolerated

1st line • Metformin • Sulphonylurea (SU)

2nd line • Sulphonylurea (SU) • TZD (add to met or SU) – if risk of hypoglycaemia, preference for Pioglitazone• DPP-4 (add to met or SU) - if risk of hypoglycaemia

3rd line • NPH insulin or other insulin• Pioglitazone add to met+SU • DPP-4 (sitagliptin) add to met+SU

• Exanetide (add to met+SU) if high BMI >35, weight gain an issue with insulin, and continue if 1% reduction in HbA1c over 6 months and 3% weight loss

4th line • NPH insulin or other insulin7

Single appraisals of newer type 2 diabetes drugs (NICE and SMC) Assessed by NICE and SMCLiraglutide (2010):

Recommended by NICE in patients with high BMI, or where weight loss would be beneficial

Where weight loss is sustained as well as HbA1c reductionOnly recommended in dual/triple therapy in restricted

circumstances: when met/SU and TZD/DPP-4 not tolerated, and only the lower dose of 1.2mg daily.

SMC restricted liraglutide to use as a third line agent as economic case had not been made vs SU as dual therapy.

Exenatide prolonged release (2012):Similar recommendations to liraglutide 1.2mg.

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Single appraisals of newer type 2 diabetes drugs (NICE and SMC) Assessed only by SMC:

Exenatide in combination with insulin (2012): Recommended: Assessment based on a comparison with insulin

glargine alone

Linagliptin (2012): Recommended in combination with metformin in patients for whom an SU is inappropriate. Comparator was sitagliptin, showing similar efficacy,

lower costs.

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Single appraisals of newer type 2 diabetes drugs (NICE and SMC)

Assessed only by SMC:Sitagliptin monotherapy (2010): Recommended when metformin and SU contraindicated or not tolerated:

Comparator was TZD

Saxagliptin (2010)– Recommended as add-on to metformin when SU inappropriate:

Comparator was sitagliptin, showing similar efficacy, lower costs.

Recent non-recommendation in combination with insulin (2012)

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France

As a chronic potentially life threatening condition Type 2 diabetes drugs (typically) receive 100% reimbursement.

To determine price for reimbursement, new drugs are given an ASMR rating (therapeutic benefit) vs current therapies.

Transparency Committee of the Haute Autorité de Santé determine ASMR rating:Rating is I-VTo attain a higher price classification require ASMR I-III

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Transparency Committee recommendationsLiraglutide (2009)

Compared with exenatide, it was considered there was a small efficacy benefit and an advantage of once daily administration

Improvement in actual benefit - rating of IV: ‘minor improvement in dual or triple therapy with met/SU.

Insufficient for price premium over exenatide

Saxagliptin (2009):Compared to sitaglitin, the TC considered no improvement

in actual benefit in dual therapy with met or SU, hence received a V rating.

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Germany 2011 Act for the Restructuring of the Pharmaceutical

Market in Statutory Health Insurance (AMNOG) process of assessing therapeutic benefit of new drugsTo support price negotiations or reference pricing

Reimbursement pricing decisions made by G-BA, with IQWiG performing appraisals of therapeutic benefit according to rating scale:1=major benefit, 2= significant added benefit, 3= slight

benefit, 4=unquantifiable benefit, 5=no added benefit, 6=less benefit than comparator

An assessment of linagliptin performed by IQWiG in 2011 and published in 2012

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Comparisons assessed by IQWiG

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Appropriate comparator therapy of the G-BA

Appropriate comparator therapy of the pharmaceutical company

MonotherapyLinagliptin

a sulfonylurea Sitagliptin

Dual combination therapy Linagliptin + metformin

a sulfonylurea+ metformin

Sitaglitin + metformin

Triple combination therapy Linagliptin + a sulfonylurea + metformin

Human insulin + metformin

Sitagliptin + a sulfonylurea + metformin

IQWiG conclusionConsidered their comparators to be the correct ones

“Overall, there is no proof of added benefit from linagliptin. Thus, there are also no patient groups for which therapeutically relevant added benefit can be deduced”.Rating of 5

Linagliptin added to reference pricing not price negotiation (needs a rating of 4 or above for this)

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ConclusionsType 2 diabetes drugs tend to be reimbursed, following an

assessment of therapeutic benefit, and (in some countries) cost-effectiveness. Newer drugs reimbursement coverage tends to be restricted

Submissions to reimbursement agencies have to present patient relevant benefits:e.g. Reduction in complications, reduction in weight in patients at higher

risk

Increasing focus on price in countries previously considered free pricing: Germany AMNOG law UK – Value Based Pricing on the way!

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