Sustainable financing of innovative therapies

The recent wave of medical innovation carries high potential to improve quality of life and survival of patients in areas of unmet medical need. These innovations often come at a high cost and have a correspondingly high budget impact, leading to a growing concern among decision-makers over financial sustainability.

The LSE-ICL Forum on Medical Innovation on 14 October 2015 brought together experts from a variety of institutions in order to discuss recent developments in value assessment and sustainable financing of medical innovations, and future expectations. The forum consisted of two panels, the first of which explored value frameworks for innovative medical technologies while the second focused on options for sustainable financing. Each panel consisted of a presentation, was based on a white paper and received short feedback from each of the panelists, followed by a Q&A session with the delegates in attendance. This entry discusses and reflects on the second panel: Options for the Sustainable Financing of Innovative Therapies.

The second panel, chaired by Professor George Gaskell from the London School of Economics and Political Science, was based on a position paper produced by Dr Panos Kanavos and colleagues. This paper proposed a framework for assessing options for sustainable financing, developed a taxonomy showcasing different types of options, and critically appraised the various options based on the evidence available in the literature and through primary evidence collected in stakeholder interviews.

Innovative therapies pose several challenges to the healthcare system and sustainable financing. In particular the paper considered the budget impact of new therapies, uncertainty at the time of coverage decisions, issues surrounding patient access, downstream socioeconomic impact, incentives for innovation and the ability of therapies to improve health outcomes. Options for sustainable therapy were divided into three main categories: healthcare programmes, pricing and funding models, and financing mechanisms linked to intellectual property. These options were assessed according to their ability to help policy makers address the various challenges presented by innovative therapies.

Overall, the paper presented a broad range of options for financing health services and raised several issues associated with sustainable financing:

Streamlined regulatory procedures have resulted in faster market access, but have the unintended consequence of raising uncertainty at the time of a coverage decision. Countries have a range of conditional reimbursement options through managed entry agreements, which help address uncertainty over price, but also clinical benefit of new therapies.
The presence of earmarked drug funds such as the UK cancer drugs fund signals that the underlying HTA system may be inadequate and raises concerns over both equity and efficiency.
There is a growing use of pay-for-performance schemes, in an attempt to achieve value-for-money based on real-world evidence.
Several innovative financing and funding mechanisms have been proposed in literature. While in theory these help address many of the challenges posed by new therapies, many have strong barriers to implementation, which limits their usefulness in practice.
Incentives for innovation are still poor in some areas, particularly for antibiotics, where the threat of resistance requires controlled use and for diseases endemic in poor regions where return on investment may not be large enough to cover the costs of R&D.

Ultimately, an assessment of the various options for sustainable financing reveals several problems with current methods of assessing value and making decisions over the coverage of a new treatment. Current HTA systems are in need of change from a simple gatekeeper model, to a more iterative process involving real-world evidence with greater scope for negotiations. Assessment is likely to be based on multiple criteria to reflect a range of social values, rather than rely solely on clinical or cost-effectiveness.

A panel of six esteemed experts in various areas of healthcare provided feedback on the paper. This consisted of Professor Finn Børlum Kristensen from the EUNetHTA, Professor Carlos Gouveia Pinto from the Lisbon School of Economics and Management, Professor Adrian Towse from the Office of Health Economics, Ms Dominique Polton from CNAMTS in France, Dr Patrick Jeurissen from the Ministry of Health and from Rabdoud University Medical Centre in Netherlands, and Dr Mary Baker from The European Brain Council.

Discussion on the paper focused largely on HTA and the key points raised included:

Silos in healthcare ought to be avoided. There is strong potential for collaboration and sharing of data and experiences eg across Europe to help better guide HTAs.
Early scientific advice will hopefully play a greater role in the process of innovation. There is a need for greater communication between HTA agencies, regulators, and companies about the type of information that is required for broader assessments.
While cost-effectiveness is discussed at length, not enough attention is given to disinvestment of drugs that are not cost effective. The question of adopting an innovation should incorporate a decision about whether or not to disinvest in the technology rendered cost ineffective.
There will be a growing role of post-marketing evaluation and real-world evidence in addressing uncertainty surrounding medical innovations. Some scepticism emerged over the success of risk-sharing agreements, owing largely to issues in data collection and monitoring. Development of improved monitoring and surveillance systems and greater collaboration across member states is desired. Nonetheless multiple panelists agree that these schemes represent one of the ways forward.
The distribution of healthcare expenditure in a population is highly skewed. Typically a small percentage of the population accounts for a large percentage of health expenditure, largely due to multi-morbidity. Solutions for sustainable financing require considerations of comorbidity.
Many of the options presented in the paper incorporate complex strategies and are likely to have implementation problems. Policy makers require robust, straightforward approaches, otherwise they are unlikely to be adopted.
The role of patients in the process of assessing new therapies should not be understated. It is important that discussions and solutions incorporate language accessible to a wide audience, such that patients, who ultimately receive healthcare interventions, can play a more active role in the process.

The main objective of this forum was to provide a platform to stimulate debate and discussion on the issues surrounding medical innovation and the assessment of value. The presentation and subsequent discussion highlighted several issues and solutions to what is clearly a very complex issue, notably the sustainable financing of innovative therapies. While it is difficult to describe in depth the full range of options available for sustainable financing, it is clear that decision makers have several options present for addressing the various challenges posed by medical innovations.

Achieving value-for-money is a key component of sustainable financing. The most appropriate means of accomplishing this remains unclear and the subject of debate. While no single solution is best or addresses all the challenges presented by medical innovation, a number of options emerged as likely solutions. This forum and the feedback from the panelists acted as a strong starting point for initiating and promoting discussion on the sustainable financing of medical innovation.

For further information, please contact Panos Kanavos (p.g.kanavos@lse.ac.uk or @kanavosPG)

Panel two video

Sustainable financing of innovative therapies