Market access challenges

Rebecca Aris interviews Ulf Staginnus

Amgen

Rebecca Aris interviews Ulf Staginnus, Franchise Head Oncology, Health Economics &amp, Reimbursement at Amgen on his thoughts on market access challenges in Europe.

The changing European pricing environment presents a huge challenge to pharma and to gain a perspective on the scope of the impact we spoke with health economics expert Ulf Staginnus.

Ulf is an expert on pricing effects at a European level and he speaks with us here on some of the biggest challenges associated with market access in Europe and the role of drugs in overall health economics.

Interview summary

All statements made in this interview are Ulf’s personal viewpoints on the subjects and not necessarily those of his employer.

RA: Ulf, thank you for your time today. You work as the Franchise Head of Oncology, HE &amp, Reimbursement at Amgen, could you please start by explaining what this entails?

US: I manage a team of Health economists and pipeline value leads working in Amgen’s international headquarters in Zug, Switzerland, responsible for the entire oncology portfolio. We are dealing with market products and prepare the value and evidence generation strategies for Amgen’s oncology portfolio: coordinating EU country input, identifying data gaps, access requirements, conducting studies, preparing models and potential innovative solutions across functions in close collaborations with our affiliates and the global teams in Thousand Oaks, California.

RA: You’ve written book chapters on strategy and tactics of pharmaceutical pricing and health economics, and you run a popular blog related to topics around health economics. What do you see to be the biggest challenges associated with balancing profitability and patients getting what they need?

US: Two things come to mind, the assessment of relative benefit of novel medicines and the way we are doing pharmaceutical pricing.

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“It is my hope that governments at some point will recognize the potential for win-win solutions and will be able to move away from sole external reference pricing.”

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We as an industry need to earlier and more thoroughly assess pipeline value assets in order to design appropriate trials. If the evidence is not sufficient at time of launch due to technical or design issues, appropriate mechanisms need to be in place. Risk sharing and coverage with evidence development are often discussed but political hurdles as well as administration make these complex.

Novel technologies, such as social media or web-based registries should in the near future allow for better and faster data collections. We really need to beef up IT capabilities in data mining on the various levels in the healthcare system. Weeding through patients charts somewhere in the hospital basement should be a thing of the past very soon…

If we talk about pharmaceutical pricing, incentives for innovation need to be maintained but how can this be possible if in times of financial crisis many countries want to have the drug prices of Greece in their own market?

This is also true in the area of rare diseases, which is in need of highly innovative and specialized drugs.

Certain policy matters don’t help, if we consider the pricing setting in Germany where, after the IQWIG assessment, the negotiated and rebated prices will be made public, this will trigger an enormous downward spiral on prices throughout Europe and erode a lot of value.

Clearly affordability is an issue these days but it should be coupled with smarter mechanisms than the inefficient reference pricing policies. What is needed is political will to explore innovative pricing solutions beyond the price-per-unit (pill) concept that other industries successfully employ. It is my hope that governments at some point will recognize the potential for win-win solutions and will be able to move away from external reference pricing.

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“Finally, the often named ‘early payer engagement’ needs to become a practical reality…”

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Finally, the often named ‘early payer engagement’ needs to become a practical reality, whereby the dialogue between the stakeholders will have to be improved in order to arrive at clear and binding guidance and agreements to act upon.

RA: Looking specifically at drugs, what is their role in health economics in overall healthcare spend?

US: If we look at cancer drug they probably make only a contribution of 4 to 10% on the total cost of care. Drugs are the focus of government budgetary savings as they are looking for easily achieved savings by simple price reductions or other access-related policies.

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“If we look at cancer drug they probably make only a contribution of 4 to 10% on the total cost of care.”

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RA: In what ways can the industry adapt to make market access more of a focus?

US: We are seeing a lot of companies restructuring and reorganizing to change how they deal with the increasingly difficult health policy environment. There is no one solution but perhaps a few principals are common.

I am currently editing a book, jointly with a former colleague and friend, called the “future of health economics” that will be published in early 2013, which will address some of these matters in more detail, so stay tuned.

RA: How does the R&amp,D process need to adapt to align itself with payer requirements?

US: This is the crux of the matter, market access considerations have to start much earlier than today as I outlined previously. I personally believe that there will have to be an approach of more risk taking, such as head to head trials and other forms of providing distinct evidence along the product life cycle. Another crucial point is business development and novel partnerships.

RA: What novel pricing mechanism have you noted that you deem to be a success?

US: There is little movement on this front as most countries insist in external price referencing as their main source of cost containment and price setting. This is unfortunate as, based on economic theory, differential pricing would achieve the most benefit for all stakeholders involved.

Personally, I am a strong believer that novel forms of pricing are required. We could learn from other industries and work on some models such as flat fees for treatments, prices based on outcomes or certain fidelity models etc. There are a lot of opportunities to develop better concepts than the price-per-pill concept with the advantage of balancing RoI for the manufacturer, budget predictability and affordability from a payer’s perspective. This would require major political willingness on the governments and payers side, unfortunately so far we see little of it.

RA: And finally where do you see health economics sitting within pharma in 5–10 years time?

US: I hope that more people realize that the static and mechanistic concept of cost per QALY assessments does not reflect the complexity of healthcare decision making. It is a concept that should not be used in sole isolation to determine P&amp,R decision making as performed in many jurisdictions today but that rather broader financial analysis or concepts of multi criteria decision analysis are applied.

Within companies I am confident that HE will maintain a very central role in strategizing and creating the required evidence for submissions and that the influence of HE on R&amp,D and business development decision making and trial designs will further increase in the future. In my opinion some health economists need to think more holistically and apply broader concepts than cost utility analysis. I also believe that HE groups will have to play a greater role in designing and applying novel data collection approaches for real life data mining and analysis.

RA: Thank you for your time.

US: Many thanks to you.

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European-CME-Forum-15-16-November-2012

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About the interviewee:

Ulf Staginnus is Franchise Head Oncology, Health Economics and Reimbursement, Amgen Europe, Zug, Switzerland. Prior to that he was the Head of Pricing &amp, Health Economics Europe with Novartis Oncology responsible for pricing and market access strategies in Region Europe. He is a health economist with 16 years of international experience in pharmacoeconomics, pricing and reimbursement as well as competitive intelligence and health technology valuations within the biotechnology and pharmaceutical industry. In 1996, Ulf graduated as Diplom Volkswirt (MA Economics) – with a major focus on health economics – from the University of Bayreuth, Germany. During the course of his career he also founded and run his own consultancy serving biotech and pharma clients in supporting their product pricing, valuations and market access initiatives. Ulf is a regular speaker on pricing and health economics related matters. He also contributed to various articles and authored book chapters on strategy and tactics of pharmaceutical pricing and health economics- Ulf runs a popular blog related to topics around health economics www.healtheconomicsblog.com.

Where do you see health economics sitting within pharma in 10 years time?