Category Archives: pricing

Risk Sharing Agreements: Friends or Foes?

In risk sharing agreements, particularly health outcomes-based agreements, the price and reimbursement of a new drug is associated with the achievement of certain health outcomes in real-world practice. Health outcomes can be measured in terms of clinical results (through intermediate or final indicators) or of cost-effectiveness (through estimation of the incremental cost-effectiveness ratio).

According to the nature of reimbursement, health outcomes-based agreements can be classified into: conditional coverage and performance-linked reimbursement (or pay for performance). Conditional coverage agreements may provide patients access to new drugs while data to provide definitive evidence for the clinical or cost effectiveness impact are collected. On the other hand, performance-linked reimbursement (pay for performance) agreements are usually negotiated when the manufacturer is very confident in its product and the value it creates so it is willing to accept a lower reimbursement if the drug fails to achieve the expected health outcomes in real-life.

Health outcomes based agreements are not recommended for drugs whose health outcomes can only be evaluated after a long period of time and for drugs for which no specific and reliable outcome measurements can be defined. Their introduction can be complicated due to the variety of arrangements possible, they may require the transfer of patient data (with implications for confidentiality). Additionally, outcomes- based agreements may have high implementation, administrative, and monitoring costs and negotiations involved can be very time-consuming.

In the Spanish National Health System (NHS, SNS in Spanish), the implementation of these agreements may result in additional issues, in particular related to the decentralization in the decision-making process at the regional and hospital level (taking into consideration the 17 Autonomous Regions in Spain). This could raise questions regarding who (central government, regional health services or hospitals) should negotiate, manage and fund these agreements.

Another issue that must be taken into consideration is the fact that, in general, knowledge in these type of arrangements is extremely limited and both hospital and regional health services lack the appropriate personnel. Moreover, challenges linked to the absence of legal regulation of this form of agreements at European and national level must be addressed.

According to Dr Miguel Ángel Calleja, Head of Pharmacy at Virgen de las Nieves Hospital and President of the Spanish Society of Hospital Pharmacy (SEFH), “One of the problems related to the implementation of risk-sharing agreements in Spain is the lack of awareness among professionals and the inadequate monitoring of treatments”.

Nevertheless, the severe financial downturn Spain is facing is sparking interest in health outcomes based agreements, particularly at the regional and hospital level although with varying degrees of implementation across the different Autonomous Regions, with Catalonia leading the way in number of agreements and drugs involved.

For example, at the national level, within the Strategic Plan of the Spanish Government to address hepatitis C, the Ministry of Health has signed a combination of risk-sharing agreements with different pharmaceuticals companies to provide access to the new drugs for the treatment of hepatitis C. The Ministry has signed with MSD for the purchase of Victriles® (boceprevir) an agreement based on the concept of “cured patient”, so the SNS will pay only for these patients, while MSD will finance the cost of patients who do not reach the agreed viral load.

At the hospital level the first Performance Based Agreement entered in Spain was another outcomes-guarantees done between the Hospital Virgen de las Nieves in Granada and GlaxoSmithKline in 2012 for the purchase of Volibris® (ambrisentan) for the treatment of idiopathic pulmonary hypertension (PAH). In this case a technical committee (composed of a doctor, a GlaxoSmithKline representative, the hospital manager, a representative from the hospital pharmacy department, and a representative from the Andalusian School of Public Health) was responsible for monitoring the functioning of the agreement.

A linear model of payment was agreed so that the amount the Hospital pays depends on the performance of the drug with respect to previously established outcomes. Even though the treatment does not work as expected, under this arrangement the manufacturer receives a part of the payment. The annual cost of implementing this agreement was approximately 1% of the annual cost of the drug, being data collection the most costly aspect of the implementation.

Furthermore, at the regional level, the implementation of performance-based risk-sharing agreements is included in the 2011-2015 Health Plan for Catalonia. One of the goals of this Plan is to enter into ten risk-sharing agreements with pharmaceuticals companies by 2015. CatSalut, the Catalonia Health Service, intends to continue working on this type of agreements and to move toward an innovation and performance-based model of funding.

However, it is yet to be seen if the rest of Autonomous Regions will follow Catalonia’s example, potentially allowing further patients living in other regions gaining access to important treatments in the future (as a result of the implementation of risk sharing agreements).

When asked about the implementation of risk sharing agreements in Spain, during a breakfast organized by ilS, experts agreed that although the implementation of these agreements can be difficult, they are highly necessary nowadays. For Dr. Antoni Gilabert, Managing Director of Pharmacy and Medicines at Servei Català de la Salut (CatSalut), these agreements must be adopted to minimize uncertainty and to establish a win-win situation for both pharma companies and payers. Additionally, Dr. Gilabert believes that for successful implementation of risk sharing agreements, stakeholders must have a well-defined set of outcome indicators and a well-established monitoring methodology.

For Ms. Mercedes Prior, Head of Global Market Access at Almirall, risk sharing agreements allow and accelerate access to new drugs that otherwise would not make it to the market. Nevertheless, Ms. Prior acknowledges the hurdles related to the implementation of these agreements, given that many of the different departments within a pharmaceutical company (like; market access, medical affairs, legal, finance …) must be aligned.

Overall, risk sharing agreements provide a stable framework to finance innovation. Due to the fact that they are dependent on health outcomes, they encourage the effectiveness of products and enhance their post marketing research. However, the implementation of risk sharing agreements is complex, time-consuming, and an expensive process. Particularly the decentralized structure of the Spanish health system further elevates this complexity, increasing the stakeholders involved in the pricing and reimbursement process of a new drug.

ilS PublicationsSM latest report “Market Access and Innovative Agreements in Spain” speaks about the different types of innovative agreements that pharma companies can implement (including risk sharing agreements). Additionally, it describes in an easy-to-read manner the Spanish healthcare system, clarifies the process of introducing a new drug in Spain, and provides information about the roles different stakeholders play at a national, regional and local levels, as well as the different levels of influence they exert. All of that allow decision makers from biopharmaceutical companies to set-up the right new drug launch strategy that will guarantee an optimal access into the Spanish market.

Click here to download your copy of ilS PublicationsSM latest report “Market Access and Innovative Agreements in Spain”

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