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Volume 40, Issue 2
New OECD study doesn’t shed much light on the effectiveness of managed entry agreements for drug access.
While the agencies that pay for medicines continue to struggle with the inadequacies of external reference pricing (ERP) systems that many of them rely on, parallel attempts to pry open the black box of managed entry agreements (MEAs) seem even more unproductive. A panel of experts working with the richest countries in the world has just been obliged to admit failure in its search for an easy key to unlock the secrets held by deals on payment for results or population-level coverage.
“It is difficult to assess to what extent performance-based MEAs have so far been successful,” conclude the authors of a study for the Organization for Economic Cooperation and Development (OECD), because “little information is currently shared,” particularly on the products for which MEAs are in place, on the design of MEAs, or on their results, and there is a consequent “lack of evidence.”1
Advocates of tougher pricing controls on medicines will find little comfort in the findings of the OECD study, because it confirms what European discussions of ERP during 2019 already made clear: that as long as confidentiality remains the norm in pricing negotiations between drug firms and national payers, information and evidence is always going to be in short supply. The ambitions of European national payers to leverage a shift in focus from list prices to net prices are evident in the burgeoning regional groupings now emerging along the lines of the Beneluxa model, and were at the heart of last year’s ERP discussions in their Euripid grouping too (which this column covered in May 20192). So far, the ambitions remain a long way from fulfilment.
That is not to say that the concept of MEAs is called seriously into question in the study. These agreements between firms and healthcare payers can, in principle, allow for coverage of new medicines while managing uncertainty around their financial impact or performance, it concedes. And at least two-thirds of OECD countries and EU member states have made use of financial agreements designed to reduce prices and/or budgetary impact of medicines in OECD countries and EU member states without linking them to product performance.
Many of them have also used performance-based agreements that link to payments or rebates, it says. The most common designs for agreements are patient-level payment-by-result (PbR), paying firms only for treatments to which patients respond, and population-level coverage with evidence development (CED), which aim to reduce uncertainty around comparative effectiveness or cost effectiveness.
The problem is that it is hard to say whether these agreements do what they are intended to do. Few countries have formally evaluated their experience. And the confidentiality that surrounds these agreements is a permanent barrier to independent evaluation.
There is little evidence in the public domain, admit the authors of the study-and such information as is available, including from expert interviews they have conducted-indicates that CED agreements have so far had a poor track record of reducing uncertainty around the performance of medicines, and PbR agreements “do not always generate evidence on product performance because data used for triggering payments are not always aggregated and analyzed.”
As a result, some countries have recently reformed CED schemes, and some are discontinuing CED agreements altogether in favor of alternatives, notably with restricted or conditional coverage without an MEA, and with coverage initially restricted to certain indications or patient groups and only broadened if and when additional evidence becomes available.
Where the advocates of tougher pricing controls may find more comfort-and pharmaceutical executives may entertain more reservations-is in the study’s suggestions that the situation is not without some hope of remedy. One of the avenues that the report recommends for exploration is “ensuring a minimum level of transparency of content, limiting confidentiality to those parts of MEAs that may be commercially sensitive (e.g., prices).” It also urges sharing information on results of MEAs, and how performance of products is measured within them.
According to the study, this would benefit payers. It says it would reduce duplication of effort between countries; it would allow payers to learn from experience elsewhere to inform their negotiations with firms; and it could reduce uncertainty over results from small patient samples in the case of rare diseases. Greater transparency over the performance of products would also “be useful for other stakeholders with legitimate interests and the general public,” it says.
The study also raises a hitherto less remarked issue. It suggests that reticence over the outcome of MEAs could have a dimension beyond the strictly technical. “The potential non-disclosure of results of clinical studies conducted under performance-based MEAs raises ethical concerns, as available information on the effectiveness of medicines could be withheld from the public.”
The ways forward that the study recommends amount to a radical change in current practice. If MEAs are to be more useful, “payers would need to change their policies in negotiations with pharmaceutical firms to ensure that information on future MEAs is not confidential,” it says-somewhat glibly, since abandoning confidentiality is not entirely within the exclusive gift of payers; companies would have to agree to it too.
“There is significant interest in sharing of information on the existence of MEAs, on how product performance is measured, and in decisions made as a result of MEAs,” it continues. “Payers could agree on which information to share, in which form, and through which mechanism.
Various mechanisms of information exchange are possible, including publishing information on existing websites, establishing new central repositories, and using existing initiatives for sharing of information on medicines and health technologies.”
In what sounds like a belated-and even then possibly inadequate-acknowledgement that it does indeed take two to tango, the study does recognize that “further assessments might be necessary to determine which information is commercially sensitive and ought therefore to be protected.”
But its optimistic attitude still seems to rather miss the point: “Changes to legislation might not be necessary in most countries to achieve greater transparency.” Legislation is unlikely to deliver the transparency aspired to. As this column has observed in the past, industry-and many national authorities who benefit from confidential agreements-are resistant to the extensive transparency that more radical commentators are mulling. And drug firms are on the record as saying that if they are forced to disclose net prices, they will stop making agreements that involve discounts, and provide their products only at list prices.
Similarly, pricing authorities who currently obtain discounts in return for confidentiality agreements say they will not be able to afford the acquisition of expensive medical treatments if they are available only at list prices. It is hard to see the legislation that-in Europe at any rate-could compel either side to enter into agreements that they were strongly opposed to.
So despite the meticulous engagement of the OECD’s researchers, the black box of MEAs remains almost as hermetic and opaque as ever. Something more than an academic review may be needed to advance meaningful discussion on revealing its innermost secrets.
Reflector is Pharmaceutical Executive’s correspondent in Brussels