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Alexander Dietrich
Manager, Advisory Health Industries, PwC Switzerland
Sabrina Alessandra Lehmann
Consultant, Advisory Health Industries, PwC Switzerland
Markus Suter
Consultant, Advisory Health Industries, PwC Switzerland
According to the Alliance for Regenerative Medicine, as of 2022, seven of the 23 advanced therapy medicinal products (ATMPs) approved in the EU have subsequently been withdrawn from the market.1 By comparison, only two out of 31 therapies approved by the US Food and Drug Administration (FDA) suffered a similar fate.2 European regulators claim these retractions are primarily as a result of evidential uncertainty around safety concerns and/or insufficient efficacy. But pharma companies argue that their cell and gene therapies (CGTs) were launched in an ecosystem that was not ready for innovative treatments such as Strimvelis and Glybera. As a result, they are unable to achieve reimbursement at sustainable prices because traditional health technology assessments (HTAs) do not consider CGTs’ potential to deliver transformational, long-term health improvements that benefit patients, healthcare systems and society.3
In this blog, we will explore 1) how today’s evaluation methods are changing to improve the value assessment of CGTs and 2) what pharma companies should do to successfully navigate existing processes today.
Assessing treatment value today
European regulators base their reimbursement decisions on traditional HTAs. These are designed to compare the cost-effectiveness of different treatments and thus are critical for patient access in Europe, especially in countries such as the United Kingdom. While many CGTs are sold as one-off treatments with high upfront prices,4 the clinical effectiveness and long-term health improvements that would justify these are often only indicative at launch due to a lack of comparators and typically small patient populations.5 As a result, HTAs often limit CGTs’ price potential to ensure affordability and do not recommend their broad adoption.
HTAs aim to carefully assess the efficacy and efficiency of novel treatments by conducting both a clinical assessment to establish guidelines for healthcare practitioners and an economic assessment to determine a treatment’s cost-effectiveness and overall budget impact.6 To ensure that their CGTs are available to the right patients at the right time, pharma companies need to be aware of the different methodologies and frameworks applied across Europe, the current challenges for CGTs and how these frameworks will evolve.
Challenging the value assessment
Most HTAs determine a treatment’s cost-effectiveness by estimating the cost per quality-adjusted life year (QALY) with regards to thresholds set by individual countries. But measuring health outcomes in QALYs is problematic as, for example, patients with severe disabilities are deemed to have a low baseline level of quality of life. As a result, any treatment given to them will provide a smaller improvement to QALYs compared to a healthy patient. A similar problem exists with elderly patients who have a shorter life expectancy and therefore fewer QALYs to gain compared to younger patients.
To address such ethical concerns, many HTA agencies have introduced ‘threshold modifiers’ that account for disease severity and/or rarity. The National Institute for Health and Care Excellence (NICE), the UK’s HTA agency, has recently introduced new, quantitative severity modifiers that consider both absolute as well as proportional shortfalls in QALYs based on a 2019 study examining citizens’ preferences.7 As an example, oncology drugs will now be judged against a higher cost-effectiveness threshold compared to drugs in other indications.
In addition, global HTA-focused organisations have started to take a broader, more qualitative view of the societal costs and benefits of a given treatment. We are seeing the emergence of multiple holistic value frameworks such as the ISPOR Value Flower and the One Health concept endorsed by the World Health Organization (WHO). However, these frameworks are mostly being applied in academic exercises for now. HTA agencies have not yet implemented them due to challenges around insufficient data quality and a lack of capabilities and resources to process and evaluate the data.
Identifying a suitable value assessment for HTA agencies would benefit CGTs, which are often deemed too expensive under current approaches to measuring cost-effectiveness. As a result, many CGTs currently do not receive HTA appraisal, as today’s value frameworks focus strongly on economic considerations and fail to capture the transformative potential for patients and society that goes beyond QALYs.
Taking a broader view on value
Many of the treatments for Alzheimer’s disease and related dementias (ADRD) currently in development are CGT. Despite offering disease modifying, promising transformative health gains for affected patients, value frameworks using cost per QALY as an outcome measurement are ill-equipped to appropriately quantify the broader benefits to healthcare systems and society. These include additional social considerations such as impact on economic productivity or equity. For example, caregiving activities and disease-related, out-of-pocket expenses tend to fall disproportionally on women and people from lower socio-economic households, affecting distributional equity.
Thus, the value of drugs treating ADRD goes well beyond QALY gains of affected patients but impacts society on a larger scale.
Unlocking value potential
One prominent example of a pharma company that struggled with HTAs in Europe is Bluebird Bio, a US biotech company specialising in gene therapies for severe genetic disorders and oncology. Due to disagreements on the value provided by its two gene therapies – Zynteglo and Skysona – both treatments were retracted in 2021.8
The company failed to negotiate an acceptable price for Zynteglo with German payers as the HTA used the significantly cheaper life-long blood transfusions as comparators.9 The company also faced challenges in the Netherlands, where costs per QALY for its treatment were 35% above the national benchmark, leading to significant price pressure from ZIN, the Dutch HTA agency.10 Hence, ZIN asked to include a real-world evidence-based pay for Zynteglo.11 Having failed to accurately demonstrate their treatment value and thus negotiate acceptable price levels, Bluebird Bio decided to wind down its European operations entirely and focus on the US.
There are also lessons to be learned from successful launches such as Kymriah by Novartis, which was the first FDA-approved cell therapy back in 2017.12 As a pioneer, Novartis had to adopt innovative pricing schemes to achieve cost-effectiveness and limit the financial burden on the public health system caused by the original list price of 320,000 EUR. Novartis achieved this price by giving confidential rebates to reduce the price per QALY below the HTA thresholds. Alternatively, recent CGT launches leveraged outcomes-based reimbursement processes to achieve HTA appraisal.13 Countries like Italy agreed on staged payments upon outcomes. However, outcomes-based pricing requires a state-of-the-art real-world evidence (RWE) collection system, to ensure HTA agencies can continuously review data.
Due to country-specific policies, pharma companies need to understand that HTA roles and their regulatory environment are both highly fragmented and constantly evolving. It is essential to find a way to adapt to this changing landscape and identify countries with beneficial conditions while also keeping pace with future developments. As a result, pharma companies should leverage innovative payment models and performance-based contracts linked to robust RWE post approval generation and ensure they have the right internal processes and capabilities to execute them.
Looking ahead
Harmonisation
The European Commission launched an initiative to harmonise clinical HTA processes across markets. The goal is to provide a joint clinical assessment (JCA) of advanced therapy medicinal products, including CGTs and oncology drugs in 2025 and later including orphan drugs (2028) and other medicines (2030). As this process is still in development by EUnetHTA, there is an opportunity to shape future guidelines via public debate. It remains to be seen how a harmonised HTA process could improve patient access in Eastern Europe given the region’s limited healthcare budgets. And with countries still able to request complimentary clinical analysis on top of JCAs to fit their national processes, being able to navigate local requirements remains crucial.14 Identifying and leveraging synergies amongst HTA bodies will be a key, long-term success factor for pharma companies.
Lifecycle approach
HTA agencies are looking to expand their activities to cover more aspects of a technology’s lifecycle, from the initial R&D investment to the loss of exclusivity. Many HTA agencies are already conducting pre- as well as post-assessment activities such as early scientific advice, managed entry agreements and systematic reassessments.15 But while individual activities are already well established, we are now seeing their sequential implementation. To overcome challenges such as budgetary constraints and the lack of capabilities related to data generation and collection, guidance from pharma companies will be essential to satisfy all stakeholders.
Real-world evidence (RWE)
Digitalisation offers increasing opportunities to create accurate and cost-efficient RWE. Nonetheless, the use of RWE in most pharma companies is still in its infancy. The technological challenges (e.g. trial set-up, statistical data evaluation and confounding variables management) are significant, and the lack of specialists makes it hard to keep up with technological developments in this area. However, RWE can accelerate clinical development and approval timelines, as experienced by Yescarta which was approved after Phase II. As a result, successful RWE strategies are tailored to each market and asset to allow for outcomes-based pricing that satisfies both patient as well as economic needs.
Value definition
Demonstrating the broader value of CGT compared to traditional treatments is a big challenge for pharma companies today. New academic value frameworks by ISPOR and the WHO are becoming increasingly popular, but their implementation has proven challenging. This provides an opportunity for pharma companies to propose ways to standardise and quantify value in HTAs. Additionally, pharma companies should understand the data requirements of respective HTA agencies and carefully plan for data collection and monitoring, from early clinical trials to post-launch, adopting a true lifecycle perspective for their asset.
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