article / 23 May 2022

TLV presents methods for health economic evaluations for new therapies

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The Swedish Dental and Pharmaceutical Benefits Agency (TLV) has been commissioned by the Swedish government to develop methods for evaluating the health economics of precision medicines and payment models for advanced therapy medicinal products (ATMP). TLV has now presented its second report on the subject. The report highlights outcome-based payment models, effects for relatives and how volume can affect the price.

In May 2022, TVL presented its report “Calculation and payment – Continued investigation of evaluation methods and payment models for new medicinal products such as ATMP and precision medicine – 2022” (Sw. “Beräkning och betalning – Fortsatt utredning om utvärderingsmetoder och betalningsmodeller för nya läkemedel som ATMP och precisionsmedicin – 2022”). In the report, TLV follows up and develops proposals that the authority had previously put forward in this area. TLV notes that evaluation of health economics of precision medicine to some extent brings new challenges, but also that it is basically no different to evaluation of other types of treatments where knowledge of the medical effects of products is limited. Several of the analyses and conclusions can therefore be applied to many types of medicinal product. Conversely, for ATMP, which is a one-time treatment, the issues emerge most sharply when the requested price is based on a long-term effect. If the effect is uncertain, the payer’s risk will be high.

TLV addresses a number of issues concerning how uncertainties in evaluating health economics can be quantified, reported and managed. Furthermore, as an issue of principle, TLV discusses whether it is reasonable to decide how much uncertainty is acceptable, depending on how great the long-term consequence for the patient’s health is when postponing treatment until evidence is available.

TLV also presents a method for how ICER (the incremental cost effectiveness ratio) can be calculated for ATMP with a potentially long-lasting effect, a probability-weighted ICER. TLV assesses that outcome-based payment models can reduce the risk of the payment for a medicinal product being too high relative to the benefits in everyday clinical practice. Reducing the payer’s risk is therefore considered to be part of the solution in making ATMP available to patients.

Furthermore, TLV considers that the authority in connection with the evaluations of health economics should produce proposals for payment models by, for example, identifying and proposing important factors that should be taken into account in such a model. TLV should also be able to propose how the current payment models can be adjusted to become more appropriate in terms of achieving a sufficient reduction in risk. However, this requires that both parties wish to negotiate a payment model.

Another interesting issue raised is whether an accepted cost should be affected by the scope of the use of the medicinal product. TLV believes that an investigation of this issue should not be limited to medicinal products with an expected small volume of sales, but also about whether it is reasonable to set stricter requirements for cost-effectiveness for high-selling medicinal products.

To date, TLV has not considered how a new treatment affects a relative’s quality of life. The agency has now analyzed this important issue and concluded that in certain situations considering such an effect may be justified. However, there are methodological challenges regarding how the effect should be calculated and TLV intends to review this.

Today’s systems for the pricing and reimbursement of medicines need to be reviewed and adapted based on scientific and medical progress. One of the methods presented in the report could perhaps be a step in the right direction. Setterwalls will follow this closely.

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