Pharmaceuticals Pricing Board (PPB), operating under the Ministry of Social Affairs and Health, evaluates reimbursement applications and makes decisions on pricing and reimbursement of medicinal products that have gained marketing authorization in Finland. Medaffcon interviewed Lauri Pelkonen, Director of PPB, regarding the current and evolving environment affecting decision-making at PPB.
Current pricing and reimbursement decision-making environment
“The current decision-making environment in Finland has evolved significantly during the last 15-20 years. The substantial growth of the total medicinal expenditure has required more control, leading gradually into a more structured and multifaceted pricing and reimbursement system. Consequently, the more definitive legislation has diminished the liberty of using judgement at PPB. Overall, the system has become more rigid.
The current situation, wherein marketing authorization procedures have been harmonized across Europe and new medicinal products are being released to the market with less evidence, generates more pressure to the national-level financial decisions. In short, compared to the past, we have an increasing number of situations where high-cost drugs are being evaluated with less evidence. “
New medicinal products require novel tools to enter healthcare
“We need to have mechanisms that bridge together the European marketing authorization and national reimbursement system and that will allow us to adapt to the nature of new drugs entering the market. Nowadays, high-cost drugs, such as typically new medicines for treating patients with a rare disease or cancer, enter the market with restricted indications, benefitting only small, targeted patient groups. This is the trend for many of the new drugs and we need to have the tools to manage their entry into the healthcare “.
Conditional reimbursement, benefits and challenges
Conditional reimbursement system was introduced in Finland 1.1.2017. During the ongoing fixed three-year pilot period, reimbursement and wholesale price of the medicinal product may be accepted according to the agreed conditions. Conditional reimbursement agreements, negotiated between PPB and the marketing authorization holder in question, are confidential in nature. They define the division of responsibilities between the payer and the marketing authorization holder regarding the uncertainties associated with gained health benefit, cost and cost-effectiveness, as well as monitoring the implementation of the agreement and the effects of termination of conditional reimbursement.
“To date, since the beginning of 2017, twenty-six conditional reimbursement agreements regarding twenty-three medicinal products have been made. Conditional reimbursement has therefore provided a mechanism of entry for several medicines that would not otherwise be available in the reimbursement system. It is obvious that increasing access to new medicines is definitively highly valuable for patients and healthcare providers.
The current model, adopted by several other European countries before Finland, still has some elements that we may need to reconsider. The current pilot period provides us valuable information allowing us to further consider how to develop and adjust it accordingly. At the same time, we can monitor fulfillment of the agreement terms, including marketing authorizations holders’ obligations to refund the reimbursement fees as agreed. Additionally, it is central to find a solution how to continue after the agreements terminate.
Overall, conditional reimbursement or a similar mechanism, is an important element in the reimbursement system providing us decision-makers also some freedom for broader consideration.
Outcome-based reimbursement refers to a procedure where reimbursement decision of a medicinal product depends on the assessed therapeutic value of the product. Assessment of the therapeutic value is done according to a set criterion and evaluated typically on a case-by-case basis.
“Outcome-based reimbursement holds a lot of potential and we already have the legislation in place that would allow the use of such mechanism. Outcome-based mechanisms are, however, highly complex and have several challenges associated with them. Currently, outcome-based reimbursement is much more applicable to hospital medicines due to the reason that hospitals already have the means of collecting data for evaluating the effectiveness. This is not the case for medicines in ambulatory care where access to the relevant data is still challenging. Improvements in accessing data is an important step that would allow us to go forward to more evidence-based direction. We should also ensure that the evaluation systems used in ambulatory and hospital care get better aligned.
In addition to advancing data access, it’s important to have an open dialogue with the pharmaceutical industry and build trust that supports the environment for implementing new reimbursement mechanisms. We need to agree on the rules and metrics how outcomes and effectiveness are being evaluated. We should also be able to remove medicines from the reimbursement system if they don’t fill in the required terms. It is not realistic to think that that all medicines would meet the set requirements. “
“Medicines have become more and more expensive and the overall medicinal expenditure has steadily increased over the years. It is obvious that we need to strengthen the decision-making capabilities in order to be able to provide patients the medication they most optimally benefit from.
While the current system provides means to facilitate the access of new medicines, there are also issues that remain to be solved, such as data access. Also, in terms of facilitating access to new targeted medicines, we need to be able to bear a level of uncertainty before data starts to accumulate and provide evidence either supporting or not supporting the use of them.
To improve the current system, co-operation between the different stakeholders is a key. We need to have common grounds and principles for evaluating effectiveness and have the possibility to share information to align the procedures in hospital and ambulatory care.
While legislators have a fundamental role in defining how to go forward, PPB has an active role in providing expertise and advice regarding solving the upcoming challenges and fitting the details into the big picture. It is vital that we understand the pricing and reimbursement system as a whole, and the projections that individual changes may induce in it. PPB has a holistic view on this landscape.”