Innovative cancer treatments: how much are we willing to pay?

One man in three and one woman in four will develop cancer before their 75th birthday. In Belgium, cancer is the second major cause of disease burden after cardiovascular diseases and it is unlikely this will change in the foreseeable future. Increasingly better but more expensive cancer therapies are becoming available. Needless to say, in these times of austerity, the public budget for cancer treatment is under pressure. How can we ensure all patients continue to have access to these expensive but potentially life-saving medicines at a price society can afford, while at the same time encouraging pharmaceutical companies to innovate?

A new Vlerick Policy Paper in the health domain, also endorsed by the Belgian Society of Medical Oncology, the Belgian Haematological Society and the College of Oncology, offers several recommendations to achieve these seemingly conflicting goals.

Let’s talk

Professor Walter Van Dyck is one of the authors. “The solution lies in what we call a conditional dialogue between society and the innovative pharmaceutical industry which, unlike an adversarial dialogue, aims for a win-win outcome – positive ROI for pharma and prices society considers to be fair – provided certain conditions are met,” he says. “It’s a dialogue that runs throughout the entire lifecycle of a medicine. The only dialogue today is a one-off when a pharmaceutical company submits its product dossier, followed by a yes/no decision. We should move towards a continuous dialogue, from the R&D phase through to launch and even after.”

Gouverner c’est prévoir

Success of this conditional dialogue hinges on a performant horizon scanning system, as Walter explains. “Scientific research drives the supply of technologies and medicines. If policy makers and payers want to determine a realistic budget, they need to know what therapies are in the pipeline. Ideally, this horizon scanning is done on an international or European level.  Belgium doesn’t have a formal horizon scanning system in place yet, so it’s encouraging to know that it has now set up a collaboration with the Netherlands. So far, healthcare budgets were based on a one-year horizon and a linear extrapolation. But this doesn’t work in the field of oncology. Its pipeline has been empty for a while, but recently there’s been an upsurge of novel treatments: targeted therapies and immunotherapies, an area in which Belgian scientists are quite active, by the way. If you use a one-year horizon, your budget may be pretty accurate, but you risk missing out on these surges of innovation.”

In the summer of 2015, the Minister for Social Affairs and Public Health, Maggie De Block, and pharmaceutical sector umbrella organisations entered into a “Pact for the Future” in which they agreed on a series of measures in the pharmaceutical field for the period 2015-2018. Walter: “It’s an admirable initiative. It’s also a first step towards a true dialogue. But the Pact uses a decision horizon of three years, while we believe a five-year horizon would be more appropriate. We also feel horizon scanning should be formally embedded in the approval and reimbursement process to ensure a sustainable impact, beyond the current parliamentary term.”

Our study shows that immunotherapy accounts for one third of the pipeline, but half of the prospective budgetary impact. This while their systemic nature makes them more generally applicable across various cancer indications, which obviously has a detrimental budget impact. The five-year horizon budget needed for oncology will double from the 492 million euros baseline set for 2015 to over 1 billion euros in 2020. By 2020 targeted therapies and immunotherapies are expected to make up more than 70% of oncological treatments. The budget agreed in the Pact follows the needs resulting from the innovation pipeline, until 2018. After 2018 either the approval and pricing system needs to be reviewed or the budget needs to be increased substantially.

Meet unmet needs

A successful conditional dialogue, the authors argue, also requires early scientific advice to steer and stimulate R&D and innovation in areas of unmet needs, e.g. lung cancer for which the 5-year age-adjusted relative survival rate is only between 15% and 25%, depending on age category, while for breast cancer this is 90%. A horizon scanning system that matches the pipeline of promising therapies with the identified unmet needs should form the basis for priority-setting.

Value for money

“For the conditional dialogue to work, we also need a transparent approval and pricing system that actually rewards innovation in areas of unmet needs,” says Walter. “If you have identified unmet needs, your horizon scan will tell you who is active in that area and therefore who you should stimulate. This means we’ll have to change our approval and pricing system. Approval should be expedited for promising innovative medicines. A medicine’s pricing should reflect whether it meets an unmet need, in which case it can be higher, or whether it’s essentially just a me-too product.” He pauses and adds: “Ideally, our pricing system evolves to a competitive value-based one. Value-based pricing rewarding innovation also gives more negotiating power to the payer and to society by stating how much we as a society want to pay for an improved health benefit”.

Now how do you quantify improved health benefit? Walter: “In the UK they use an opportunity cost reasoning, comparing prices to a predefined willingness to pay threshold. But we believe this is too narrow an approach and would prefer a more holistic view. A good starting point is the recently developed scale of the European Society for Medical Oncology1, which defines different levels of clinical benefit to be expected from oncological curative and non-curative treatments. Also here, Belgian oncologists have been in the lead. The willingness to pay for moves between levels on the scale is a social choice that should be the result of well-informed public debate, involving patients and their carers.”

Real-world evidence

Finally, this conditional dialogue should be supported by performant post-launch systems to collect real-world evidence in order set up a learning healthcare system. Walter: “We want these medicines to come on the market a.s.a.p., faster than now. But when you’re dealing with medicines, there are some security issues with fast market access. So, you need a system to gather real-world evidence to monitor the performance of a drug after its launch and to intervene if necessary. Gathering evidence in the real world is far from obvious, though, because it’s an uncontrolled environment, with lots of confounding factors. But it’s a must. It also allows pharmaceutical companies to learn and adapt their products.” This practice of faster market entry, followed by real-world evidence gathering is emerging all over Europe. All parties involved seem to agree that more flexible market access and adaptive development is the way forward.

“So, if you still want to be able to intervene and adjust after a medicine has been launched, then gathering real-world evidence is essential. And logically, a medicine’s reimbursement should be made conditional on its performance,” says Walter. “Also, the payer is in favour of one uniform price per medicine, while we believe it’s much better to use indication-based pricing. The health benefits or the value delivered by one and the same medicine is most likely different for different indications. Indication-based pricing is also an incentive for pharma to continually innovate.” Of course, this can only be realized if the IT infrastructure is in place to monitor real world use.

Take it from here

This paper is one of the first deliverables of the Roche Chair within the Vlerick Healthcare Management Centre. “It’s by no means an end in itself, but it will be the basis for further research and for any future dialogue with policy makers and the pharmaceutical industry, with one aim in mind: ensuring sustainable access to life-saving cancer medicines,” concludes Walter.

1 The ESMO-MCBS: the European Society for Medical Oncology Magnitude of Clinical Benefit Scale


Beyond chemo therapy
Conventional chemotherapy attacks all dividing and fast-growing cells, including healthy ones. Medical innovation has led to the development of targeted therapies, using drugs that are able to specifically target the tumour cells or their microenvironment. The concept underlying this development is to identify biological markers or biomarkers, often molecules or  a set of molecules, involved in the oncogenic or cancer-causing process and then to target these markers by more or less specific drugs. Immunotherapy is the latest and one of the most promising cancer treatment becoming available. It makes use of a patient’s own anti-cancer immune response system, thus limiting the growth and spread of the cancer, which may translate into higher long-term survival rates. Cancer drugs tend to be more expensive than drugs for other therapeutic areas, due to the complexity of the science involved, which leads to longer development times and lower success rates. Unlike targeted therapies, immunotherapies are applicable to a wide range of patients. To make things even more complex, some immunotherapies are targeted in nature.

Source: Walter Van Dyck, Jacques de Grève, Rik Schots, Ahmad Awada and Tine Geldof (2016) “The Future of Access to Innovative Medicines in Cancer Therapy: Towards Conditional Dialogue Fostering Affordable Therapeutic Innovation", Vlerick Policy Paper No. 7: Brussels.

About the authors: Prof Dr Walter Van Dyck is Associate professor of Technology & Innovation Management at Vlerick Business School and Director of the Vlerick Healthcare Management Centre (HMC). Prof Dr Jacques de Grève is Head of Medical Oncology at UZ Brussels and president of the Belgian Society of Medical Oncology (BSMO). Prof Dr Rik Schots is Head of the Clinical Haematology Department at UZ Brussels. Dr Ahmad Awada is Head of the Medical Oncology Clinic at Jules Bordet Institute in Brussels.  Tine Geldof is a Doctoral Research Associate at Vlerick HMC.

& Rankings

Equis Association of MBAs AACSB Financial Times