Financial risk-sharing in updating the National List of Health Services in Israel: stakeholders' perceived interests

Country versus pharmaceutical company interests for hepatitis C treatment

Hepatitis C virus (HCV) is one of the leading causes of liver disease and is responsible for massive health and economic burden worldwide. The disease is asymptomatic in its early stages, but it can progress over time to fatal end-stage liver disease. Thus, the majority of individuals infected with HCV are unaware of their chronic condition. Recent treatment options for HCV can completely cure the infection but are costly. We developed a game model between a pharmaceutical company (PC) and a country striving to maximize its citizens' utility. First, the PC determines the price of HCV treatment; then, the country responds with corresponding screening and treatment strategies. We employed an analytical framework to calculate the utility of the players for each selected strategy. Calibrated to detailed HCV data from Israel, we found that the PC will gain higher revenue by offering a quantity discount rather than using standard fixed pricing per treatment, by indirectly forcing the country to conduct more screening than it desired. By contrast, risk-sharing agreements, in which the country pays only for successful treatments are beneficial for the country. Our findings underscore that policy makers worldwide should prudently consider recent offers by PCs to increase screening either directly, via covering HCV screening, or indirectly, by providing discounts following a predetermined volume of sales. More broadly, our approach is applicable in other healthcare settings where screening is essential to determine treatment strategies.

Risk sharing or risk shifting? On the development of patient access schemes in the process of updating the national list of health services in Israel

Background: Agreements between payers and pharmaceutical/medical device companies are widely implemented to address financial and clinical uncertainties. We analyzed the main characteristics of these agreements in Israel from 2011-2018.Research design and methods: We reviewed all agreements implemented during the study period. Information regarding the type of agreement, therapeutic indications, its time frame and the total budget involved are presented.Results: A total of 56 agreements were signed since 2011, of which 53 (95%) were financial-based and 50 (89%) referred to pharmaceuticals. The annual number of agreements increased from one in 2011 to 21 in 2018. The main therapeutic areas covered were: oncology (41%), hepatitis C (16%), neurology (11%), respiratory (9%), and cardiovascular (7%). The proportion of the annual budget allocated subject to these agreements increased accordingly from 3% in 2011 to 73% in 2018. The majority (63%) of the agreements were signed for 5 years, 9% were shorter-term and 20% have no time-limit. In 14 (44%) of the financial-based agreements implemented through 2017, the actual utilization exceeded the pre-specified threshold and the companies reimbursed the health-plans accordingly.Conclusions: The number of agreements and the allocated budget subject to these agreements increased substantially in recent years. Most agreements are financial-based that, in many cases, shifted the short-term financial risk from health-plans to the industry.

Expanding Canadian Medicare to include a national pharmaceutical benefit while controlling expenditures: possible lessons from Israel

In Canada, there is an ongoing debate about whether to expand Medicare to include a national pharmaceutical benefit on a universal basis. The potential health benefits are understood to be significant, but there are ongoing concerns about affordability. In Israel, the National Health Insurance benefits package includes a comprehensive pharmaceutical benefit. Nonetheless, per capita pharmaceutical spending is well below that of Canada and the Organization for Economic Co-operation and Development average. This paper highlights seven strategies that Israel has employed to constrain pharmaceutical spending: (1) prioritizing new technologies, subject to a global budget constraint; (2) using regulations and market power to secure fair and reasonable prices; (3) establishing an efficient pharmaceutical distribution system; (4) promoting effective prescribing behavior; (5) avoiding artificial inflation of consumer demand; (6) striking an appropriate balance between respect for IP rights, access and cost containment; and (7) developing a shared societal understanding about the value and limits of pharmaceutical spending. Some of these strategies are already in place in some parts of Canada. Others could be introduced into Canada, and might contribute to the affordability of a national pharmaceutical benefit, but substantial adaptation would be needed. For example, in Israel the health maintenance organizations (HMOs) play a central role in promoting effective prescribing behavior, whereas in HMO-free Canada other mechanisms are needed to advance this important goal.

Pricing and reimbursement frameworks in Central Eastern Europe: a decision tool to support choices

AIM

Given limited financial resources in the Central Eastern European (CEE) region, challenges in obtaining access to innovative medical technologies are formidable. The objective of this research was to develop a decision tree that supports decision makers and drug manufacturers from CEE region in their search for optimal innovative pricing and reimbursement scheme (IPRSs).

METHODS

A systematic literature review was performed to search for published IPRSs, and then ten experts from the CEE region were interviewed to ascertain their opinions on these schemes.

RESULTS

In total, 33 articles representing 46 unique IPRSs were analyzed. Based on our literature review and subsequent expert input, key decision nodes and branches of the decision tree were developed.

CONCLUSION

The results indicate that outcome-based schemes are better suited to deal with uncertainties surrounding cost effectiveness, while non-outcome-based schemes are more appropriate for pricing and budget impact challenges.

Impact of a financial risk-sharing scheme on budget-impact estimations: a game-theoretic approach

BACKGROUND

As part of the process of updating the National List of Health Services in Israel, health plans (the 'payers') and manufacturers each provide estimates on the expected number of patients that will utilize a new drug. Currently, payers face major financial consequences when actual utilization is higher than the allocated budget. We suggest a risk-sharing model between the two stakeholders; if the actual number of patients exceeds the manufacturer's prediction, the manufacturer will reimburse the payers by a rebate rate of α from the deficit. In case of under-utilization, payers will refund the government at a rate of γ from the surplus budget. Our study objective was to identify the optimal early estimations of both 'players' prior to and after implementation of the risk-sharing scheme.

METHODS

Using a game-theoretic approach, in which both players' statements are considered simultaneously, we examined the impact of risk-sharing within a given range of rebate proportions, on players' early budget estimations.

RESULTS

When increasing manufacturer's rebate α to be over 50 %, then manufacturers will announce a larger number, and health plans will announce a lower number of patients than they would without risk sharing, thus substantially decreasing the gap between their estimates. Increasing γ changes players' estimates only slightly.

CONCLUSION

In reaction to applying a substantial risk-sharing rebate α on the manufacturer, both players are expected to adjust their budget estimates toward an optimal equilibrium. Increasing α is a better vehicle for reaching the desired equilibrium rather than increasing γ, as the manufacturer's rebate α substantially influences both players, whereas γ has little effect on the players behavior.

Priority setting in health care as portrayed in South Korean and Israeli newspapers

Studies have reported differences in the public's understanding of, trust in, and satisfaction with its priority-setting processes and outcomes across countries. How the media frames and reports decision making processes and outcomes may both reflect and affect the public's knowledge of and attitudes toward them. Nevertheless, no studies have analyzed how priority-setting decision making processes are portrayed in the media. We analyzed 202 newspaper articles published over a decade, from January 2000 through December 2009, in leading newspapers of Israel and South Korea. The findings reveal intriguing differences between the countries in both the number and content of the reports. The issue of priority setting is much less salient in Korean than in Israeli society. While the complexity of the task was the most prevalent theme in the Israeli reports sampled, benefits package expansion decisions were most common in the Korean reports. Similarly, the Israeli reports emphasized the qualifications and backgrounds of individual members of the decision making committee, but the equivalent Korean committee was not portrayed as a major actor, and so received less attention. The least reported theme in both countries was priority-setting procedures and principles. These findings, along with results from previous studies which indicate that public satisfaction with the two systems differs between the countries, provoke several interesting future research questions.

Oncologists' and family physicians' views on value for money of cancer and congestive heart failure care

BACKGROUND

Previous studies suggest that cancer-related interventions are valued by policy makers more favorably than interventions for other medical conditions, but the views of practicing physicians have not yet been assessed in Israel. Attitudes and judgments of practicing physicians may assist decision-makers in their deliberations on coverage of new technologies. We conducted a national survey in Israel among oncologists and family physicians to explore their views on access to care, coverage decisions and treatment recommendations for cancer and congestive heart failure (CHF) patients.

METHODS

We administered a web-based survey to 300 family physicians and 156 oncologists. The questionnaire included 24 statements and physicians were asked to indicate their level of agreement with each statement on a 5-point Likert scale, ranging from "strongly agree" to "strongly disagree". Where relevant, physicians were asked to express their views on interventions for cancer and CHF respectively.

RESULTS

Response rates were 39% for family physicians and 36% for oncologists. Participants expressed similar views on cancer and CHF care and no significant differences were found between the two medical specialties. More than 85% of physicians believe that inclusion of a treatment in the National List of Health Services (NLHS) strongly affects their patients' access to care. Approximately 80% suggest that more use of comparative-effectiveness and cost-effectiveness analysis is needed in coverage decisions. The vast majority of respondents (75%) suggest that assessment of value-for-money should be made by an independent (academic) institution or the national committee responsible for recommending coverage decisions, Seventy percent believe that treatments not included in the NLHS should be included in supplementary health insurance programs and only a small minority of respondents (<30%) believe that cancer-related interventions should receive higher priority than non-cancer interventions in coverage decisions.

CONCLUSIONS

Our findings suggest that both oncologists and family physicians value cancer and CHF interventions equally. We could not find evidence for a "cancer premium" as implied from previous surveys and analysis of coverage decisions in various countries.