2nd Health Economics Conference - Which Pricing and Reimbursement ... | Round Table

[Music] [Music] okay so thanks for coming for this first round table so as you know we started this conference last year and with Jean we thought okay we need to have run tables so that we discuss policy questions uh so last year we had two run taes where uh we were discussing some policy and this year again and the first is today and tomorrow there will be another one on uh digital uh impacts in health Innovation that joh we will share okay so I'm just going to so there are a few more people coming in come in quickly okay so this table today I think it's a very interesting topic and I am very pleased to welcome the the speakers of this uh of this round table and I want really to thank them for coming um so I will I will first start with Philip Buu to my left so Philip Buu is a is an economist but uh more importantly currently is the chairman of the CPS so since uh four four years he's a chairman of CPS so CPS in France is the uh is a committee for health Healthcare product pricing so it's a very important committee that negotiate the and set the price of drugs or reimbursement drugs uh in France so um so that's something very important when you think about economic policy in France with respect to the pharmaceutical Market in particular then to the left of Philip Juliet Mo so Juliet is currently the director of economic Affairs of the LM so the LM is the organism that negotiate the price of drugs with Philip uh the context yeah of course so as as you as I will explain to you very briefly so in France we have a framework that is voted and that is a law and of course within the framework U Juliet and Philip cannot cannot do whatever they want okay they have to respect this framework but basically the LM is the association of the Professional Organization that represent the pharmaceutical industry uh in France which is of course a very important industry and then to the left of Juliet David redle so is very well known for health Economist he's a health Economist from duke business school and uh he known to have worked a lot on incentives for Innovation and and quality and one of his remarkable achievements is that uh some of his research has been proposed and voted and became a law in the US in particular the one that concerned the priority review VES at the FDA um which raise a lot of money I have a few figures here but uh maybe I mean it's not the topic of the of the question of the round table today but this is very important for Innovation uh on uh on Pharmaceuticals which is of course important for the us but also a lot for Europe uh given the spending of on Pharmaceuticals in the US that creates a lot of innovation for every everybody so the so thank you all for for coming and accepting to be part of this round table so it's a little bit um in the spirit of the round tables we want to do um and uh is to have some discussion between academics and practitioners from different point of view from the point of view of the industry from the point of view of the state of the regulator so I think this is really a very good example of the type of discussion we want and of course um there are a lot of things so the question of today is raised by uh the recent evolution of innovation so as you know in pharmaceutical there is a lot of progress we have Gene therapies we have a lot of scientific we had with the covid messenger RNA technology which allows a lot of things and all this uh progress is very uh useful very uh uh is going to to create a lot of innovation but of course some of these Innovation are going to be very costly some of them are going to lead to uh some sort of personalized medicine where you're going to have a a drug design for your for your dcas and for your Gene types and of course you can imagine that this could be very costly uh so there are a lot of questions about what should be uh the the price in the in in such an environment what should be um the outcome of price negotiation or you know countries what should firms do in order to to to price those products and I thought it was interesting we thought with Jean it was interesting to talk about this because uh it's very important for access to Innovation uh but uh one of the issue is that it's also important to generate Innovation and that's always the difficulty with Pharmaceuticals is that the price there is not a single price even within a country you have multi price you have the price that the manufacturer the innovator will obtain you have the price that the insurer will pay you have the price that the insury will pay out of pocket and then you have international effects International speed overs price in many countries and of course it's all those prices that are going to be the outcome of a big equilibrium uh that are important for for Innovation so we have to take into account all these aspects which make it very difficult and uh even if we were starting from a wide page okay even if we were starting from an IDE world where as an economist we want to design the optimal uh price setting mechanism the optimal regulatory mechanism it will be already very complicated but we also don't start with a white page we we have a lot of constraints and um and so we are going to talk about this and uh and the last comment I would like to do before I start really the discussion with you is that of course we are very often as Economist we criticize criticize a lot of uh bad regulations uh a lot of perverse effect of regulatory rules or or or behavior per bad behavior of firms like collusion or whatever um of course Philip or Juliet are not responsible for any of that okay and uh and that's a very hard work for example for the CPS in France to work within the framework okay so now Philip is going probably to start and remind us what is this framework but there is a framework that is a low that uh is is there and voted by the Member of Parliament uh and changes regularly every five years maybe or uh and so it's a it's a very complex work so maybe let's start uh and so the first question so this is a big question okay which pricing reimbursement model should we use in particular for inov Innovative therapies and maybe uh Philip you could start with presenting us what is as a head of CPS what is your point of view and practice on this okay thank you Pier thank you for the question but firstly thank you for inviting us and as you understand we are not I'm not at least an economist an economist yes I am but I'm not an academic and I'm more of a practitioner and um it's not my day-to-day activity to have exchanges with academics so for for that and for this invitation I wanted first to to thank you and maybe to start a few words about the the French system even though you have started to to give some indications I will be very brief uh as you said we negotiate with companies and actually we negotiated two different levels uh we have we have some general principles that are set by the law and then we negotiate with the lamb Juliet uh a global uh General framework which means which tells us how to implement the law uh and then the second level is that we negotiate on a Case by case uh approach with uh companies for each price for each drug that is reimbursed uh in France so that that's what we do and the the general principle the one that is set by law is that for setting the price we take into account firstly the the clinical value or more specifically the clinical added value of a medicine and this is uh appreciated by a scientific committee we are not a scientific committee but there is a scientific committee within the National Health Authority uh that as that uses a ranking between one to five for products according to the level of innovation that it brings about so this is the the entry point of the negotiation and of the setting of price what is the clinic value added uh of medicine then we look at comparators clinical comparators and we decide whether there should be a premium or a discount compared to this relevant clinical comparator uh if I say that in that way it seems very simple actually what I said is an oversimplification it's much more complicated as you can imagine but this is the general principle then in this framework uh you know the point today is to to look at the specific challenges or debates that we have about the price setting of innovative and costly uh new drugs new medicines so uh in terms of the specific challenges I would uh underline two two of them first one is that well those cly products they are indeed costly so uh then there could be a question about whether we can afford it or not but the point is that more and more often in the past few years we have had to face some claims by pharmaceutical companies for very very high prices and this is the more and more so um since more and more often companies re-announce a Target price that it's that is supposed to be a global price internationally you know they know that the European system French system in particular is different from the US one but nonetheless and everybody knows that price of drugs are much higher in the US than in Europe and nonetheless more and more often when they come to us they come with a claim that is more or less the US price so this is this is an issue and the the first question for us is should we accept and uh my guess is that among you some some academics will say that yes because if we do not accept you know if we insist that the price should be lower in France than in the us or elsewhere it means that we are trying to act as a free rider because it's the US consumers that will pay for the cost of investment and R&D and the US so my guess but you'll tell me and David will tell me is that some of you would consider that we should accept to a very high price as in the US for instance but the truth is that our answer our answer to that question is no and we don't accept so we can have discussion about the reason why we we we don't accept uh we negotiate and uh you know again our approach is to consider clinical comparators which have already been priced in France and this is our Benchmark this is our reference our Benchmark is not the price in the in the US so this is the first debate there is a second challenge that I wanted to underline is that even with within our system Innovative products are becoming more and more difficult to price uh this for several reasons and I will just take two examples uh the first one is Gene therapies Gene therapies it's complex to price for several reasons first one from our point of view is that is the principle of a one shot product I mean one single Administration and you understand that what we do when we compare the cost of a treatment between a one one shot track and chronical uh treatment it's you know you cannot do it just as usual and a second feature of those therapies that is a challenge to us is the fact that actually there is a lot of uncertainty about the effect and more specifically about the length of the duration of the effect of this one shot injection so it's very complicated for those reasons but it's not only with Gene therapies that we have to face new challenges it's also the case for instance with immunotherapies and I was very interested in the previous uh session and uh about what was said about uh Forum shopping because I had you know I I planned to insist on this issue but uh it was very well explained in the previous session but what I can tell you we have some discussions later uh is the specific challenge for Price setting when you have not to negotiate one product but 10 or maybe 20 indications different indications for the same product and they come to us in an order that is not random they they may I mean the the those companies they may uh try to have a strategic behavior and trying to Anchor the negotiation by presenting to us firstly the indication that will help them gets initially the higher prices so this is one one further challenge so uh I will faced with those challenges how do we do in practice I will be brief uh just to to tell you that we have two relatively new tools at least in France these are new tools new instruments that you can we can mobilize the first one is what we call Performance contract or outcomes based payments you know it seems obvious who is against the use of real world data we we all support this approach and for instance it's one way to deal with the high uncertainty that I was referring to nonetheless we have we have some reservations about this approach first one is in terms of feasibility and a second one is that there is a risk that by focusing too much on the way you know the modalities of the payments you know because with those performance contract comes uh some kind of installment payments we we pay over time depending on on the success or failure of the drug uh to uh to pass some uh test at some time so it's um the the risk is if we focus too much on the way to uh do the payments we will lose sight of the most fundamental question which is what is our willingness to pay what is the estimated value of the drag this is more important then the second instrument that we can mobilize eyes for those very Innovative product it's the cost Effectiveness approach personally but I taking you know it's personal view uh this is the approach that I have favor sorry it uh it provide us with a metric which is the icer and it broadens the perspective that we can have uh when setting the the price but it also raises some difficulties in particular when it comes to defining some specific threshold in terms on the I icer because it raise very difficult questions such as you know in in terms of the the price of life and so on and my point is that it seems to me that in France we are not yet ready to to adopt this approach because of the the impact of questions about the the price of of life for instance but nonetheless my view is that even without an explicit threshold we can we can use effectively this kind of approach to better uh set the price of those uh Innovative products I have some other remarks but thank you I think we will come back to you we'll have more discussion I think it's it's good that you presented the framework because then Juliet does not need to repeat it uh because of course it's very French specific and not everybody know knows it here um so I have a few remark but I will keep them for after and maybe let Juliet tell us about her own point of view and experience so it's not going to be very disruptive because I will be much along the line that Philip just described um thank you very much for for all the papers and all the discussion I think mostly we need more academic economics uh in in drug and and French studies in the French context as well it's it's it's always fascinating to see the different point of view that you have on the world compared to what we live as practitioners every day um and I guess the the question that we raise very often in France right now is what's the difference between a very costly drug and a drug that is too costly too expensive and um I think Philip just tou touched on this with the cost Effectiveness analysis and and the issue that we have is that financing a drug can be an investment to save other resources or to save money from the future for example the issue that we have right now in France is that we are looking at our drug budget in isolation and we are pricing drugs compared to other um drugs we we are not looking at what happens to other resources outside the drug budget so if you look at this any costly new drug that comes your way is just a budget disruption because you want to constrain your budget you doesn't you don't want it to grow by more than x% so if you get a very costly new drug it's just going to derail your perfect growth pattern for the next few years what happens also is that we are looking at our budget in isolation each year from the next so this investment mentality is hard to find because in that way you're sure of the money that you're going to spend today but you have uncertainty on what is going to gain you tomorrow so investment is hard to defend and we have medical economics but as for drug pricing it's set in a very constraining legal setting and I explained our medical economics to an economist recently he looked at me and said how dare you this is not economics so we we have a bit of work to do still to expand what we're looking at in our efficiency models to use it better to to document the investment and to answer this question is this drug costly or is it too costly is is it a question of cash flow or is it a question of value right now and the uncertainty is part of it because if you know that you're spending something today and your return in the future isn't set in you can understand the regulator who want to be sure of what he's going to spend and you mentioned Philip the the the case for for Gene therapies which promis an effect for life but can only show it over the past few years or past few months how can I be sure that the money that I'm spending today in this drug is going to translate in more efficiency for my system in the future the other issue that we have still by looking at our drug budget in isolation pricing drug in isolation is that we don't look at change management I have a very costly new drug that is probably very disruptive for the hospital setting as well how we are going to treat patients in the future how we are going to use resources differently and currently this change management is not anticipated so when the drug arrives it arrives in the current system in the current setting on how we do things and we see the cost of what we do currently plus the cost of the drug and not the cost of the alchy between the changes are going going to happen and maybe the last uh question I want to raise is what is price in our French setting price is something we pay for drugs it's what a drug is going to cost me and um price can also be something we use for another purpose for um we're talking a lot about um sorry I'm struggling to find the words in English but having the drugs available on the French soil on European soil um so the industry part of it is probably something that we use for industrial purposes for the European territory or the French territory is price something that we use to steer Research In One Direction or another and currently the way we do things pricing drugs versus drugs that are already here in the same domain means that if you are an innovation in a field where nothing has happened in the past 40 years your price is incremental compared to drugs that don't cost anything anymore so you are not incentivized to to to innovate in these fields so on this very easy question thank you jet I have a again remarks but David maybe first thank you Pierre so first a question for you uh which country has the best healthare in the [Music] world did I hear France yeah so the World Health organiz gation years ago ranked France number one I think the World Health Organization has only done this ranking once uh it's a bit controversial uh we Americans were deeply offended that we are ranked 37th uh but here I an American to give you my I'm from the number 37 country and I'm here to tell you my opinion you're number one in financing Innovation so you I think you can speak good good okay good thank you thank you so uh first of all just want to uh build on some remarks by Juliet and Philipe first Juliet with regard to budgets uh one more question then I'll stop asking questions uh what share of national income does France spend on Pharmaceuticals so I think France like the United States spends about 20% of its Health Care Budget on drugs so in the US and France it's about 20% on drugs I think France is about 10% of national income on Health Care so um 20% of 10% is 2% so Juliet talked about the budget now for Philip he doesn't get he doesn't get the whole GDP to select from of course so he has to do his best with the budget but from a country perspective 2% of national income is not massive so a given drug might be very expensive for a patient it might be very expensive for Philipe given his budget but for a country spinning 2% I we talk a lot about the United States that this drug is going to break the bank but uh I'm skeptical of that argument building on a couple of points from Philipe he I was delighted to say that he views Val views incremental cost Effectiveness analysis favorably France already has a pretty good system pricing based on value and in fact Margaret Kyle introduced me to the system because as an academic it's a nice metric of the added value of a drug so as we as academics want some Metric about how much better this drug is than that drug it's it's a useful metric for us but that at least is has some reflection on value although I like even better what the British do with regard to cost Effectiveness analysis of course I think Philip said that what really matters here is the threshold you use what's a value what's a quality adjusted value of a life year and I think the British are very cheap in this regard at 20,000 to 30,000 pounds per quality adjusted life year I think is very low I understand limited resources I also understand that most countries have very little effect on incentives for Innovation and in fact if you disaggregated the United States I think each state would love to pay very low prices for drugs because each individual state would have almost no effect on Innovation and each state tries to you know Colorado has this new board that decides whether a drug is reasonably priced or not so it's not clear that the federal law will will allow this but each state the United States would love to say we're going to pay lower prices because each individual state has very little effect on Monday uh I ended a seminar in here Professor Ariel pus was in here and he wagged his finger a little bit uh he said that he and Professor Kate ho have a paper documenting free writing but it's it's again very understandable and it's something we as individual states would would do if we could but perhaps there's may be some potential for Collective action the sort of collective action 've seen with regard to climate change thank you David a very good remark so and it comes back to my initial thoughts when Philip was talking about uh the fact that some companies may may may like a single price for the world I think it's not totally true uh because it's accepted that price could be different and not uniform across countries of course according to income and then we can I don't see the the uh Farm compan who are free to set price in a few countries I don't think they adopt the same price everywhere of course then there is a question of the interaction between the this price setting which may not be uniform um because of different constraints the need of the drugs that need be different uh the population the demographic the income Etc so the demand for different treatment may be different in the US you have much more obesity than we have in France so of course some and much more diabet so the demand for diabet drugs is going to be very different in in the two countries so it's going to generate price differences there is no question on this and I don't think that you would have a single price even if there was no regulation the problem is when you have you have a regulation together with this nonuniform pricing and all these speed overs that are sometimes explicitly given as we we do in France I think very unfortunately use a lot of preference pricing in Europe I don't think it's a good idea and it generates so many perverse effects uh including delays in Access Etc uh so I'm not going to talk too much about this because it's not really the question of today but it is related so when you will have very Innovative therapies so maybe Juliet can give us example there will be some very great Innovation against hemophilia for example in a few years they are going to be very expensive and if we have these still this perverse reference pricing effects it may be that access to this very Innovative product is going to be delayed in countries that are referred as low price countries by other other places and this is this is where it makes it very complicated so maybe you Juliet you have a few remarks on this because I know you know well this yes maybe a quick word on International reference pricing we did a study a couple years back where we showed that France was actually referenc in one one way or another in between 40 and 50 countries all over the world so not only in Europe but all over the world and in the Dynamics that that Philip described earlier where companies are are now defending a global price I think we can see some worry about changes in the US uh where the the the idea of referencing European price in the US is H is worrying for companies which are currently differentiating those prices and may have an effect in in what the companies will be able to negotiate in Europe tomorrow as well yeah so to come back to the very costly Innovation so and then maybe you want to Philip you want to add something no come back to the very costly Innovation imagine that you have a hemophilia or something very serious um and we have potentially an innovation with marginal cost of production is going to be very high because it's a gene therapy because it's something that has been that needs to be designed for yourself so I have I have examples for example in another area in vaccines against some types of of cancer okay that are currently developed there will be individual vaccines against these type of cancers and to lose the uncool I mean the cancer hospital is developing these are doing clinical trials we know the marginal cost of production of this individual therapies are going to be very high like hundreds of thousands of euros um should we pay for that so there is a question of affordability but I think if we look at the long run it's the different the question is a little bit different because by paying for this you give access to some treatments that are going to become more routine and maybe in the long run they will be become cheaper if you don't do it then you delay the process of learning by doing and uh um all the efficiency gains you can you can have by and the scale economies that you can develop U so theoretically and then I know there are a lot of constraints from the regular point of view it makes totally sense sometimes to pay very very high price with a commitment that you will accept very much lower price in the future which is very difficult because it means long-term commitment on both sides on the side of the industry and on the side of uh of the the buyer and so I was thinking okay this is totally outside of the current framework all these Dynamics commitment where you would say I buy this first unit this this 10 for this 10 cancer vaccine this year at 500,000 uh but with a commitment that in five years it will be 50 so uh and there are reasons to believe that this could be uh when you discuss with the industry that this could be a feasible mechanism from their point of view um so so I wanted to mention this because I think this should be discussed later on by uh in the negotiation for the future Frameworks uh in France and in Europe a few comments you made you made different points first I will not insist too much on that but about the the single price you know the global price of course the they they know that there will not be a single price my my point is that the the pharmaceutical company they pre-announce a global price and then it happens what happens but they pre-announce price and then there is a pressure on us about this price at least to have it as a least price if not as a net price but we have those kind of pressure and then even if we look at the net price we have the same kind of pressure uh two years ago or three years ago we have a new gene therapy uh the name is Zino and they they came from the US and they came to to France Europe France Germany Italy and as you know it's not a unified system so they had to negotiate country by country but it seems that we had more or less the same willingness to pay and then they failed to get the price they wanted in Germany and so they said well we withdrawing from the European market because we cannot get the same range of price at least as in the US so this is a pressure we feel that's my my first point then about the marginal cost of production it's interesting because a debate we have outside of the academic world about the marginal cost of production is exactly the opposite of the question you were asking because most people say those Innovative products are too costly and the proof is that if we look at the marginal cost of production it's much much lower than the claim by the company so we have some pressure it's more at the political level it's in the public debate to set the price according to the marginal cost of production and I don't remember the name of the product at the moment but there is one example that that is very often quoted in this respected moment is that one product that is manufactured uh in Barcelona in Spain at the moment for 20% or 10% of the official uh price so that's that's a good point so up to now most drugs were simple molecules where people were not caring too much about the marginal cost because marginal cost was indeed super small and and then the price was something else it was not to to pay for the marginal cost of production it was it was to pay for to reward Innovation to to to re to reward access uh Etc but what I'm saying is that with these new technology that may raise a lot the marginal cost of production and then you you may indeed argue that there is an incentive for the industry to try to overstate this this cost but this is going to make negotiation even more difficult because there is clearly a price below which they will not be able to produce so that was and then your third Point uh on which I wanted to react is uh about you know the possibility to to to plan some cut in prices over time we can do it but usually what we do is that we don't uh you know we don't set some uh predefined deadlines saying in year four it will be minus 10% or so on what most of the time what we do is try to have some kind of contingent approach saying if this event happens such as a new competitor that is less costly or a new eval evaluation assessment by the National Health Authority then we will renegotiate the price this is what what we do and there is one thing that we try to plan in a more uh directive way uh which is you know the objective is to prevent companies to deter entry into the market so we would like to support competition and for that we we have one tool that was not mentioned in the previous session which is that as I already said we have the least price and then we have the net price okay which means it's it's quite convenient for everybody in order to reach an agreement on the net price because the the company gets what you want it wants it wants a signal and the price signal internationally is given by the least price and we got we get what we want because the net price is lower so it's very convenient and when it's set everybody is complaining but initially everybody is happy but then it means some opacity as regards as the the the as regards the actual price the net price and one you after 10 years when the product is going to lose his uh protection intellectual property uh the patent uh then the competitor the potential competitor needs to have some knowledge of what is the actual price and in many case at this stage even after 10 years we still have a difference between the least price and the net price so something that we are proposing to our colleagues from the industry is to be very strict in this respect and to say that before the generic products come to the market we need to have least price eal equals net price so this is transparency and this is this lowers the barrier to to entry so this we can plan it in advance okay thank you Juliet or David if you want and then maybe maybe we'll take some questions it's not I'm agreed is that this reference pricing between countries that we observing in Innovation we also observe it sometimes after um loss of of of exclusivity sometimes even in the generics or bio soless Market it's something that we observe and in our companies just alert to the fact that if the French price is significantly lower in a context where sometimes drug become a rare resources then the French Market might be de priorize hence some discussions that we may have um in this respect but we'll we'll find an agreement I'm sure so Pier you asked about uh High marginal cost products and I gave the answer earlier we should just use cost Effectiveness analysis and it might not be cost effective then and then we wait until it gets cheaper but then you said well maybe that's endogenous so maybe using it now causes it to get cheaper later and I actually don't know the research on this maybe you've written on this I'm working on it okay good good oh that's fantastic because we need to know this and maybe in the Pharma setting we can also learn from Green Tech also that we're subsidizing Green Tech because we think this will get cheaper but uh if it's endogenous that makes a strong case for spending now and and airing on the side of Innovation yeah thank you um we can continue the discussion or maybe take some questions because we have 15 minutes and I know that otherwise we won't have time and then see some of you may have questions raise your hand Karina okay so it's just a a clarification question with with with respect to France so I always thought that in France the net price was equal to the least price I really thought that in France the least price was equal to the net price it's not can you explain me how it works so the the law says that no I mean if I go to the pharmacy let me just give an example yeah so I pay for the drug I have the net price and I'm reimbursed from Okay so by the government so maybe so so um that's something we didn't explain but Pier touched upon this a bit earlier we have different prices in the French market for most products those you can buy at the pharmacy you have a national price which is public um on which you have the price that's paid the manufacturer price plus everything we pay for distribution and the and the pharmacist to to get payment on on on the service of delivering the drug um this is reimbursed in part by Social Security in part by um the patient him or herself or the insurance and on the total sales that the company makes they can award a proportion back to Social Security at the end of the year so there is a net price that is a financial agreement between Social Security and the manufacturer at the end of the year based on the sales that were made this given year so there is sorry there is a less price the manufacturer list price the less price that is seen by the public with all the taxes and distribution costs and there is the net price that is known only by the manufacturer and Social Security which is after all financials agreements have been paid and there is an net net price after adding specific taxes on the on the drug Market in France which is even lower than what the agreement states between the the manufacturer and Social Security maybe one one one Precision on this um you write on 95% of the products if you look at the number of products it is less than 5% of the products for which we have a difference between the least price and the net price but if you look in terms of the the value of those products you know it's the most costly and the most Innovative products on which we have the most uh differences between the two and it can reach in some cases 50% in some cases it's even more in most case it's uh it's less than that and we of course these prices are confidential we don't publish them but nonetheless we we publish some average for each group of uh of drugs we we give an average of the difference between least and uh net price Karina use the microphone because otherwise sorry and those uh 5% most of them are 100% finance special Social Security I guess I mean those where you have a difference you you don't have the the the I mean the patient paying for them yes and most of them are Hospital drugs as well which is 100% offended by Social Security okay thank you so much uh that was uh really interesting um I've studied the German system which has many similarities of course uh to the French system but also some differences I wanted to ask something so I was I was at an event a couple weeks ago where I listened to um a bunch of primarily medical device manufacturers tell me what they think the new European joint health technology assessment regulation means for them um and so I was going to ask specifically David this is not a question for you I'm sorry but for uh for the other two speakers um the question is so maybe you could sort of say a bit about so what I would love to understand is what this means for your work so if we're GNA in within Europe go about harmonizing Health technology assessments for I guess Cancer drugs as of January 1 uh we heard about those in the last session and then medical devices and everything else sometime before the end of the decade what does that mean for your work is my first question um because so much of the work is so country and context specific um and then related Juliet I I was thinking a lot about something you said and something that I've written about is just that the um sort of this conversation about sort of the marginal cost of production I actually thought was almost like frustrating because when we talk about Gene therapies and cell therapies we're talking about like a lot of healthc care production but not a lot of actual pharmaceutical Manufacturing we're talking about extraordinarily costly hospital stays and sort of how should I think about like I don't I think the marginal cost of production is an increasingly less relevant concept when we talk about these very costly therapies and so how do you see that fitting in going forward and then but the EU question is and then the sort of if you could put the spin on it of like what would you like to see academic Health economists ask about based on the answers I would of course be particularly curious about that so the easy part Health technology assessment in Europe um so the the it's coming in place from January for for some drugs uh what happens that the reimbursement decision and the pricing decision stay at the state level so our work is going to be mostly the same in the future um the question that we have as a as drug industry is how it can affect positively what happens in the French setting um to give a bit more Contex we we have long access delays in France compared to other countries and European countries and I see we have some um circumventing um of that because we have a specific dispositions to help uh very Innovative drugs get faster to the first patient in France but overall if you look at the the rules the set of rules for everyone um the the actual date for coming in France for everyone is a bit longer in France than in other countries so what we are hoping is that the sequential process that we have currently HTA once you get HTA you start negotiating your price and once your price is negotiating it still has to get published and this is a step in itself and we hope that the HTA part will be accelerated but what's going to happen in Europe it's not um very clear right now how it can accelerate what happens in France but we we are working with the it's more the hsd Health um the the sorry health authority sorry that that works with us on this on how it can accelerate their HT process in France based on the work that will be done at the at the European level for your your second question um I guess what we see in France is that for hospital stays uh and for very costly drug they are separated from the rest of the costs of the hospital in taking the patient in charge so for for for most of the drugs what happens is that the hospital has to pay for the drug and and fit it in its budget for very costly drug they can ask for a specific reimbursement for the drug on top of what they get for treating the patient but the the the question you ask is is related to change management for me we we saw that a couple of years back with the first CC cells um which arrived on the market and then trigger the the changes inside the hospitals to make it happen and and what we're seeing that it's May it's maybe going to be the same with these very costly drugs which will entail very costly procedures will need to change the actual medical time spent in the hospitals to treat a single patient maybe change the security or the the the the processes within the hospital and this is something that that's not necessarily been anticipated in the French setting um we are doing an horizon scanning exercise as well we see that the nature of these Gene therapies is also changing in the future from from um um so cell that you modified outside the patient's body um or cell that you modified inside the patient's body and and we see that some technologies that have been the first one being developed are actually maybe going to slow down a bit in the future to to see other Technologies come up so the industry is is doing this work a bit by themselves because in the French setting it's hard to discuss this prospective um changes that need to happen in the hospitals to make the drug possible in the French setting maybe a comment so first coming on the first question about the European HTA what I have understood is that the benefit of this will be so that we don't replicate nationally the HTA assessment and I hope this will be the case that's a spirit of this European HTA for concer drugs Etc so I hope this will be used U but of course it means that um the regulation or the law needs to be changed also nationally because there will not be the same criteria for evaluation because this would be a European level criteria so uh maybe comment on the marginal cost of production high or low Etc I think this is true that U uh for for this Gene therapies a lot of the cost is also the the the cost in terms of administrating the the drug and looking at all the side effects and all the I mean this is much more complicated than a standard drug um so I have an example where here in in the cancer hospital in Tulu they are doing clinical trials for vaccine so I was talking earlier about a vaccine against some head and neck cancers where the technology is uh is very promising and basically it's extremely costly because it's a it's a gene modification technology where you take some cells of the tumor of the of the patient you send it to some to these biotech company that is isolating I don't know they are doing a lot of things with jeans they are doing a lot of artificial intelligence design and then they modify some Gene that they that they introduce in a virus that will serve as a vector and you inject to back to the so it comes back to the patient you inject it and then 50% 90% I don't remember they get cured and they don't have really uh but but of course this treatment has a lot of you have to take be very cautious so it's very costly to also to manage in terms of medical uh side effects Etc and what they claim what this uh hospital is claiming is that currently this is financed by the clinical trials by the companies but there is no way we can pay for that in the in the future so if you're not in the clinical trials you you will not have access to it um so that's one of the one of one of the issue that how how do we deal with that um you know first it depends on the precise figures because the the points you made you made are right but then the the same you know the the price of such uh Gene therapies I don't know whether you're familiar with that we're talking about claims that range between 1 million and 3.5 million euros for one injection it's not exactly one injection because there are some preparation and so on and so on but uh so it will be costly and we will pay for it but maybe the the the company will claim 3 million and will say that well 1 million is enough and then we have a negotiation but uh you write on the principles but then we have to to check into the the details of the of the figures we have time for a couple of last questions one one quick qu uh question and one quick comment about marginal cost so the question first one is about uh reference pricing and you mentioned that people threaten or firms threaten that they will leave the market or can I just wanted to know how many times have they actually carried out such a threat uh of leaving you know a large market like European market even if the price is lower and the second is just this one quick point on the marginal cost is the right place to look for what's the right pricing model and reimbursement for higher marginal cost is to go and look in the health care in the hospital sector people have uh open heart surgeries and other things going on which have very high marginal costs associated with them uh should we be looking over there to see what might be the right model for reimbursing these new costly Innovative Therapies in the drugs Market as well maybe um Philip you're the one for the first question as the the CPS has started to track the negotiations that don't go to their ends uh and some reasons might be the firm leaving the market some might find other reasons um it's it's something that has been talked about for a long time in France but Innovations were still arriving in the market and and we're we we're starting to see examples as Ino but it's hard from my point of view to to actually give a figure on that Yes actually I gave I gave one example because this is the one I have in mind and it was not a refusal to go to France it was a refusal to to to come to to Europe actually it happens that some products decide not to come to the French Market but as regards Innovative products it's very very unusual very very rare you know I mentioned the ranking by the national uh uh Authority for rails the ranking goes from one to to five if you look at the ranking one two three which are the the the main the the the main Innovative products I have no example in mind of one product that has decided not to come to the French Market in the past few years maybe a few of them I don't have them in mind at the moment so it's it's quite unusual and and then and then you are Juliet mentioning some products that can that some companies that can make such decisions we have not to uh to put in the same basket new products and Innovative products because yes it happens that new products don't don't come come to France but usually it's products that have got a bad or an average ranking on marginal cost in the cost of procedures um the the the way of setting the hospital payment for for patient treatment is very specific in France as well I don't know how they manage the this cost of their costly procedures uh we know that it's a it's a yearly discussion between uh my colleagues for hospitals and the government so it it may not be that easy but it's a good idea to go and and check how they're doing things just a really quick example of a drug that didn't launch in a country you might remember the vertex of cystic fibrosis drugs quite famously did not launch in the UK because they were not deemed cost effective at that threshold um I um I sit on a committee um a National Committee in Canada that looks at um for access and reimbursement so covering new drugs and um one question that I have and maybe um Philip will have a an idea of how to deal with that but um around the pricing trans transparencies when a new drug comes into Market or when they apply to come to Market that we we examine the value the the effectiveness of the drug but then the pricing is compared to whatever is available on the market on their list price as you mentioned the negotiated price are um are not available to to us Soh so all the we have the we have the isers ETC but it's always compared um with the list prices of the available drugs and so um in the end I I finally our analysis is biased when we're looking at the value of a new product because um because they're comparing it to uh with a price that is not the the actual uh of what we're paying um so I'm I'm wondering how or you know like Avenues or um solutions to to that issue in the context of uh of the absence of transparency on prices thank you this is a tricky issue for negotiation but what happens you know in in practice when we have a new product uh and we have some comparators and we at the CPS we know the net price so what we are going to negotiate is a net price for the newcomer that is consistent with the net price of the comparator but the problem is and you're right in terms of the lack of transparency is that the newcomer usually it it doesn't know the net price of the comparator and we are not allowed to tell him precisely the net price of the comparator because it's supposed to remain confidential so then it's a matter of trust but we are committed to give some indications or order of magnitude but without explaining the details of the confidential contract we have with the the competitors so there is some kind of a symmetry of information and on the other side there is another kind of a symmetry of information which is that the company we are negotiating with have a good knowledge of the international net prices of his product and we don't so we have two different symmetries of information it's a bit tricky but usually in the end you know there is you know there is some misunderstanding at the beginning of the negotiation because the the the company will tell us well it's not possible the difference between the least price and the net net price of my competitor is so large and we have to say yes it is you're not going to have the precise figures but we can we can tell you that it's in the order of more than 20% for instance maybe a quick comment because from the outside the company may be a single entity what happens very frequently is that the the French subsidiary actually doesn't know the net prices in other countries so there is an asymmetry of information in theory but in practice the people in the room have quite the same information about the international prices and regarding the the treatment of different companies in the same field a representative of of our uh competitive authorities sits in the in the Philips committee so it helps building trust in this respect as well thank you so unfortunately I think we have to stop uh thanks a lot for this uh very interesting Round Table I think we we could talk more so maybe we'll do it next year we'll continue this conversation but thanks a lot for everybody so we have a the last session of the day so I propose that we have a two minute break for those who need and we start at 45 okay so we everything is delayed by 15 minutes [Music] [Music]