The Swedish Government has requested that the Dental and Pharmaceutical Benefits Agency (TLV) develop new methods for health economic evaluation and payment methods for Advanced Therapy Medicinal Products (ATMP). The current system and payment methods present challenges, as ATMP often have limited evidence and high upfront one-time costs.

The TLV presented a first report in April 2021 and a second in April 2022 [1,2]. The government has now requested that the TLV continue with the work and has asked for a new report in September 2023 [3]. The new report will further develop methods for managing the high uncertainty for long-term ATMP outcomes and how this can be integrated into the health economic evaluation. In addition, the report should also present an outline for a national structure for outcome-based payments in collaboration with the National Therapy Council and the healthcare regions.

The ATMP are providing new treatment options for diseases that were previously difficult, or at many times, impossible to treat. However, they also provide challenges due to the high cost per patient and the high uncertainty in the cost-utility estimation.

The first two TLV reports focused on three themes:

• The uncertainty related to long-term treatment outcomes
• Managing the payer’s risk when buying a product that is not cost-effective by introducing new payment methods
• Accept a higher cost-effectiveness ratio for ATMP

Managing genuine uncertainty

New drugs that are introduced often have a high uncertainty related to long-term outcome prediction. This uncertainty is further accentuated with ATMP as the treatment is given one time only.  In many instances, we must deal with genuine uncertainty, i.e., there is no indication for how long treatment outcomes can be expected. The evidence is often based on data from trials with few patients, short follow-up, and no control group.

One option to manage the high uncertainty discussed in the reports is that instead of having a base case estimation of a fixed number of years of outcome, one should calculate a weighted average of different probabilities of years of outcome. This “weighted outcome” will be included in the cost-utility analyses and be part of the quality-adjusted life year (QALY) calculation, i.e., TLV’s preferred measure of health benefit. How to generate these probabilities is not clear, but should be further discussed in the coming report.

New payment models for ATMP

Another option for managing the uncertain outcomes is to use payment methods other than what is used currently, often a “price per pill” approach. In particular, TLV argues that the use of payment by results are of particular interest for the ATMP due to the high uncertainty about a product’s value (see Hertzman et al. 2018 for a review of different innovative payment methods) [4]. To further support the management of ATMP with high outcome uncertainty, plus a high one-time up-front cost, is to add a staggered payment scheme.  Such a scheme can link the payment to the actual outcomes that the treatment provides per time period with the actual payment. When a treatment does not produce the health outcome, the payment should then be stopped.

A key challenge for such a solution is how to measure relevant outcomes. In Sweden, as in many countries, there is a lack of health registers that collect data that match the outcome measurement agreed to in the payment contracts. In addition, it is not possible to identify which patient received which treatment.

Different thresholds for indications with few patients

Today, the TLV may accept a cost/QALY for ultra-rare diseases that is twice as high compared with severe diseases that are not ultra-rare, i.e., SEK 2 million compared with SEK 1 million cost/QALY [5]. It is not clear what is meant by ultra-rare, but it is likely to be less than 50 patients/year. As well, this topic will be further discussed in the upcoming report.

What are the implications for companies launching ATMP?

For companies with ATMP, it is difficult to envisage what a “weighted average” for different outcome scenarios will imply. One obvious option to reduce uncertainty is to invest in health registries that can provide individual patient data. Building health registries can also support new and more relevant payment schemes for ATMP, e.g., payment by result. The TLV is explicitly requesting ATMP companies to participate in pilot projects related to payment by results.

There are other payment options that can be of interest to ATMP companies, for example two-stage pricing where the healthcare providers pay an up-front cost for access to the drug and then a lower marginal cost for each pill or vial that will be used [4]. Such a scheme has the advantage to be easier to manage and with less complex patient information.

References

1. TLV, ATMP Report 2021 www.tlv.se/download/18.6dab39ff179179457163977e/1619976447278/Sammanfattning_Rapport_atmp_20210430.pdf
2. TLV, ATMP Report 2022 www.tlv.se/download/18.2e6fc6bd1804dae423a9b322/1651468778330/rapport_atmp_och_precisionsmedicin_2022_dnr_1868-2021.pdf TLV 2022
3. TLV, 2022. www.tlv.se/om-oss/press/nyheter/arkiv/2022-06-27-tlv-far-nytt-uppdrag-om-precisionsmedicin-och-atmp.html
4. Hertzman et al, 2018 https://pubmed.ncbi.nlm.nih.gov/29186996/
5. www.dagensmedicin.se/specialistomraden/allmanmedicin/ny-policy-for-priser-vid-sallsynt-sjukdom/