 Hi everyone, my name is Kate Morgan and I'm co-chief executive here at Milo Moe Patience Europe. Welcome to our webinar today on the basics of medicines pricing in Europe. And this is being held as part of the Horizon Europe Acetane, which I'll tell you a wee bit about in the next few slides. Just to go through the agenda for today. So I'm just going to talk you through some quite boring housekeeping rules. And then I'll hand over to our fantastic speaker today who is Sabina Vogler from the Austrian National Public Health Institute. He'll talk us through the basics of drug pricing in Europe. We'll then have half an hour moderated Q&A and we'll close the webinar at half past four. Just to go through the housekeeping rules. I know everybody knows these, but we just need to do it at the start to make sure everyone's on the same page. So you should be able to see and hear the presenters, but you unfortunately won't be able to see the other participants. So we'll be holding a Q&A at the end of the session, but feel free to post any questions that you want answering in the Q&A function, which you can see along the bottom of the toolbar in Zoom. If you like any of the questions, I would like to see them upvoted, select like. And that will just signal to me that it's a particularly important and relevant question. And I'll make sure I'll ask it on your behalf. As I said, we'll be saving the Q&A until after the presentation. And unfortunately, I'll be asking the questions on your behalf, but you won't be able to ask it directly. You can also use the chat window again at the bottom of the Zoom bar to chat with other participants to share your experiences and also to make any comments that you might have on the content. If you're facing any technical difficulties, please let us know in the chat and a colleague from the MP team will be able to support you and hopefully reach out to you and fix the problem. And this webinar is being recorded and will be available on the MP website and social media channels after the webinar is finished. And you'll also be able to see it on the Acetane website and communications channels as well. Just to tell you a little bit about Horizon Europe Acetane, which this webinar is being held as part of. Acetane is a four-year project consortium led by Erasmus University Health Policy Department. And it has around nine consortium partners from across academia and also from the clinical and patient community. And we're aiming to develop new models of pricing and value assessment underpinned by three core case studies looking at personalized medicines, CAR-T in cell and gene therapy, and also medical devices. And the aim at the end is to create policy tools to promote access to medicines for patients no matter where they live in Europe. This webinar, as I said, it's being held as part of Horizon Europe Acetane. And throughout the project, MP is providing the patient perspective. And we really want to create a series of educational tools and materials that help demystify some of the more complex areas of pricing reimbursement and also health economics. The webinar today is primarily designed for patient advocates, but I know we have a range of participants from across the clinical and pharmaceutical environment. So feel free to participate in discussions. We really want to demystify drug pricing. We're starting with the basics of drug pricing today because it's a really important part of the way drugs are made available in Europe and can determine whether or not a drug is or is not accessible. And I think as a patient advocate, it's really important to know what the key responsibilities are for drug pricing and also how it ties into other parts of reimbursement and HDA decision making. And I think sometimes it can be quite difficult to understand who is responsible for decision making and how the decision on a new medicine and whether it's available is made. So hopefully we can demystify some of those misperceptions today and also enable participation in informed discussions on drug pricing. So without further ado, I'll hand over to our speaker for today who, as I said before, is Sabina Vogler. Sabina is head of the Pharmacoeconomics Department at the Austrian National Public Health Institute. And she's also director of the WHO Collaboration Centre for Pharmaceutical Pricing and Reinvestment Policies. Sabina has over 25 years of experience working on a pharmaceutical policy and in health economics, so she's really well placed to be speaking to us today about this important topic. And thanks very much for joining us today, Sabina, over to you. Thank you and thank you for inviting me. Good afternoon everyone. And it's really a pleasure to present here some of the basics of medicines pricing, but you will see maybe we will leave also the ground of basis and really dig into the area. I'm swelled to see that so many people are online. So thank you, Kate, for introducing myself to the next slide, please. It was already said that I am working at the Austrian National Public Health Institute where I had the Pharmacoeconomics Department. Maybe just to explain, yeah, that's the right slide, to explain to you the Austrian National Public Health Institute is the Austrian Institute to support the policymakers. It's the Planning and Research Institute in Austria. And our role is to do research capacity building and support policymakers. And at the Department of Pharmacoeconomics and WTO Collaborating Center is located, as you can see here, the WTO Collaborating Center for Pharmaceutical and Pricing and Reimbusment Policies. I would just like to clarify, you see here the disclaimer. It's a collaborating center meaning that a work that we are doing at the Austrian National Public Health Institute supports WTO. I am not a WTO official. I'm speaking here as an expert working on Austria on Europe and also internationally and working to get closely with policymakers but also to specify I'm not a policymaker and also I'm not a negotiator, but I am doing research on that topic. Maybe just to give you the background on this. So I think it's not a surprise that medicines prices are a major topic. And I was wondering there's several examples of prices of how unaffordable medicines are. And I decided instead of bringing you examples of individual medicines to show you some data. This data is from the US. It might probably mainly be on Europe, but I think what is important to see here is that over the years the launch price, the price at which the medicine was brought on the market has increased. And this is something we really see with concern while we were talking about the most expensive medicine about more than 10, 12 years ago of half a million, then it was 1 million, 2 millions, and now we are talking about 3 million. So this is something of really of concern. And next slide, please. Another concern that we have is that the new medicines that appear to be very promising and particularly in the area of cancer medicines, but for some the benefits are not really shown clearly. So we do have uncertainty about the benefits. We do have lack of evidence. I just brought here some studies and you can see the quotes here. And this is of concern from a patient perspective, but also when we talk about prices where we need to find some criteria on some basis to decide which price is justified. This is really of concern. And you see here in the middle that there was one quote in one study that some of the new medicines are neither affordable nor clinical beneficial in comparison of other treatments. The non-affordability means that I will go more in detail now, means that this is that patients do not have access to medicines. And this brings me to an overview of what I will be talking within the next 45 minutes. Next slide, please. So my talk will be more or less clustered into three parts, and I know it's quite rich, so you will get a lot of information. Maybe we will skip some of the parts for the discussion, but two really key parts are I want to talk you through and present some of the key concepts that are there to, as said, as the webinar is called, the basics of medicine pricing to show you what is so special about medicines, what has to be considered by regulated by policy makers, what are the challenges and who plays which role in the pharmaceutical system and with regard to pricing. So that's the first part. The second one is looking at pricing policies for medicines, what are key policies, how can policy makers set the price of the medicine, which are the key policies that are commonly used in Europe. And finally, and we can also then dig deeper in the discussion, looking at some current initiatives to find ways to address potential unaffordability of medicines, address high prices, what can be done. I have to say this talk is particularly focused on new medicines with high price tags, and also from a European perspective. Next slide please. So what is special about medicines? First of all, medicines are products with specific safety and quality requirements, which also means that the regulators need to ensure that the safety and quality requirements are met. To do so, there is a vast body of revelation for different parts for, for instance, clinical trials, what has to be ensured that clinical trials are safe. With regard to marketing authorization, ensuring that only safe, effective and good quality medicines are allowed to be brought on a market, with regard to distribution and production, good production practice and distribution practice, but also with regard to regulation, with regard to health professionals, who is allowed to prescribe to dispense medicines, what has to be taken into consideration. So this is about regulation. And I really want to pick in particular on the marketing authorization. So next slide please. So as I've said, marketing authorization is a regulatory act which the regulator takes to make sure that the medicine that will be then brought on a market is safe, is effective and of good quality. And if this is proven, then it's allowed that the medicine can be brought on a market. When we talk about marketing authorization, we do not talk about the price. We do not talk about whether or not the medicine will be included into public funding into reimbursement. We do not talk about an added therapeutic value over a comparator. It's just the regulatory part, which is the first level. This is about regulation and marketing authorization is a key regulatory issue. Next slide please. But in addition, we also need to make sure that the medicines are accessible to the patients. It's no use if we have the best safe medicine and it's somewhere on the shelf or cannot be brought to the patients who need them. And this is the responsibility of policy makers. And it's up to them to develop policies that the medicine becomes accessible for the patients. And when I say and you heard me now using the term patient access quite often, there are different components of the patient access. Next slide. And two key components are availability and affordability. In the literature, there are sometimes some other components like acceptability. But we now focus on these two components because they are really key and only if both components are met, then we can talk about patient access. And I use the term patient access because it means that the patient can use it. The more business administration term of market access. Well, it's not so important that it's of course important that the medicine is on the market, but it's not sufficient because it must reach the patient. So the one part is availability. And it means that the medicine must be present at distribution points like a community pharmacy in a certain area for the people who need them. So possible limitations of availability are for instance, medicine shortages. All that a medicine is withdrawn because for quality issues or for some other issues, availability ability can also be limited for instance, if someone is in a remote area and the distance to, for instance, a pharmacy is quite far. So this is availability. And the other component is, and I'm sure you are all aware about that, is affordability. And affordability is defined as the decree to which the medicine is obtainable to the people who need the medicine. And now it comes at a price, either they, the patients, or the health systems can afford, can pay. So this very general definition takes into consideration that it might either be within a solidarity based health systems that the public health system pays like it's in the case for medicines with high price tax, or that patients pay either in the form of a copayment or fully. And if you think, for instance, of some countries globally where cancer medicines have to be paid out of pocket, this is something to be considered. So key message, patient access depends on availability as well as on affordability. Next slide. So how can policy makers now ensure that medicines are affordable? They can do so via policies and key policies to ensure affordability are pricing policies on which I will now focus in my talk, as well as funding policies. So whether or not the medicine and to which extent it will be reimbursed by public funds. And I would just like to remind you of the Sustainable Development Goals, where under the goal number three on health and wealth being there is a target, the target 3.8, which says to achieve universal health coverage, including financial risk protections, access to quality essential health care services, and access to safe, effective quality, and affordable essential medicines and vaccines for all. So we have here the responsibility for governments already in there to ensure this access to medicines. You see here the parts on regulatory issues, safe, effective and quality, but you also see here the term of affordable. You might wonder what's about essential medicine. This means that it's up to the policy makers to then define and decide with regard to certain criteria which medicines are essential. So it's not that governments need to pay and fund everything, but to have clear criteria for that, and that's strongly linked to the funding policies. Next slide please. I said that pricing and reimbursement policies are important ways to ensure affordability of a medicine. And I would like to make clear that these policies are part of the pharmaceutical value chain and they are well embedded and they come off the marketing authorization. So one way to frame, to present the way the value chain of medicine is to distinguish between pre-launch, pre-launch and post-launch phases. The pre-launch phase is before the marketing authorization. So here there is the research and development of the medicine, patenting issues, market manufacturing may start and the company will prepare the dossier for marketing authorization. Then when the marketing authorization has been received, it normally does not mean that the medicine will be brought on the market. It's allowed from a regulatory perspective, but now the affordability and the policy issues come into play. Here normally as there's also an interest of companies that the medicine is included into public funding, then there is this process of pricing and reimbursement. What do we mean by pricing and reimbursement? Pricing means that the governmental authority sets the price or indirectly sets the price and there are different ways to do so and we will look into that later. So remember, it's the government setting the price and reimbursement means that the public payer is taking coverage, covers the costs of a medicine that has been decided to be included into public funding. And this is a decision for each medicine and it takes a certain time and usually for most medicines, in particular for those high-cost medicines we are now talking about, this has to be first decided before then the company will bring the medicine on the market. And then when there's market entry, then we talk about the post-launch phase and there are certain elements than the doctors prescribed, the pharmacists dispense, there's pharmacological vigilance, so there might be also some regulatory issues. I now talked about the policies, but when policymakers set certain policies, like the pricing policies, they have to consider the different policy objectives. Next slide please. So, looking at medicines, what are policy objectives that policymakers may aim to achieve? What you see here is a triangle and in a process that was nearly 20 years ago, it was a multi-stakeholder process at EU level. For example, it was then kind of decided or committed that for medicines that are publicly funded, policymakers aim to consider at least these three objectives. When they set the price and decide on reimbursement, namely to ensure that patients have a timely and equitable access to medicines, so the patient perspective, your perspective. But also that pharmaceutical expenditure is controlled and that pharmaceutical industry is rewarded for innovation. Could you please click? You might say, well, that's not complete. Well, that was the kind of a commitment, but of course there might be other objectives to be considered. Like in the off-patent market that you say we want to encourage competition with regard to high prices to say fair prices and of course fair prices is a challenging discussion fair from which perspective. Or with regard to the sustainability aspect, it's not just only financial sustainability, but in recent times also thinking about environmental sustainability. So please click. What we see here is, well, when policymakers take their decisions, their policy objectives may be of course conflicting and they have to find a trade-off between them. And as you can also see here, if you just look at the three parts in green, blue, they kind of stand for different stakeholders for the patients, the expenditure controlled public payers and industry. And there are different stakeholders. They all have their role, but they have different expectations and policymakers need to manage these expectations and then also decide which policy objectives they want to prioritize and how to have this mix. So, next slide please. Who are these key stakeholders? And I just listed some of them. It's always difficult to find, to simplify it. It's of course simplified. But I put in the middle the patients. Patients who need medication, who need care. Then we have different stakeholders in the public sector as well as in the private sector. I acknowledge that some of the stakeholders might either be situated in the public sector or in the private sector, also depending on the healthcare system. And they have different roles and responsibilities and also different objectives. This always has to be considered when analyzing and trying to understand pricing system. So, for the public sector, we have the governments at central regional local level who are the legislator but may also take some of the roles like below, for instance, local governments may be also procures. And we have the regulator, the marketing authorization agency, usually a medicines agency, the one deciding whether medicine is safe, effective and of good quality. Then we may have an HDA body, an agency or embedded in some of the other institutions. And a body that brings together the evidence as basis for decision making. I will come to HDA later. Then we have a pricing authority setting the price. We have different reimbursement authority deciding whether medicine be publicly funded or not and to which extent. And we have the public payers or sometimes suit party payers that reimburse and cover the costs. We have in the public sector hospitals that provide care, healthcare professionals, some countries have public doctors like in an NHS system, hospital pharmacists at the universities. That's the public sector. And then we have the private sector. And here typically pharmaceutical companies are in the private sector, wholesale companies, community pharmacists are usually private pharmacists with a contract with the public payers, drug stores. Private doctors, private hospitals. We should also think about financial investors because they can have an impact or have an impact on how pharmaceutical companies act while the civil society and media. And as I've said, they have different roles. And with regards to pricing, I'll now try to explain why simplified and at the same time might be now getting a little bit difficult because next click please. Because I, yes, thank you. I really tried to simplify it just to make the point. Well, in the middle, it's the patients and the patients are affected by price setting. Also, the pharmaceutical companies, the wholesale companies, pharmacists, doctors, they are also affected by the price set by those who set the price. So looking at who sets the price, it's normally the pricing authority who sets the price. In some countries, it's an authority that whether it's pricing and reimbursement, so they also may set the price. So my point, and I will stress it then again, is it's up to the governments normally to set the price unless they say in certain situations they leave it to others or they do not do price setting. But of course, it's a question of balance of power. And if you go for a price negotiation, then the one at the other side of the table will also have an impact. So that's why I did this price setting read also a little bit with a former companies. They are not the price set, but they can, of course, if they have strong negotiating power, impact how the price will look like. And I have here on the left side affected by price setting. Well, public hospitals, procurers, they might also be affected because there might be a formerly negotiated price, maximum price, and they will work with that on. So next slide to kind of summarize the responsibilities of the actors work with regards to pricing. In principle, it's that the government authorities are responsible for setting the prices through pricing policies, unless they say no for certain medicines we do not set the price, or we leave it to certain actors in the supply chain that they do it. On the other hand, and I see there's something missing. So maybe click once again. No, okay, go back. There should be some text in there. It's not there. There should be the text that the suppliers are in charge have, of course, some strategic thinking about which price they will have. So, this is not pricing policies because price setting the policies is up to the government. But they are, they can, they think about what can the price be the price that they want to achieve. And this is what I do not call pricing policies but pricing strategies. And in my talk, I will really focus on the policies from the policy perspective. So you cannot, of course, some companies have their strategies, but it's not up to me to comment on that. And for me, it's really important to make a distinction. I put also here the suppliers in the supply chain because it's not just one price, the price changes in the supply chain. There's one price by the former company, but then when the medicine is delivered to a pharmacy, then there's a markup for the wholesaler. So you have done a wholesale price and then you have the community pharmacy. So what do we mean by price? Next slide please. Simply speaking, it's the amount paid by the payer. So of pharmaceutical expenditure, there's a value component. And for price comparisons, you have really to be very careful, which price you take because you have a price, you can have the price per pack and a different pack sizes across countries. You have price per unit. You can also say for a treatment course. So that's one way. And on the other hand, that different prices. And I just brought some examples. For instance, you could differentiate between price per payer. So there's a procurement price. There's a reimbursement price. So even if there's some official price, and then it's split up between the patient pays some co-payments and the public payer. Public payer will be mainly interested in the part here, the payer pays. So the reimbursement price. You can say there's a hospital price or consumer price. As explained on the previous slide, there is the different price types in the supply chain. So expectory manufacturer price, wholesale price, pharmacy retail price, and, and we will come to that a little bit later, the price per publication type I put it. So we have the official list price, but there are also confidential prices in certain cases. And something which has to be also considered next slide please is pricing and reimbursement is a natural competence in the EU. So the marketing authorization is harmonized, but it's then each member state who decides then on a price of the medicine and whether or not to include it into reimbursement. And I put here the national because normally it's a national price, meaning that when the price is regulated, it's the same across the country. We have from non-regulated countries the situation that prices may differ across countries. The only EU regulation that is with regard to pricing and reimbursement of relevance is the so-called transparency directive. And it says that when the member states decide on pricing reimbursement, they have to do consider certain timelines. So to take the pricing decision within a certain time, 90 days for pricing decision, 90 days for reimbursement decision or 180 days in general. They have to align with certain criteria which must be sound and transparent and the price must be published. I have to say this directive is from the late 1988 and it's published and it was not said which price type was published. So at that time, all these confidential prices which we see now in this negotiation, nobody thought about them. So this directive is very general. It's generally called transparency directive. It's an EU directive and please do not mix it up with the transparency resolution from 2019 of the World Health Assembly. So as next slide, as prices are set by individual countries, they vary across countries. So we have quite some differences across the countries. You see it here for some cancer medicines where we did a survey and I have to say the price data here are already rated by purchasing power parities. And still you see here on the one hand quite a variation across the countries. And at the same time, it's not necessarily that those countries were of lower income necessarily pay lower prices. But here you see some countries in Eastern Europe pay quite high prices. I now move on on the next slide talking about pricing policies and price regulation. So I said it's the responsibility of government authorities to set the price and that's called price control or price regulation. But it can be decided that the government doesn't take this responsibility and leaves it to the company that they set, that they determine the price and that's the price how it is and that's called free pricing. Could you kind of click? If there is price control, there are three ways in general from a legislative point of view how to do it. Either statutory pricing, meaning the price is set on the basis of a law or an enactment, price negotiations where you see here there are the two parties, the authority and the company. And yeah, so bargaining power, purchasing power plays a major role. All through public procurement or tendering where you have a formal procurement procedure and ask for bids. Next slide please. And how is the situation in Europe? And we are now looking at the expected prices. What you see here is that most countries have price regulation for so-called reimbursable medicines. Reimbursable medicines are those that are funded by the public barrier. And the thinking is, well, we pay for them, so we also need to determine them. There is the situation in some countries that say we have price control for all medicines, even for those that are fully paid by the patients. The rationale for that is we want to ensure that even if it's not publicly funded, the patients pay for them. We have some control of that. Some countries have a situation where it's for prescription-only medicines where there's price control and I have to say usually prescription-only medicines are reimbursable medicines, more or less. There are two countries with a very specific situation. One is Germany, where it used to be one year now, it's six months, where there is free pricing in the first year. And so the company can set the Germans the price and the public payers pay the price. Only there is some price, some HDA and price negotiation, but only the determined price comes into play after six months. So, yeah, a very specific situation. In the country where I am from in Austria, there is also some specific situation that we have kind of free pricing, not only for non-reversal medicines, but also for inpatient medicines. And when you click on the next slide, you see kind of the impact of that. So here there's a price study, which we do on a regular basis. And for medicines in the outpatient sector, so where there is price regulation, Austrian prices are in the upper middle, above the average, not surprising. We are an affluent country. But for the hospital sector, where there is no price regulation, often you see that the red dots, the Austrian prices are the highest. And it confirms quite clearly that price, non-price regulation may lead to higher prices. And it's really kind of a call for policy makers to do price regulation. Next slide. So just to make the point, who pays for the medicines? It's the state and the patients. And for the high-cost medicines, click one again. It means that a medicine becomes unaffordable and that was also said by in Norway. And next slide. How to ensure the affordability of medicines? Well, I made the point, it's important to do price regulation, but also to find the most appropriate policy. And I will now present to you some key national policies. And the idea is also, which is the criterion to decide which price is justified. And just want to make clear there are different pricing policies in the country. And the policy makers may decide for these types of medicines we want to have. This policy and for another policy. Also because each policy has its limitations and benefits. You might have heard about the policy of external price referencing. This is that the prices of medicines in other countries are taken into consideration. And based on a defined algorithm, the prices then set. The prices of similar medicines in the same country could also be taken into consideration. That's internal price referencing. And I have it in grade because we will not look into it in further detail because it's more for the off patent medicines. If the added therapeutic value is taken into consideration, then we talk about value-based pricing or some pricing that is based on values with using an HDA. Let's see if we have time. Production costs are normally not taken into consideration in Europe. That would be cost plus. Tendering again is a policy more for the off patent market. And what is really playing a major role with regard to high priced medicines is to have some conditionality. So either have some defined health outcomes or some certain conditions where we have conditional pricing and then some managed entry agreements. And now I would walk you through some of the policies, but I see that we are already quite in time. So I would just like to consult with Kate. Do I have a little bit more time or shall I stop here and take some questions and continue then? Or how would you like to have it? I think you have 10 more minutes of presentation time, so you've got enough time. Okay, then 10 minutes can be well used maybe to present you some of the policies. Yeah, so the first policy I want to share with you is external price referencing. As said, it's a policy where the prices of a medicine in other countries are taken into consideration. And it's a policy that is used the factor in all EU countries except for Sweden. And as a non-EU country, UK doesn't use it as well. It's a policy as you will then hear that is used, but sometimes used as a supplementary way. So other policies then come on top of that. And it's really a policy where the methodology makes a major impact because you can then design it differently. Which countries do I take into the basket? How do I determine the reference price taking only the lowest countries, lowest price country or some average? How do I deal with the fact that prices are not available for some countries? Medicine is not marketed. How do I deal with exchange rates and so on? Next slide. So here you see findings of a study that showed that the methodology has a major impact in external price referencing. And as said, each policy has pros and cons. But for external price referencing, it really makes a difference how you design the methodology. And for instance, what you see here is when you look at the country basket, it's not necessarily that when you put many, many countries in the basket, which is a lot of much more work, that the prices will be lower. It's more important to have a strategic basket. What you also see here is when you consider the discounts of prices in other countries, that this makes an impact. But of course, confidential discounts are quite difficult to assess. This was a simulation, so with some assumption. External price referencing, next slide please, has some disadvantages. And one is it has spillover effects on other countries, meaning that it incentivizes the companies to have a strategic launch. So they will start with launching the medicine in a country that typically offers a high price. So Germany frequently is the first launch country. Austria is often quite second or suit. And really designing the pricing strategy, the policy, thinking about how to have this cascade on where to launch. Which means that in Mediterranean countries and in particular in Eastern European countries, the same medicine may come on the market two or three years later after it was brought on the market in Germany. So again, you see here having a European marketing authorization does not guarantee that the medicine will be then actually being launched. Here just to simplify that we looked it up for a few medicines. And it was then shown, you see here that launch after six months was only in very few countries. And sometimes it took up to 36 months or 60 months till the medicine was really done launched in several countries of the EU. So this is external price referencing. Then we come to a pricing policy which is called value-based pricing. Next slide. And to be quite honest, it's something we are all struggling with to find a good definition for years. So we can have a simple definition saying that the pricing authority when it sets the price of the medicine, it considers the added therapeutic value, why added in comparison to some other medicine. And how is this done with the help of some evaluation in particular of the so-called health technology assessment. And in European countries for the high priced medicines, cancer medicines we are talking about, this is used again as an element in many countries. So to have a consideration of the value assessment. But it's not the only criterion and the only policy. As I've said, for one medicine there might be different policies. It's only Sweden, which if you remember doesn't have external price referencing, has really a full-fledged value-based pricing system. When an integrated decision process on pricing and reimbursement, the value is taken into consideration. What do I mean by HDA? Next slide, please. HDA is defined as a process that uses explicit methods to determine the value of a medicine or some other health technology. And what is important to understand, it's not a policy per se, but it's a method to inform the policy makers and the decision makers. So with an HDA you will not set a price, but you will provide the evidence to the decision makers. HDA has two components. One is the assessment, which is the collection of the scientific evidence in different areas, like the clinical effectiveness, safety, but there are also some other domains. The other part is the appraisal part, which is you have this evidence collected and then it needs to be considered into the health system, so it has to be appraised. So an HDA process has to consider both parts. Coming back to value-based pricing, next slide. We do have an issue, and you remember what I said at the very beginning, about low or limited evidence about some of the medicines, also medicines that have not really shown added therapeutic value, and here you have the findings from a study with which that they didn't find a significant association between the cost, the price, and the clinical benefit. So something really, I think, in particular for you to consider, how does this link. Click twice. So I go over here. I would just like to come to the managed entry agreements. So managed entry agreements is an arrangement between a pharma company and the payer to allow access to medicine or reimbursement under certain conditions. There are different types of managed entry agreements. Financial-based managed entry agreements like a flat discount or a price-volume agreement or some capping, those capping or, and that's maybe the one you're more familiar with and heard about, the so-called performance-based managed entry agreements or outcome-based where a certain positive outcome has to be reached to ensure continuation of the funding. And what usually managed entry agreements have in practice is confidentiality. For some countries you do not even know which medicines are covered by a managed entry agreement. Others you know the medicines, but you do not know the type. Is it a volume-price-volume agreement or some outcome-based agreement? But what all meanwhile in Europe, in all European countries, meanwhile, all managed entry agreements have a so-called confidential price. So how does this work? And this is linked also to external price referencing. So you remember I said external price referencing is frequently used. And often it starts in the price setting that there is external price referencing. It's then determined based on that you have a benchmark price and click once. But this benchmark price is too high. It's not affordable. So the government authority, the payer will sit together with the company and negotiate. And some conditions and part of the agreement is that they will negotiate confidential discount. And the discounted price is the ones which is paid by the public payer. But in the registers, in the databases where medicines prices must be published, it's the list price which will be published. And for other countries, so you see how the spiral goes. For other countries who will then do external price referencing, they will also refer to the high list price, come to a price that they cannot afford and also will do managed entry agreements. The question is, and it started around 2010, some countries earlier, some later. And it was the idea of the authorities that this may help to bring access to the patients. But it led to a system where the payers are kind of blindfolded because they do not know the real prices. And if you go on the next slide, the question is, well, does do managed entry agreements had an impact on improving patient access? And the difficulty is we as researchers, we cannot really provide an answer because everything is confidential. You cannot do studies. You will not receive the price, the confidential price data. I gave here an example from the Belgium Public Health Institute who wanted to do a study on that but had to stop it due to threat of legal action. And given these difficulties, it's really hard to assess whether or not managed entry agreements have led to improved patient access. My comment is we still see that patient access, affordable patient access in many countries is not there. So probably this instrument did not really work. Next slide. One might argue when you do a performance-based managed entry agreement, at least it helps to collect data, real-world data, which you need then, which are really helpful. But we have seen, it's a lot of administrative work also for the doctors. And we have seen that often the data are not really collected. And what do you then do if the data are not that good? Then you tell the patients, sorry, did not work. And I brought here a study from the Netherlands where it was then said that the data could not really be collected. So this hope that managed entry agreements can help to collect the data wasn't totally fulfilled. And with regards to the list prices, next slide please. There is the problem that the officially published list prices, not surprisingly, will go up because the discount that is granted has of course to be accounted in somewhere. So this was also shown in a empirical study. And I would now like, on the next slide, I had an introductory slide on Water Current Discussion Solutions Initiatives, which I will now skip and would go to the slide with my conclusions. Yes, to summarize. So patient access depends on different components, but one is affordability and the price plays an important role whether or not a medicine is affordable. Policymakers, and I think I made this point, they are responsible for developing and implementing the pricing policies and because it's their responsibility to ensure patient access to the medicines which the patients need. You may think that was quite harsh maybe with policymakers. So here there is some kind of a statement saying because what is reality? Reality, we all know that governmental authorities are often understaffed and they make the resources and the capacity to do certain policies. Certain policies really need a lot of knowledge, resources, and then governments have to struggle with limited budgets. Medicines cannot be paid at any price. So there is this trade-off. We do have a situation that data are missing, clinical effectiveness data, but of course price data, the confidential prices. But how can you as a policymaker take informed evidence-based decisions if it's not, if you like information? That's a part I did not touch upon by now, but when looking at the solutions, it's in any case important to have a coordination and a collaboration both within the country, for instance currently the marketing authorization body, the medicines agency work a little bit distinct from what the pricing authority do. And here better collaboration would be good and of course also even if pricing reimbursement is a national competence across countries and there are some positive examples. But when it comes to medicines with extreme high price tax and we know all the discussion, it's probably nothing which a single country can solve. So there is the need for more European or even global solutions and it's something where also it's a responsibility of the policy makers but where the input of all stakeholders is needed and particularly also the patient perspectives is needed. So I'll stop here and happy to take questions. Thank you Sabina for a really comprehensive and interesting presentation covering everything from roles and responsibilities through to policy and access. I just wanted to kick start the Q&A section by reminding people that they could post any questions that they have in the Q&A function at the bottom of the screen. The first question I had relates to your last point about collaboration and I think from a patient advocacy perspective it can be quite difficult to know how we can get involved in pricing policy and in discussions around pricing and access. I was just wondering from your perspective where do you think patient advocates can and should get involved and where can we have the biggest impact in discussions around pricing both at European but most importantly at a national level? I think where patients can really make a difference is that on specific meds since they are the experts what we currently have is that and I would say here there is also a lot of learning with governmental authorities so you also have to bear with them to find some processes that patients and particularly on specific patients with knowledge on specific diseases are brought into HDA processes and depending on how the system is set up might also be on pricing and reimbursement processes and it doesn't mean as that it's the policy makers and they have to take the final decision so I do not see patients maybe involved in really the decision with votes but bringing in their knowledge and I really see it in HDA processes I'm here a little bit struggling and reluctant because I know that HDA in the countries is as I've said there are different capacities across Europe and some countries have very strong HDA processes and they also have patients involved while other countries do not have a really an appraisal process so they need more to build that up while other stakeholders would need to be involved but as HDA is gaining ground I would say here I would in particular see the role of the patients the other thing is it's maybe less on policy making I really appreciate that we have this webinar now because I think I understand the claims of patients that they want access to their medicines at the same time I fully also understand why governments are struggling and if there is an informed dialogue or more of an informed dialogue between the payers for instance and the patients I think that could and also in public discussion where for instance patients then say yes I need the medicines but I also can understand why the payer says well up to that price yes but more it's not possible I think that could also be helpful Great thank you so I'll just move into audience questions now and we have quite a lot of them which is really good the first question I wanted to ask was around R&D costs and a participant has asked what is the relationship between R&D costs and drug prices and how can we incentivize innovative research without negatively impacting on price and a related question was around I think in some countries it seems like industry do set the prices for their medicines at least the initial price and I just wanted to get some reflections around that as well Yeah R&D costs to be quite honest that's one of the areas where we also like information so we do not really have a full picture of R&D costs and that is the claim of industry that the high prices are needed to reward R&D which of course I can understand and to a certain part it's clear but what is fully forgotten is that payers may risk to pay twice because the fundamental research is often done in public universities so there is already public funding in there and what would be now needed under is a better picture on the real R&D costs who paid what I'm aware that the industry responds to that normally by saying it's so difficult to do it for individual medicine because there might be failures a lot but still it can be done but it's again a question of transparency on the other hand and that was I had no time to talk about the World Health Assembly Resolution of 2019 where member states committed the fact of nearly all member states three countries abstained from that but nearly all countries of the world committed to find ways to publish the net prices and also R&D costs and so I think one thing is to have a dialogue with industry another thing is and here there's maybe the homework also for governments the funding for universities is not with the health sector it's usually with science and education and the different governmental bodies also would need to maybe collaborate more and here because to have this knowledge and to have this maybe better published Great thank you I think transparency is a really relevant topic for the whole patient community it's one that we grapple with so I think your slides and presentation really went into detail about that and was really useful and the next questions that I had were around the role of the EU in pricing and firstly do you think that the EU should have more involvement in pricing discussions in setting a price and also someone is asking around the current impact of UNETA and the potential impact of the EU HDA regulation on improving price negotiations on a pan-European level do you have any reflections on those questions? Well I am and here I'm speaking from my perspective as an expert I'm very much in favour of improved collaboration and this also means cross-country collaboration where we have some examples by now at the level of some of the countries knowing that this is not an easy process requires a lot of resources and capacity but still and maybe something which may not be successful in the very beginning but may fail in the first one but it really increases the purchasing power of the buyers and also understand we are buyers so we are not just the price taker but we are involved in that if at an EU level the EU so now having says and it wouldn't be the EU saying the commission but it would be the member states giving the mandate to them that could really make a change and we have seen what has happened with the COVID vaccines yes we could discuss things that did not work that well but on the other hand in this difficult times I mean it worked that the EU member states said please negotiate and we have then ensured that all EU member states had their share of the vaccines which would have been unthinkable a few years earlier so of course it would be challenging from an organisation legal point of view but it could really make a difference and the question is would the member states agree to that or do you need the agreement of all I'm quite sure that I could imagine which member states would agree so low income countries or smaller countries would benefit from that but the question is do you need the agreement of all so I do not see it near future but you know to encourage we have seen so many surprises so you never know and coming to the health technology regulation I think it also shows that we are at least on a way to collaborate more in Europe it's kind of a puzzle, one part of the puzzle and I think the impact it may have is after having solved the difficulties that we will face in implementation it could and I think it will be done to prove that collaboration works and then you could think from collaboration in HD maybe moving to another area great thank you I agree collaboration is important we have seen many advances since the Covid-19 pandemic a related question to international collaboration is related to Beneluxa in similar collaboration across Europe and the question relates to whether you have seen any impact from these collaborations on current pricing and also what could be the impact in the future I think the impact is that it gives a proof of concept that collaboration works and that we had the discussion five years ago it will never work and now we can say we have some good practice examples so it doesn't have now the direct impact on the prices in other countries but it shows that it works it gave an appetite and as you mentioned Beneluxa and it's not just what would be important for me to stress it's not just the joint negotiations maybe that's it's clear that everyone is looking at what's the outcome of the negotiation of course because everyone is interested did it work for that medicine but the collaboration is much more than just the negotiation is that countries have thoughts about how they want to maybe change the pricing system exchange about practices really exchanges on policies which are not exchanges on confidential issues but just to know how other countries do it and you mentioned Beneluxa and one could argue that the international horizons scanning initiative is kind of a spin off of Beneluxa I mean it's Beneluxa countries supporting IC this horizons scanning and some other countries and I think that also shows when countries work together they have then some ideas how to develop new tools and yes IC is new and needs to start to work but this idea of working together because here you need really a lot of resources to have then a database to look into the pipeline what is coming is something which I find very supportive and it's also in this around this term of preparedness now we have learned a lot about preparedness but also with the high priced medicines we need to know what comes so that given the limited budgets the policy makers can and decide okay I can go for this or that but also knowing if there is a high priced medicine and then some similar alternatives are also in the pipeline then you go into a negotiation with a different knowledge than when you're confronted with a purely purely monopoly product where you think you have to wait for a long time for an alternative. Great, thank you very much for a comprehensive answer again on the theme of international processes and collaborations and impact we've had a couple of questions around the impact of the US drug pricing process where it isn't as regulated as it is in Europe what impact does that have on the EU in prices across the EU and how can we minimize that impact yeah I have the feeling that the EU is a very closed area and as the EU is or the EU member states are very advanced in their pricing policies it's when we talk about the high priced medicines not talking about the generic market but when we talk about the high priced medicines well of course one looks at what is going on across the ocean but it doesn't really have with prices an impact because we say okay they now start for a few medicines that they now have the price regulation so with regards to pricing I wouldn't say that there is an impact. Thank you just moving into a completely different topic now we've had a couple of questions around rare diseases and why are drugs for rare diseases more expensive than in more common conditions and should there be different assessment processes for rare diseases and medicines that address them? Yeah I think this has to do with the value based approach that saying for certain rare diseases we consider quite a high value the question is do these medicines have this value that it is justified in price and I would also it also has a little bit to do with the fact that of course there is an interest to have development of medicines in rare diseases so we have at the regulatory level all these incentives 20 years ago and there is this feeling okay when you go into rare diseases this is supported and you get high prices what we also see is that currently there is an organization so that very small medicines are developed for really very small groups of patients and to really individualize and to use this as an argument to charge high prices and I think here you really need to look very closely where is the benefit for the patients and of course patients need to have these medicines and where are there maybe some business strategies which needs to be responded to appropriately Great thank you and we only have five minutes left so I think we can only take one more question before we close the webinar but we'll try and ensure that after the webinar we can answer some of the questions for you in writing but the last question I was going to ask from attendees was around indication based pricing and someone's asking whether you can have different prices across different indications of the same drug and is the drug more expensive and we're talking about different disease areas and how does it work across different diseases and within the same disease as well? Well there's a lot of discussion on indication based pricing some countries started with indication based pricing but here we also have to differentiate between the official pricing policies where often it's not indication based and when some countries really say we have a mixed price and what is then happening in price negotiations where then also managed entry agreements are concluded and here then a more indication based approach is taking into consideration. In any case indication based pricing and also what does this mean in implementation also then in following up when you're done needs to generate further real world data is a lot of discussion and some countries are moving more in that direction. Okay great well thank you so much Sabina for taking the time out of your day to answer all of our questions and to present such a thorough overview of drug pricing. As I said previously we've run out of time to ask all of the questions but I'll collate them and we can see if we can generate some answers in writing and this webinar forms part of a wider educational program that we have planned through Acetane and so any feedback that we have will go into driving topics for the next webinars and making sure that we answer all of the questions that arise from the patient community and I think the next webinar that we have planned is on the EUHTO regulation in May and we'll be thinking about more advanced topics around drug pricing but in terms of next steps please follow the MPE website and the Acetane website to keep on top of any developments in any educational materials that we have and so just to close the webinar again I'd like to thank you Sabine for joining us today in taking such a long time out of your day to explain pricing to us and thank you everyone for attending we really appreciate it.