Cost‐effectiveness and financial risks associated with immune checkpoint inhibitor therapy

Abstract

The reimbursement of immune checkpoint inhibitors is challenging. Funding these technologies involves the careful balance between awarding innovation and ensuring affordability as increases in drug spending compete directly with other health care and social expenditure. This narrative review examines the recommendations of 2 health technology assessment agencies—the Australian Pharmaceutical Benefits Advisory Committee and the British National Institute of Clinical Excellence—to determine the factors that contribute to the approval and rejection of immune checkpoint inhibitors as well as the use of manage entry schemes and risk management strategies to control expenditure. Reimbursement decisions from 6 immune checkpoint inhibitor drugs (ipilimumab, pembrolizumab, nivolumab, durvalumab, atezolizumab, avelumab) covering 10 different cancers were examined. The extrapolation of survival beyond the clinical trial and lack of head‐to‐head evidence are some of the main issues relating to cost effectiveness. Payers managed financial risks using different mechanisms such as risk share agreements and financial caps. This review of the reimbursement decisions and subsequent financial impact in Australia and the UK suggests budgets for immune checkpoint inhibitor therapy have been well managed so far. Through risk agreements and managed entry programmes, the example of immune checkpoint inhibitor therapies illustrates that industry and payers can effectively collaborate to ensure that innovative, but expensive, drugs can be made readily available to patients.

1. INTRODUCTION

The reimbursement of new high‐cost innovative medicines is particularly challenging. Costly to develop, funding these technologies involves the careful balance between awarding innovation and ensuring affordability as increases in drug spending compete directly with other health care and social expenditure.

The advent of immunotherapy drugs, such as immune checkpoint inhibitor (ICI) therapy, illustrates these issues. Marked as a paradigm shift in cancer treatment, ICI therapy offers the possibility of long‐term survival among cancer patients. ¹ Ipilimumab was the first ICI therapy to gain Food and Drug Administration and European Medicines Agency regulatory approval in 2011. ² Australia ³ and the UK ⁴ undertook the first reimbursement evaluations the same year with approvals for funding granted the following year. ⁵ , ⁶ However, the initial costs of these drugs have caused anxiety among health care providers, patients, payers and researchers, as countries have to balance affordability and timely access to these drugs. ⁷ , ⁸

To meet this challenge, reimbursement agencies have developed several approaches to ensure appropriate access whilst managing the financial risk to health care budgets. Health technology assessment (HTA) is now being used almost ubiquitously to assist health care providers and payers decide whether new therapies, such as ICI medicines represent good value for money. ⁸ HTA is the systematic evaluation of direct and indirect effects of health technology, ⁹ and the subfield of health economic modelling is an integrated part of decision analysis when assessing the cost effectiveness of these drugs. ¹⁰ This principle was first implemented in Australia in 1992 as a mandatory part of evaluations of pharmaceutical products by Pharmaceutical Benefits Advisory Committee (PBAC). The use of HTA has been broadened to include medical devices with the issue of the National Institute for Health and Care Excellence (NICE) guidelines in 2001 in the UK. ¹¹

As part of the HTA process, a variety of managed entry schemes have been developed to improve affordability. Outcome‐based schemes include schemes that require conditional treatment rules and coverage with evidence development. An example is avelumab for the treatment of Merkel cell carcinoma. The UK NICE approved avelumab for reimbursement under the condition that the sponsor report additional survival data as the initial data only consisted of a small number of patients with short follow‐up. ¹² , ¹³ Nonoutcome‐based schemes refer to price volume agreements, dosing caps, discounts and hypothecated budgets. A discount in the form of a rebate is common. ¹⁴ These are sometimes referred as special price arrangements in Australia. ¹⁵

This paper sought to examine the recommendations of 2 HTA agencies (PBAC and NICE) to determine the factors that contribute to the approval and rejection of ICIs. The paper also explores the use of managed entry schemes and risk management strategies to control expenditure.

2. METHODS

A narrative review was undertaken of all published funding decisions by the Australian PBAC and the NICE in the UK regarding ICIs. These HTA agencies were chosen because they were among the first to appraise ICI therapies. A search was conducted among public summary documents issued by the PBAC and technology appraisal guidance reports issued by NICE that involved ICIs in https://www.pbs.gov.au/pbs/industry/listing/elements/pbac-meetings/psd and https://www.nice.org.uk/guidance, respectively. Records from September 2009 (which was 12 months prior to the date of the first published phase III trial of an ICI agent) to 28 October 2019 were reviewed. Where available, listing and cost data were retrieved from government websites.

3. RESULTS

Six ICI drugs (ipilimumab, pembrolizumab, nivolumab, durvalumab, atezolizumab, avelumab) were found to have been considered for reimbursement. In total, 29 guidance documents have been issued by NICE across 9 different tumour types. Only 1 of the guidance documents did not recommend reimbursement ¹⁶ ; however, another ICI drug is available for that indication. ¹⁷ There were 46 public summary documents published by the PBAC covering 10 different cancers. Of the 46 PBAC reimbursement submissions 29 were rejections and the remaining 17 resulted in a recommendation to subsidise the drug on the Pharmaceutical Benefits Scheme (PBS: a programme of the Australian Government that provides subsidised prescription medicines; Table 1).

TABLE 1.

Immune checkpoint inhibitor drugs considered by British National Institute of Clinical Excellence (NICE) and Pharmaceutical Benefits Advisory Committee (PBAC)

Drug	NICE	PBAC
Ipilimumab	GBP 3750/50 mg 13	AUD 16 962.82/120 mg 18
• metastatic melanoma	• *Dec 2012, 6 *Jul 2014 14	• ^July 2011, 3 ^Mar 2012, 19 *Nov 2012 5
Pembrolizumab	GBP 1315/50 mg 20	AUD 9005.06/200 mg 18
• metastatic melanoma	• *Oct 2015 21 , 22	• *Mar 2015 23
• adjuvant melanoma	• *Dec 2018 24	• ^Nov 2018, 25 ^Jul 2019 26
• metastatic colorectal cancer	No assessment	• ^Mar 2019 27
• relapsed/refractory primary mediastinal large B‐cell lymphoma	No assessment	• ^Nov 2018 28
• relapsed/refractory classical Hodgkin's lymphoma	• *Sep 2018 29	• *Aug 2017 30
• squamous cell carcinoma of the head or neck	• *Apr 2018 17 , *Jun 2018 31	• ^Jul 2018 32
• metastatic urothelial cancer	No assessment	• ^Nov 2017, 33 *Jul 2018 34
• nonsmall cell lung cancer	• *Jan 2017, 35 *Jun 2017, 36 *Jul 2018, 20 *Jan 2019 37	• ^Nov 2016, 38 ^Mar 2017, 39 ^Nov 2017, 40 ^Mar 2018, 41 *Jul 2018 42
Pembrolizumab + chemotherapy
• nonsmall cell lung cancer	• *Sep 2019 43	• ^Nov 2018, 44 ^Jul 2019 45
Nivolumab	GBP 439/40 mg 13	AUD 10 053.46/480 mg 18
• metastatic melanoma	• *Feb 2016 46	• ^Jul 2015, 47 *Nov 2015 48
• nonsmall cell lung cancer	• *Nov 2017 49 , 50	• ^Mar 2016, 51 ^Nov 2016, 52 *Mar 2017 53
• renal cell carcinoma	• *Nov 2016 54	• ^Jul 2016, 55 ^Nov 2016, 56 *Mar 2017 57
• squamous cell carcinoma of the head or neck	• *Nov 2017 58	• ^Nov 2017, 59 *Mar 2018 60
• adjuvant melanoma	• *Jan 2019 61	• ^Jul 2018, 62 ^Mar 2019, 63 *Nov 2019 64
• relapsed/refractory classical Hodgkin's lymphoma	• *Jul 2017 65	No assessment
• metastatic urothelial cancer	• ^Jul 2018 16	No assessment
Durvalumab	GBP 592/120 mg 66	Not reimbursed in Australia
• nonsmall cell lung cancer	• *May 2019 66	• ^Nov 2018, 67 ^Jul 2019, 68 *Nov 2019 64
• metastatic urothelial cancer	No assessment	• ^Jul 2019 69
Nivolumab + ipilimumab
• nonsmall cell lung cancer	• *Jul 2016 13	• Nov 2015, 70 Mar 2017, 71 Jul 2018 72
• renal cell carcinoma	• *May 2019 73	• Jul 2018, 74 Nov 2018 75
Atezolizumab	GBP 3807.69/1200 mg 76	AUD 7561.36/1200 mg 18
• nonsmall cell lung cancer	• *May 2018 76	• *Nov 2017 77
• metastatic urothelial cancer	• *Jun 2018, 78 *Jul 2018 79	No assessment
• small cell lung cancer	No assessment	• ^Jul 2019, 80 *Nov 2019 64
Atezolizumab + bevacizumab
• nonsmall cell lung cancer	• *Jun 2019 81	• *Mar 2019 82
Avelumab	GBP 768/200 mg 12	AUD 8229.22/1200 mg 18
• metastatic Merkel cell carcinoma	• *Apr 2018 12	• *Jul 2018 83

^{^}: not recommended,

^*: recommended.

During this period, ICI drugs have also been considered in combination (such as nivolumab + ipilimumab), and in combination with other agents (such as pembrolizumab + chemotherapy and atezolizumab + bevacizumab). Most of the target tumours were stage IV metastatic disease, but more recent applications involved adjuvant therapy for stage III nonsmall cell lung cancer (NSCLC).

The first‐time rejection rate is 76.2% (see Figure 1). Most of the rejections in Australia were followed up with subsequent resubmissions. However, for 2 tumour types, namely metastatic colorectal cancer and relapsed/refractory primary mediastinal large B‐cell lymphoma, this has not occurred yet and as of Q1, 2020 no ICI drug is available for these indications in Australia.

FIGURE 1.

Proportion of first‐time rejections in Australia. ICI, immune checkpoint inhibitor

Australian public summary documents report whether or not reimbursement listing was recommended by the PBAC, while NICE technical appraisal guidance reports 1 of the following outcomes:

• do not recommend

• recommend only when the company provides the therapy in line with the commercial access agreement with NHS England ²¹

• recommend for use within the Cancer Drugs Fund only if the conditions in the managed access agreement for the therapy are followed ¹²

• recommend when the company provides the therapy with the discount agreed on in the patient access scheme. ¹³

It is important to note that all therapies were subject to special pricing arrangements in the form of either a rebate and/or a financial cap.

3.1. Factors relating to cost‐effectiveness

Ipilimumab was the first ICI to be considered for reimbursement by the PBAC (July 2011) ³ and NICE (December 2012) ⁶ for metastatic melanoma. The dosing regimen for ipilimumab is 4 infusions over a 9‐week period ⁸⁴ at a cost of approximate GBP 58 500. Both reimbursement agencies considered that the length of follow‐up in the pivotal clinical trial did not provide robust evidence of the overall survival gain beyond the length of the trial, therefore extrapolation of the clinical benefit was necessary in order to demonstrate cost effectiveness. However, the way the 2 agencies addressed the gap in evidence differed. After 2 further submissions ⁵ , ¹⁹ the PBAC mandated an outcome‐based risk share agreement to assess whether trial efficacy translated into real‐world effectiveness. ⁵ As part of the agreement, the PBAC reassessed ipilimumab in 2016 using real‐world data, which confirmed the initial estimate of cost‐effective. ⁸⁵ Similarly, NICE was unable to reliably quantify the long‐term survival benefit even after real‐world data in the form of register data from the USA was presented by the sponsor during the consultation of the evaluation to fill the data gap. NICE decided that a simple discount was to be applied to the list price of ipilimumab to make it cost‐effective, i.e. the price reduction mitigated the uncertainty in the estimated cost‐effectiveness.

The funding of ipilimumab in Australia is a good example of industry and Government working together, via a risk‐share agreement to allow early reimbursement as further evidence was collected. However, the sponsor may delay the reimbursement application and opt to wait for longer‐term data to be available. This was the case for second‐line treatment of renal cell carcinoma with nivolumab ⁵⁶ and for the combination treatment of nivolumab and ipilimumab in metastatic melanoma. ⁷²

Choice of extrapolation of survival data is a common source of uncertainty in cost‐effectiveness assessments of ICI drugs. ⁸⁶ For example, in guidance document TA519 when considering pembrolizumab, NICE found that using the Gompertz curve for extrapolation assumed that no patient could reside in the postprogressive health state after year 6. ¹⁷ This meant that patients could only move from preprogression to death, which is not in accord with real‐world observations.

Lack of head‐to‐head evidence is another common stumbling block for demonstrating cost‐effectiveness for ICI therapies. Pembrolizumab sought reimbursement for NSCLC in 2016 in Australia, but the PBAC concluded that the magnitude of the gain in effectiveness over pemetrexed was unclear due to the need to conduct an indirect comparison. ³⁷ Moreover, the PBAC did not find pembrolizumab cost‐effective in squamous cell carcinoma of the head and neck due to uncertainty related to the indirect comparison (in addition to low unmet clinical need). ³¹ By contrast, high unmet need was the driver behind pembrolizumab getting first‐time approval for metastatic melanoma despite the absence of head to head data. ²³

3.2. Managing financial risks

The approach to funding ICI therapies differs between Australia and England/Wales. ICI therapies in Australia are funded through a scheme called Efficient Funding of Chemotherapy (EFC)— Section 100 Arrangements which is a part of the Australian PBS. ⁸⁷ The total cost of the PBS is uncapped. ⁸⁸ The total costs for ICI therapies across all tumour types was approximately AUD 578 million (approx. GBP 306.5 million or USD 394.9 million) for the financial year ending June 2019 (see Figure 2).

FIGURE 2.

Cost of immune checkpoint inhibitor (ICI) therapies and total cost of the Pharmaceutical Benefits Scheme (PBS) in Australia ⁸⁹ , ⁹⁰ , ⁹¹ , ⁹² , ⁹³ , ⁹⁴

The total expenditure of the Australian PBS was AUD 11.8 billion for the financial year ending in June 2019. ⁹⁴ Therefore, it appears that ICI drugs accounted for approximately 5% of the overall PBS expenditure. To put this into perspective, the combined costs of adalimumab (AUD 320.4 million ⁹³ ) and aflibercept (AUD 304.2 million ⁹³ ) amounted to AUD 46 million more than the whole class of ICI therapies, although as can been seen in Figure 2, expenditure on ICI drugs is increasing. It should be noted that these numbers are only indicative, as each therapy has its own special pricing arrangement and rebate, which are commercial in confidence.

England and Wales fund ICI therapies through the Cancer Drug Fund, which operates with a fixed budget. ⁹⁵ A recent review found that they kept the spending for the Cancer Drug Fund within the GBP 340 million a year budget. ⁹⁶

Every ICI therapy had a special pricing arrangement on the Australian PBS or there was a requirement to provide the drug according to a commercial/patient/managed access agreement or scheme with NICE. One interpretation of this is that the companies had to offer a rebate of the public listed price of the ICI therapies, however, it is uncertain what the magnitude of the rebate is since the details are commercial in confidence. This lack of transparency is not necessarily negative as it enables companies to offer substantial discounts without being concerned about commercial risks due to reference pricing. ⁹⁷ However, this also creates issues as there is a lack of visibility of the comparator price resulting in a possible underestimation of the cost‐effectiveness because of high prices being used in cost‐effectiveness analysis. ⁵⁶

Often a performance based financial risk share agreement is also needed in conjunction with these special pricing arrangements. As mentioned previously, payers can manage the treatment duration using stopping rules. ⁸¹ Another example of financial management is through expenditure caps. This can either be based on agreed utilisation rates and a 50% rebate for expenditure beyond the agreed cap (as was the case for pembrolizumab) ³⁸ or even with a 100% rebate (nivolumab). ⁵⁷

Finally, the issue of ICI combination therapies needs to be mentioned. The financial implication of having to pay for 2 ICI therapies is potentially devastating. However, a classic HTA tool, namely cost minimisation analysis, has proven useful for indirectly managing the risk. Decision makers use cost minimisation analysis when it turns out that the clinical effectiveness is equivalent. ⁹⁸ Briggs et al. ⁹⁹ deemed this approach dead back in 2001, but it is still actively being used when a superiority claim of ICI combination therapies over monotherapy is not possible because of immature data. ⁷² , ⁸²

4. CONCLUSION

This review of the reimbursement decisions and subsequent financial impact in Australia and the UK suggests that the costs of ICI therapies have been well managed so far. The cancer drug fund in England and Wales stayed within budget and in Australia ICI drugs only account for 5% of the total spend in 2019. Through risk agreements and managed entry programmes, the example of ICI therapies illustrates that industry and payers can effectively collaborate to ensure that innovative, but expensive, drugs can be made readily available to patients.

COMPETING INTERESTS

There are no competing interests to declare.

CONTRIBUTORS

All authors contributed to the conception, drafting and approval of the manuscript.

Kim H, Liew D, Goodall S. Cost‐effectiveness and financial risks associated with immune checkpoint inhibitor therapy. Br J Clin Pharmacol. 2020;86:1703–1710. 10.1111/bcp.14337