Insights into value-based pricing approaches for oncology products in Germany

29 November 2024

The landscape for oncology drug pricing in Germany is complex, with multiple factors influencing the pricing and reimbursement decisions that pharmaceutical companies must navigate. As the second-largest pharmaceutical market in Europe, Germany represents a significant opportunity for new oncology treatments. However, launching in this market involves understanding both the evolving competitive environment and the broader healthcare system dynamics. One critical element in this process is value-based pricing, a pricing approach that links the price of a drug to the value it delivers to patients and the healthcare system.

Previously, Global Pricing Innovations (GPI) employed a multi-criteria decision analysis (MCDA) analogue-based approach to construct a robust, accurate and comprehensive value framework for orphan indications. This provided insights on payer perceptions by leveraging health technology assessment (HTA) documents, published sources, and payer interviews to assess the importance of various factors in determining the overall value of pharmaceutical assets.

Key Insights

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Methodology

Building on previous GPI research in the orphan drug sector, a similar framework was developed for oncology. This included additional complexities specific to oncology, such as line of therapy, biomarker specificity, and type of combination. This research focuses on German payer perception of drug value and utilises the oncology value framework for two approaches dependent on specific indications: 1. Comparator selection approach, which involves price benchmarking when suitable comparators are available and 2. Analogue selection approach, which follows analogous regression forecasting in rarer oncology indications with limited/no suitable comparators.

Result

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Payer perception of value for oncology drugs in Germany

Through interviews and research with German payers, we identified that the value of a drug in Germany can be characterised by 23 attributes, which are grouped into four key value domains: Burden, Product characteristics, Trial design and Clinical benefit.
The relative importance of these domains varies, with different weightings assigned to each domain based on payer perception.

Domair
Definition

Burden

The patient, societal and treatment burden and potential unmet need considered as part of payer decision-making for a new product

Product characteristics

The features of a new product and the associated indication considered as part of payer decision-making Trial design

Trial design

The setup and methodology of a clinical trial providing evidence for a new product considered as part of payer decision-making

Clinical benefit

The perception of clinical trial results for a new product that will be considered as part of payer decision-making

Our findings reveal that the oncology framework in Germany is perceived similarly to the orphan framework, where clinical benefit is the most significant value driver (52%), followed by trial design (37%) and burden (11%) (Figure.1).

Although product characteristics may not be a primary value driver for payers, all four domains—including product characteristics—are deemed important for selecting the appropriate comparators/analogues in value-based pricing analysis.

Approaches for value-based pricing analysis: Comparator selection vs Analogue selection

Depending on the market landscape for an asset in a specific indication, both the comparator selection and analogue selection approach demonstrate robust and data-driven insights for value-based pricing which facilitates an improved understanding of asset value and price within a given market landscape.

Case 1: Comparator selection approach in the presence of direct comparators within a specific indication

Example: In Germany, Libtayo (Cemiplimab) was approved for first-line treatment of advanced or metastatic NSCLC with PD-L1 expression ≤ 50% in 2021. Following the approval, the post-AMNOG price (i.e., the negotiated reimbursement price) was made available in 2022. At the time of Libtayo’s launch for first-line treatment of advanced or metastatic NSCLC, the direct comparators available within the specific indication were: Imfinzi (Durvalumab), Tecentriq (Atezolizumab), Keytruda (Pembrolizumab) and Opdivo (Nivolumab).

Based on the asset target product profile (TPP) and the subsequent value score based on payer perception in Germany, Libtayo was assessed relative to its comparators, Imfinzi and Tecentriq.

Due to the similarity of its overall value (Asset X/Libtayo = 25; Imfinzi = 27, Tecentriq= 28) amidst these comparators, Libtayo was predicted to not receive a price premium. As a result, the price would be set within the predicted range of €74,307 to €79,451 (Figure.2).

With the actual annual cost of Libtayo being ~€75,862, our prediction demonstrates the robustness in the methodology in determining an early value-based price point within a crowded indication.

* Keytruda was excluded from the comparator list for analysis as it was the first to launch in this indication, resulting in a higher initial price, while Opdivo was excluded as it received a lower price through AMNOG negotiations and was benchmarked against chemotherapy, not other immunotherapies

Approaches for value-based pricing analysis: Comparator selection vs Analogue selection

Case 2: Analogue selection approach in the lack of presence of direct comparators within a specific indication.

Example: In Germany, in 2018 Imfinzi (Durvalumab) was approved for locally advanced unresectable NSCLC in patients whose tumours express PD-L1 ≥ 1% who had not progressed following platinum-based chemotherapy and concurrent radiotherapy.

As the first treatment approved for this specific indication, no direct comparators were available at the time of launch.

To establish a relevant price point, analogues were selected based on broader therapeutic indications, ensuring alignment with the same line of therapy. This led to the selection of Keytruda (Pembrolizumab), Kisqali (Ribociclib), Tagrisso (Osimertinib), Tecentriq (Atezolizumab), and Tafinlar (Dabrafenib), considering their similarity in disease burden, the absence of alternatives at launch, and availability of post-AMNOG pricing data.

The value-based price forecast derived using this approach, estimated a price point of €77,766 annually for Asset X/Imfinzi (Figure.3).

Based on the actual estimated annual post-AMNOG price of Imfinzi, (€77,052), demonstrating the robustness of this approach in determining an early price point (Percentage difference: 0.92%).

It is important to note, however, that the accuracy of an analogue-based approach in forecasting the right price point is dependent on the choice of analogues, highlighting the importance of selecting the most relevant analogues for comparison.

Conclusion

Both approaches provide a robust method for determining an early price point. The accuracy and appropriateness of the forecast depends on selecting the most suitable approach for the asset and indication being assessed – either the Comparator Selection or the Analogue Selection approach. By combining expertise and understanding of market trends, clinical data, and pricing dynamics, these approaches are effective in obtaining a comprehensive value-based pricing forecast.

Insights into value-based pricing approaches for oncology products in Germany

Key Insights

Methodology

Result

Payer perception of value for oncology drugs in Germany

Burden

Product characteristics

Trial design

Clinical benefit

Approaches for value-based pricing analysis: Comparator selection vs Analogue selection

Case 1: Comparator selection approach in the presence of direct comparators within a specific indication

Approaches for value-based pricing analysis: Comparator selection vs Analogue selection

Case 2: Analogue selection approach in the lack of presence of direct comparators within a specific indication.

Conclusion

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