TLV reimburses Zepatier and Epclusa, authorities indicate Sweden is prepared to accept higher prices for orphan medicines

TLV accepts dynamic pricing-negotiation and reimbursement process for orphan drugs

The head of Sweden's Dental and Pharmaceutical Benefits Agency (TLV), Sofia Wallström, announced on 27 September that the agency was prepared to accept higher prices for certain orphan drugs. This follows interventions by Swedish Orphan Biovitrum AB (SOBI, Sweden) in late 2015 calling for discussions between the pharmaceutical sector and price-setting authorities seeking to accelerate market access for rare-disease medicines in an affordable manner (see Sweden: 16 November 2015: Sweden's TLV calls for discussion with pharma companies on affordable orphan medicines). Swedish news agency LIFe-time.se published Wallström's comments on 28 September, including indications that the TLV is prepared to accept higher willingness-to-pay (WTP) criteria for some orphan medicines. Wallström noted that the majority of orphan-disease drugs were priced "reasonably" on the Swedish market, and argued that only a small number of pricing issues were contentious.

However, in order to pay potentially higher prices for orphan medicines that treat critical conditions – and where no alternative treatment options are available – the new TLV guidelines would mean that Sweden conducts stricter assessments of orphan drug evaluations. On the downside, in certain situations where a particular orphan drug is indicated for more moderate conditions, the TLV may employ a lower WTP threshold, according to Wallström. These changes do not require further legislation, and will be implemented with immediate effect. The TLV has, therefore, indicated that the total cost of reimbursed outpatient orphan drugs may be allowed to increase.

In addition, Wallström further confirmed that the system of tripartite discussions between the pricing and reimbursement (P&R) agency, the pharmaceutical sector, and Sweden's advisory New Therapies Council (NT Council) would remain in place as part of a national process for value-based pricing. In December 2015, Sweden's Supreme Administrative Court ruled that the TLV was not authorised to prevent a county council (landsting) from entering into separate risk-sharing agreements with manufacturers, as the Skåne region did with UCB Pharma (Belgium) concerning a rheumatoid arthritis treatment. Uncertainty remains over the precise implications of the ruling, with risk-sharing remaining a potential option for consideration in some circumstances at the level of landstings. According to Wallström, tripartite discussions should be conducted at national level before pharmaceutical firms and regional counties sign pricing agreements on orphan drugs: this is necessary in order to allow the TLV to maintain overall control over prices and costs. As a result, the TLV is seeking to consolidate the process through which landstings negotiate risk-sharing agreements for orphan medicines. A separate investigation published by Sveriges Radio on 26 September concluded that 19 out of 21 landstings substantially increased spending on orphan drug products during the period 2011–2015; in the case of Södermanland, costs were reported to have doubled from SEK16 million (USD1.8 million) in 2011 to SEK36 million in 2015. Total spending by regional counties in Sweden on orphan medicines in 2015 amounted to about SEK1.2 billion, and the overall cost of prescription drugs in the country is estimated at approximately SEK26 billion annually.

TLV accepts TNF-inhibitor inclusion for general reimbursement, removes limits

The TLV conducted a review of reimbursement arrangements for all subcutaneous tumour necrosis factor-alpha (TNF-alpha) inhibitors, deciding to include a number of TNF inhibitors in the general reimbursement system without conditional reimbursement limitations. (The judgement is available in Swedish here.) A series of price cuts are scheduled to take effect from 1 October 2016: these will primarily affect Cimzia (certolizumab pegol; UCB, Belgium) and Simponi (golimumab; Johnson & Johnson, US). Risk-sharing agreements with Benepali (Samsung Bioepsis, UK), Enbrel (etanercept; Pfizer-Amgen, US) and Humira (adalimumab; AbbVie, US) will also be affected (see Sweden: 17 December 2015: Swedish TLV maintains reimbursement levels for TNF alpha inhibitors). The review of TNF inhibitors is ongoing, although further changes are not expected until late 2017.

Zepatier and Epclusa granted reimbursement approval

The TLV has approved the reimbursement of the hepatitis C virus (HCV) treatment Zepatier (grazoprevir and elbasvir), produced by US pharmaceutical company Merck Sharp & Dohme (MSD); the full economic evaluation is available in Swedish here. The P&R approval will significantly expand the range of innovative HCV therapeutic options available to Swedish patients. Moreover, the reimbursement approval process has been effectively fast-tracked, given that Zepatier was granted market authorisation clearance by the European Commission only last month (see Europe: 1 August 2016: European Commission approves Merck's HCV drug Zepatier). Zepatier is indicated for the treatment of genotype 1 and 4 HCV infections in adult patients; the P&R decision highlights the TLV's strategy to encourage competition in the HCV market space, and indicates the agency's favourable disposition towards bringing new innovative HCV treatments to the market in the Scandinavian country.

The TLV evaluation document noted that there are no direct comparative studies between Zepatier and other available HCV drugs. However, the agency assessed the effect of Zepatier to be comparable in terms of effectiveness to other products that are reimbursed for the treatment of chronic HCV genotypes 1 and 4. A cost comparison was conducted within each genotype group: for genotype 1, the TLV concluded that a 12-week treatment course with Zepatier was comparable to a combination of AbbVie's Viekirax (ombitasvir + paritaprevir + ritonavir) and Exviera (dasabuvir). In this instance, the TLV assessed that Zepatier is appropriate for reimbursement only for severely ill patients with fibrosis stage F3 (compensated cirrhosis) and F4 (compensated liver cirrhosis). In genotype 4, Viekirax-ribavirin was assessed to have a lower price than Zepatier; Zepatier will therefore only be reimbursed for patients with fibrosis stage F3 and F4 in cases where treatment with Viekirax-ribavirin is not deemed appropriate. The estimated price level per patient of a 12-week course of Zepatier is SEK379,545, with a cost of SEK506,060 for 16 weeks, according to the TLV.

In a separate reimbursement announcement issued on 27 September, the TLV approved the reimbursement of US firm Gilead Sciences' HCV drug Epclusa (sofosbuvir, velpatasvir) for use in treating fibrosis stages F3 and F4 in genotypes 2 and 3. The combination drug has also been approved for fibrosis stage F3 and F4 in genotypes 1 and 4 in situations where treatment with Viekirax-Exviera or Viekirax-ribavirin is not deemed appropriate. Furthermore, Epclusa was granted conditional reimbursement approval for F2 fibrosis (moderate) in genotypes 2 and 3, provided that treatment with Gilead Science's Sovaldi (sofosbuvir), combined with ribavirin, is not appropriate. The list price of Epclusa as a monotherapy is SEK431,000 for a 12-week course, according to the TVL analysis. The full economic evaluation is available to view in Swedish on the TLV's website (see here).

The reimbursement approval represents a relatively rapid decision process from the TLV, given that Epclusa was granted market authorisation for genotypes 1–6 HCV infection only in mid-July (see Europe: 11 July 2016: Gilead Sciences' Epclusa granted European Commission market authorisation).

Outlook and implications

Issues related to the affordability of orphan drugs in Sweden will remain a concern for regulators. However, the announcement by the TLV that the agency is prepared to accept higher orphan medicine prices is a positive development for innovative pharmaceutical companies operating in the Nordic market; the policy change is likely to result in stronger expansion in spending on orphan drugs in the coming years.

From a patient perspective the development is also positive, since it should result in higher utilisation. The policy may moderately affect the success rate for orphan drug P&R approvals and the average cost of orphan drugs; however, despite this, the overall budget impact of orphan medicine expenditure in Sweden is likely to remain sustainable, given that the allocation of resources for orphan drugs is a relatively small proportion of total pharmaceutical expenditure. Figures for 2013 indicate that orphan medicine expenditure amounts to just 2.7% of total drug expenditure in Sweden.