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Value-based procurement model for the purchase of hyaluronic acid for intra-articular use

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European Statement

Selection, Procurement and Distribution

Author(s)

ERMINIA CACCESE

Why was it done?

The aim is to hold a value-based tender by incorporating the clinical benefit into the competition score for the procurement of Hyaluronic Acid (AI) for intra-articular use.
The main purpose of this tender is to purchase the product with the best cost-effectiveness profile according to the Net Monetary Benefit (NMB) and putting drugs and medical devices in competition.

What was done?

In Italy as well as in Europe medical devices (MDs) procurement is based on construction features and on price. The price of MDs is not negotiated by regulatory authorities, but it’s defined by industry. Today, in a limited resources scenario, it is necessary to implement value-based procurement.

How was it done?

We used the NMB method (1) as an award criterion, a parameter that evaluates the cost-effectiveness of the therapeutic intervention.
A bibliographic search was carried out to support the chosen endpoints and the tender lots. The utility and cost values linked to therapeutic failure were sought and the minimum accepted quality was defined. The starting price was calculated per therapy cycle/patient.
Finally, a software was designed to calculate the value-based competition score.

What has been achieved?

The tender consisting of 3 lots was announced with resolution n.209/2023 (2). The technical evaluation focuses on the enhancement of the clinical benefit based on the following scores: price (30)/clinical benefit (70). The endpoints chosen for the evaluation of clinical benefit are deltaVAS and deltaEQ-5D. Both drugs and MDs can be offered for each therapeutic indication.

What next?

This tender is an example of value-based procurement that uses the evaluation of clinical effectiveness as a quality evaluation criterion.
The aim is to quantitatively link the purchase price of a therapeutic intervention to the extent of the benefit observed in clinical studies, rewarding the interventions that produce the greatest benefits. The innovative nature of our tender lies in putting drugs and MDs in competition in the same tender lot and for the same therapeutic indication, thus purchasing the product with the best cost-effectiveness profile based on scientific evidence. We are awaiting the award of the tender, the results of which we will publish shortly.

Environmental criteria in medicine procurement

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European Statement

Selection, Procurement and Distribution

Author(s)

Outi Lapatto-Reiniluoto, Suvi Sivula, Elina Ahomäki

Why was it done?

Price has been the most prominent criteria in procurement quality being the second. Environmental aspects haven’t been assessed earlier. Differences between the pharmaceuticals’ environmental burden can be considerable and by choosing wisely we would be more sustainable.

What was done?

Environmental criteria have not been used in Finland in hospital procurements earlier. We created the criteria which would be acceptable to all parties (hospitals, suppliers), would be reliably assessed, and easily copied to other hospitals.

How was it done?

Our tender had six questions for everyone and two more questions for antibiotics or hormones. The common questions were answered by yes / no / we do not know. Points given were 0, 1, 2. An example of the common question is: Does the company have a plan how to reduce CO2 emissions caused by itself?
Questions for antibiotics and estrogen hormones were: Company has told in which country and in which plant the API is produced and the formulation happens.

What has been achieved?

132 providers answered so far. Quality of answers varied considerably, from 0 to 12 points, mean 7 points. Questions for antibiotics created the most discrepancies: 41 providers; 15 were not able to answer these questions acceptably. The answers showed that the questions were not too difficult, these questions could be answered, and the answers can be analysed.

What next?

The criteria were very simple and assessing the answers was not difficult. Only one question was widely misunderstood. Questions were universal and can be used in other hospitals, too, which is the wish from the industry (same questions everywhere). Wide range of results showed differences between the companies. During this round we did not give any credit for the best products but in the future more responsible products should be rewarded. Antimicrobial resistance e.g., is a global problem but if the company does not know where its products are manufactured how can they look after wastewater treatment of their products.

Create the complete Product Overview for tendering and price negotiations

European Statement

Selection, Procurement and Distribution

Author(s)

Liselotte Kamper

Why was it done?

To ensure optimal price negotiations and tenders based on an up-to-date product overview including both pharmaceutical, therapeutic, and commercial knowledge.

What was done?

Team Horizon Scanning (HS) in Amgros has developed a comprehensive report covering all important information for a new medicine about to be marketed within the EU – an Extended Product Overview (EPO).

How was it done?

Following every meeting in the Committee for Medicines for Human Use (CHMP) at the European Medicines Agency (EMA), information on applications for marketing authorisation on new medicines is identified in the agenda and minutes. The following information is compiled:
• Name of the active substance
• (Commercial) name of medicine
• EMA procedure number
• Date of application
• Type of application (Orphan/Accelerated review/PRIME)
• Name of the marketing-authorisation applicant
• Therapeutic indication
The information is supplemented with:
• ATC-code
• Mechanism of action
• Incidence/Prevalence
• Potential impact for the patients and the health care system
• Already approved medicines to treat the same disease

The information is presented and discussed at an internal meeting in Amgros between the HS team and representatives from health economics, tendering and negotiations. At the meeting it is decided for which medicines it is relevant to produce an EPO. The EPO contains the above-mentioned information as well as the following information:
• A description of the disease
• A status of the current standard treatment of the disease
• Information from the clinical studies supporting the indication/application
• Other medicines in pipeline for the same indication, with a status on the timeline for applying for marketing authorization
• Analysis of the market into which the medicine will be launched
The final document is confidential.

What has been achieved?

The EPO-document ensures that Amgros is prepared in the best way in negotiations to agree on a price level that gives a reasonable match between the effect of the medicine and its costs compared with the current standard treatment. Thereby more cost-effective health solutions and possibility to achieve more health for money in the Danish hospital setting can be secured.

What next?

The HS team wish to expand the EPOs to also cover specific therapeutic areas of interest e.g., multiple myeloma and other complexed therapeutic indications.

JOINT PROCUREMENT: LEARNING FROM A PILOT OF JOINT PROCUREMENT OF OLDER PRODUCTS (submitted in 2019)

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European Statement

Selection, Procurement and Distribution

Author(s)

Helle Pasgaard Rommelhoff, Lise Grove, Dorthe Bartels, Trine Ann Behnk, Lars Ole Madsen

Why was it done?

To share learning from a pilot of procuring pharmaceuticals jointly across borders in three European countries as well as post-learning on planning and execution elements in order to have a successful joint procurement.

What was done?

Three European countries decided to implement a joint procurement pilot in order to seek solutions for some of the supply issues in the three markets. This was a consequence of being a small volume market with potentially limited attractivity for suppliers of older products. An initial evaluation of synergies and discrepancies among the involved countries supported the understanding of how to jointly procure medicines for the hospital sector.

How was it done?

The visualised model of a product lifecycle was applied to understand where a pilot of joint procurement would support the supply issues of the older products. This led to a shared understanding between the countries on where the supply issues may occur and potential solutions. An evaluation of building the joint procurement process, which took approximately 2 years, is now available as a best practice with “Do’s and Don’ts” for other countries with joint procurement interest. Criteria in the tenders announced were either price alone or in combination with. One of the tenders included a mandatory bid for all 3 markets, the rest of the tenders were mandatory for 2 of the markets with optional submission for the 3rd market. This was an outcome of hearings with suppliers. The feedback from the hearings was modifying the tender materials into a new proposal for suppliers. A political framework was signed between the countries to have a shared fundament to build on.

What has been achieved?

The final outcome of a joint procurement was evaluated. Evaluation of the submission and preparation part showed that the majority of joint tenders had an efficient competition on price with a representative amount of suppliers bidding. It also shown that it was vital to have collaboration and to listen to stakeholders in order to have a robust insight on what was possible for all involved parties. The thorough preparations supported the process and the final outcome. There was dual engagement between the stakeholders and transparency on the wish from countries to overcome barriers and conduct joint procurement to support supply issues.

What next?

Efficient and timely planning is crucial. Collaborations between the involved stakeholders are important. Mutual understanding of the interests and strategy is helpful in building a shared view on the problems and potential solutions. It is seen as essential, when planning joint procurement, to include logistic thinking already in the early tender planning phase.

INNOVATIVE PROCUREMENT

European Statement

Selection, Procurement and Distribution

Author(s)

Alison Anastasi, Karl Farrugia

Why was it done?

This was done as a tender was being issued also for medicines that still had a patency and had no competition and the prices quoted for were higher than other international external reference prices. Thereby a new pricing reimbursement system was undertaken and items procured were studied intensively before choosing the right procurement model. The main point was thinking outside the box inducing interest in international companies who were willing to support and assist the innovative local systems by participating in the new systems leading to improved access and better value for money.

What was done?

In September 2016, a workshop and strategy meeting was organised at WHO Denmark to discuss global procurement strategy and share country practices. Malta was one of the facilitators and invited speakers. In the past years tendering was the main system for procurement. However, on having a thorough understanding of medicines and non-pharmaceuticals, market strategy, and patency other processes have been studied and adopted. The models involve negotiations, pay per use systems, and pay per performance models.

How was it done?

This was done by setting multidisciplinary teams within the hospitals and by having good research methodology skills. This led to smoothing the gaps between the actual horizon scanning, health technology assessments and final choice of procurement strategy. International liaison, partnership with the industry, and relevant focus groups with annual seminars made this possible as mixed experts met and gave their best shot at this new system. The fact that no one size fits all made procurement more interesting and from one cycle to the other there is a learned curve that brings successful results.

What has been achieved?

Malta achieved better competition, uninterrupted sourcing, investments and stable pricing with continuous yearly reductions. From negotiations of patented medicines Malta saved approximately 1.5-2 Million Euro per year since 2013. With respect pay per use systems such as the total knee replacements Malta gave a capped price and ended up paying half of what is used to pay and companies managed to bid for the set price. In renal dialysis the cycle involved payment per patient service thereby reducing wastage, storage, and ordering of consumables and this will render a cost saving of 5Million Euro throughout cycle. The new processes launched for multiple sclerosis will dictate that whoever reaches the cheapest price ranking will be used to start the patients clinically and the pay per cure cycle for Hepatitis C will lead to savings and complete eradication in five years time.

What next?

Malta is one of 6 small EU Member States so besides its size and geography there are other elements were it triggers the procurement department to think of innovative ways to treat our patients and as yet remaining sustainable. There are other projects in the pipeline however, Malta is sharing its good practice with the industry, with the WHO and other international fora so that certain elements are taken on board as standardised systems for equality of service and treatment in all countries.

Early-stage experiences of the implementation of a large-scale robotic storage and distribution system in a hospital pharmacy service within a large UK health authority

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European Statement

Selection, Procurement and Distribution

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