Opportunities and challenges of an innovative payment model for Advanced Therapy Medicinal Products in Sweden -A hypothetical example in the treatment of β-thalassemia

Advanced Therapy Medicinal Products (ATMPs) represent a paradigm shift in health care as they have great potential for preventing and treating often life-threatening diseases. Two characteristics of ATMPs impose potential challenges to the current system of financing, pricing and reimbursement of drugs. Firstly, ATMPs are often one-time treatments where the value of life-long benefits is realized in relatively short time. The health care system may not be able to finance highly cost-effective treatments as the traditional up-front payment model can result in a so called “affordability barrier”. Secondly, ATMPs are often developed with accelerated regulatory assessments in rare diseases for which no treatment is available. Consequently, at the time of approval there is still uncertainties of the full value of the treatment, which can only be measured after several years post-approval.

Transfusion-dependent ß-thalassemia is an inherited blood disorder. Current standard of care includes life-long blood transfusions and iron chelation treatment, which can amount to SEK 300 000 annually and substantial Health Related Quality of Life impairment.

In this report we discuss a hypothetical example of a one-time treatment which is expected to provide a substantial life-time benefit and can be considered to fulfil the two typical challenges for ATMPs; the ”affordability barrier” and “uncertainty of the full value”. The objective of this report is to discuss the opportunities and challenges of a proposed innovative payment model for an ATMP in Sweden, by using treatment of ß-thalassemia as an example.

The proposed performance-based payment model includes an initial payment of one fifth of the price upfront at drug product delivery, and another four installments to be paid annually, depending on the treatment success of transfusion independence.

The proposed payment model has several attractive features that contributes to solve the challenges often facing ATMPs. It allows for the payer and manufacturer to share the risk and the uncertainty of the response rate and the sustainability of the response. The suggested outcome measure, transfusion independence, is likely to well reflect the value of the treatment and meanwhile it is straightforward to measure and is associated with a low administrative cost. Furthermore, the proposed payment model reduces the affordability barrier by distributing payments over five years.

ATMPs generally target small patient populations, but the potential budget impact of the aggregated patient populations is extensive. In the Swedish system, more flexible budgets and additional funding by the state for new innovative treatments could help reduce the affordability barrier faced by the regions in the introduction of ATMPs.

IHE Report 2020:3, Lund: IHE, Sweden, 2020.