Feedback on draft RFP for medicines for rare disorders

Medicines Decision

PHARMAC is pleased to announce the outcome of the consultation on the draft request for proposals for supply of medicines for rare disorders.

This was the subject of a consultation letter dated 8 July 2014


In July 2014 PHARMAC sought public feedback on a draft Request for Proposals (RFP) for medicines for rare disorders. This is a new commercial approach PHARMAC is trialling with the aim of improving access to funded medicines for patients with rare disorders.

We received 23 written submissions to consultation. Ten responses were from suppliers, six from individuals, six from consumer groups, and one from a clinician. Additionally, PHARMAC met with suppliers during the consultation period to discuss the proposal. We received nine Expressions of Interest from suppliers which are considering bidding.

Overview of responses

Overall, people supported PHARMAC trialling this new approach. Most people felt that $5 million per annum of contestable funding over five years was not enough. However, one submitter noted “$5 million seems insufficient but often good ideas start small”. Some people thought there was lack of clarity about whether this funding was ongoing or whether there was a risk that funding would cease after five years.

PHARMAC intends that any medicines listed on the Pharmaceutical Schedule as a result of the RFP would continue to be available for people as long as they continue to benefit, as measured by appropriate clinical criteria. PHARMAC has identified up to $5 million per annum that is available for funding rare disorders medicines through the RFP, without placing pressure on its other pharmaceutical funding commitments within the Combined Pharmaceutical Budget (CPB). PHARMAC will be evaluating whether the new approach has achieved its objective before considering whether to run a further RFP in future years.

PHARMAC is not proposing to ring-fence funding for rare disorders. Just as with any new medicine listed on the Pharmaceutical Schedule, any medicine funded as a result of the RFP would become a budget line in our forecast for managing the CPB.

Some people suggested that PHARMAC should use multi-criteria decision analysis to inform its decisions on the RFP proposals, rather than focusing on cost-effectiveness analysis or traditional health technology assessment frameworks. PHARMAC’s pharmaceutical funding decisions involve consideration of all of the nine decision criteria[1], of which cost-effectiveness is but one criterion. PHARMAC considers that these current nine criteria provide a suitable basis on which to assess bids received through the RFP process and that using these criteria would be consistent with PHARMAC’s Operating Policies and Procedures.

Overall, feedback did not suggest that the proposed prerequisites were inappropriate for the purposes of the RFP. We have made a minor amendment to prerequisite five to better reflect the intent of this prerequisite so that it now reads “The patient’s absolute or relative age-specific life expectancy and/or quality of life could be substantially improved as a direct consequence of treatment”. We have also clarified the intent of this prerequisite by explaining the meaning of “substantially improved”.

Finalised prerequisites and explanatory notes

The updated prerequisites are listed below, followed by an updated description of each of the prerequisites.

Disorder related

1. There is a rare[2] but clinically defined long-term disorder that is identifiable with reasonable diagnostic precision.

2. Epidemiological and other studies provide evidence acceptable to PHARMAC[3] that the disorder causes a significant reduction in either absolute or relative age-specific life expectancy or quality of life, for those suffering from the disorder[4].

Treatment related

3. The medicine is regarded as a proven therapeutic modality for an identifiable patient population[5] i.e. the medicine has been approved by Medsafe or an international regulatory authority[6] for the identified indication.

4. There is evidence acceptable to PHARMAC[3] that the medicine is likely to be clinically effective for the identified patient population[5].

5. The patient’s absolute or relative age-specific life expectancy and/or quality of life could be substantially improved as a direct consequence of the treatment[7].

Alternatives related

6. The medicine is not registered for the treatment of another, non-rare disorder, or if it is, the cumulative prevalence across all the indications still falls within the definition of rare[8].

7. There is no suitable comparable[9] alternative treatment on the Pharmaceutical Schedule.

8. There is no suitable[9] funded alternative non-drug therapeutic modality for the rare disorder.

Explanation of prerequisites

Prerequisites one and six – rarity

There is no universally-accepted definition of what ‘rarity’ is. A condition may be considered rare in one part of the world, or in a particular group of people, but be considered common elsewhere.

For the purpose of this RFP PHARMAC intends to define a rare disorder as one that affects one person for every 50,000 people in the general population. This definition would mean there are currently up to 90 people across the whole of New Zealand that have each rare disorder.

The prevalence definition would apply to ongoing conditions - a condition lasting longer than 12 months.

Suppliers might wish to seek to limit the total number of patients eligible for funding to a number which offers a sufficient return on investment, taking into account the fixed funding available. We therefore propose that suppliers would be able to identify a sub-set of people with the disorder who would be eligible for funding, as long as the sub-set is distinct and clinically meaningful, and the total number of people with the disorder still meets the 1:50,000 prevalence criterion.

Prerequisite 2 – disease severity

Under the fund, not only must the disorder be rare but it must cause a significant reduction in either absolute or relative age-specific life expectancy or quality of life, for those suffering from the disorder.

We will measure severity by any reduction in a person’s Quality Adjusted Life Years (QALYs) that is due to the disorder. Changes in QALYs measure how much the disorder shortens a person’s life expectancy (loss of quantity of life) and how much it reduces the quality of life. Further information on the QALY measure is available in past PHARMAC annual reviews[10].

Prerequisite 3 – registration

The bid must be for a medicine to treat the rare disorder.  This can include medicines integrated within a medical device (eg, as a delivery mechanism) but only funding proposals for products classified as medicines will be considered).

The treatment must be a proven therapeutic modality; it should not include experimental medicines or those still in trials. To this end, we will only consider bids for medicines that have been registered by Medsafe or an international regulator recognised by Medsafe. This will provide an appropriate level of assurance of the product’s quality, safety and efficacy. It is our expectation that, prior to being listed on the Pharmaceutical Schedule, medicines funded via the contestable fund would need to be registered by Medsafe or have been submitted for registration with Medsafe. If we receive a bid for an unregistered product, we have the option to initiate a Pharmaceutical Schedule listing application outside of the contestable fund process.

You can find a list of international regulators recognised by Medsafe on page 38 of Medsafe’s Regulatory Guidelines for Medicines(external link).

Prerequisites 4 and 5 – effectiveness

There needs to be evidence “acceptable to PHARMAC” that the medicine is effective. We need to reach a threshold of confidence, and it may not be possible for us to determine whether this threshold is reached for completely new medicines that have not already been assessed by the Pharmacology and Therapeutics Advisory Committee (PTAC) (whether they are registered or not) within the time we have available for the RFP.

We will also have the option to initiate a Schedule listing application for any medicines that we are unable to fully consider within the RFP timelines.

Suppliers seeking funding will need to demonstrate that the medicine could significantly affect the natural history of the disorder it treats. We will need evidence that the medicine is likely to be clinically effective and would result in a significant extension in life expectancy or quality of life compared with currently funded treatments.  For the avoidance of doubt the requirement that the treatment provide ‘substantial improvement’ does not mean an absolute gain in health status is needed.  Stabilisation or substantially slowing the natural progression of the disorder would be a desirable outcome alongside other possible outcomes. PHARMAC will seek clinical advice as to the likely benefit, based on the evidence provided.

Prerequisites 7 and 8 – alternative treatments

We will exclude medicines for which there is already a comparable treatment funded. Before a medicine is excluded on the basis of prerequisites 7 and 8, the safety and efficacy of the alternative funded treatment must be comparable to the medicine for which we have received a bid, in terms of either absolute or relative age-specific life expectancy or quality of life. For example, this would mean that best supportive care typically will not be considered to be a comparable alternative treatment.<