Environmental impact: ​A consideration for future pricing and reimbursement?​

/in ,

According to the Royal Pharmaceutical Society, medicines are responsible for ~25% of the UK NHS’s carbon emissions [1].​

These emissions result from the manufacture, procurement, transportation, and use of medicines (20%), with the remaining 5% specifically from inhalers and anaesthetic gases [1]. ​

On a global level, the health sector has been estimated to contribute approximately 4.4% of global net emissions by the Health Care Without Harm organization [2].​

​While simple changes such as opting to use propofol instead of desflurane as an anaesthetic reduces the total amount of greenhouse gases released over the drug life cycle [3], what consideration is given to the environmental impact of new medicines when being evaluated for pricing, reimbursement and access at launch?​

With climate change happening at an ever-increasing rate, it’s no surprise that the topic of sustainability and environmental impact was raised in several forums at the recent HTAi Annual Meeting in Australia, as noted by one of our FingerPost consultants, Sharon Leadbitter, who was in attendance.​

Is environmental impact a relevant dimension to include in HTA?

From our experience at FingerPost, the environmental impact is not a consideration for access, pricing and reimbursement decisions. Because of this, it is ignored in the value messaging, objection handling, economic modelling and HTA submissions for new medicines. ​

Payers do consider wastage and storage in relation to formulary listing decisions, but this is typically from a practicality and budget perspective, rather than an environmental one. But could this change in the future as sustainable prescribing policies are scaled up to regulators and/or payers? ​

Sharon conducted a targeted literature search via PubMed using key words ‘HTA’ and ‘environment’ to understand if environmental impact is currently being considered within HTA decision frameworks. The initial search produced almost 900 citations, of which the majority were irrelevant. The references from relevant articles published in 2023 were used to locate other publications and sources. ​

Here are her key take home points.​

Environmental impact is not high on the agenda with current appraisal methods for new medicines…​

Despite the increasing interest in sustainability of medicines, a 2023 review by Breslau [4] of 53 HTA guidelines for ten societal value elements† identified only one mention of ‘environment’. This was by the Second Panel on Cost-Effectiveness in Health and Medicine [5].

The Second‡ Panel recommended that the reference/base cases of all cost-effectiveness analyses should report from both a healthcare sector and a societal perspective [6].

Societal healthcare-related inclusions are costs of patient-time, unpaid caregiver-time and transportation to receive care.

Environment is included as a non-healthcare sector impact, along with productivity, consumption, social services, legal or criminal justice, education and housing [5] [7].

…despite European Regulation recognising the need for the sustainability of health systems​

This aligns with Note 3 of the new definition of HTA developed though an international collaboration in 2020 [8], which says:
 
The dimensions of value for a health technology … include clinical effectiveness, safety, costs and economic implications, ethical, social, cultural and legal issues, organisational and environmental aspects, as well as wider implications for the patient, relatives, caregivers, and the population… 

However, while the Regulation 2021/2282 of the European Parliament recognises the importance of the sustainability of health systems (EUR-Lex—32021R2282), it does not include the environmental dimension in the five non-clinical assessment domains of HTA [9].

Environmental impact could be a criteria within multiple technology appraisals, but it is not yet clear how to incorporate or assess​

Guirado-Fuentes [9] conducted a scoping review of the literature considering the inclusion of the environmental dimension into HTA processes. They identified 22 articles published between 2010 and 2022 which could be grouped under four topics: ​

  1.  Development of a theoretical framework for environmental impact inclusion in HTA. Concepts from conventional and ecological economics, such as externalities, should be considered.​
  2.  HTA reports including impact on environment as a research question. CADTH has published four such reports between 2017 and 2019. A literature review was used to determine potential impacts. ​
  3.  Development of indicators, parameters, and data sources for inclusion of environmental impacts in HTA. A low-carbon lifecycle would need to consider reduction of energy, materials, pollution and waste streams, collaboration with other enterprises, and remanufacturing of devices, equipment, and consumables.​
  4.  Economic or budget impact assessments. Three studies presenting economic evaluations incorporating environmental aspects all estimated the impact of the health technology by carbon footprint.[10] [11] [12]​

For further reading, see Toolan et al. (2023). Environmental impact assessment in health technology assessment: principles, approaches, and challenges [13].

Environmental Impact is not a key HTA/payer decision driver for now, but the growing pressure to reduce emissions is likely to move it up the health policy agenda over time​

HTA and pricing frameworks are already complicated enough; adding yet another appraisal criteria is likely to slow decision making down and make it more resource-intensive for everyone. ​

Despite this, the impact of carbonization on health outcomes and increasing pressure from Governments to reduce emissions is likely to keep moving this up the healthcare policy agenda. ​

As this happens, environmental impact may become a key consideration in decision making alongside efficacy, safety and quality of life. There may be a need to justify why a less sustainable medicine has been listed on formulary, prescribed or administered where there is a like-for-like choice. It could, in turn, start to influence the standard of care or line of treatment. And this will then start to impact market access and commercialisation strategy, as well as acquisition and partnering deals.​

For further insight, this topic could be expanded to a full literature review as there are a number of resources and thought leadership articles in the public domain on this topic. The Royal Pharmaceutical Society has published various Sustainability Policies in this area that provide further suggestions about how changes could be implemented by healthcare providers.1 McKinsey & Company also recently published an article identifying changes that MedTech and pharmaceutical companies could be making [14].

​​

†defined as components beyond health impacts to the treated individual and costs beyond those incurred by the healthcare sector to deliver those interventions. The ten consumption, economic activity, education, environment, family spill over, healthcare system capacity, housing, legal, social services , transportation.

‡ The First Panel was the basis for the seminal book by Gold  MR, Siegel  JE, Russell  LB, Weinstein  MC. Cost-Effectiveness in Health and Medicine. New York, NY: Oxford University Press; 1996.

LinkedIn post, August 2023.

Many thanks to Sharon Leadbitter for researching and clarifying the current literature reporting ​on the Environmental Impact within HTA decision making. ​

Sharon is a Market Access specialist based in Sydney Australia with over 15 years biopharmaceutical company experience. ​

If you have any questions about this review or would like to understand how FingerPost can help you build and demonstrate product value ahead of exit or launch, please contact:​

​Catherine Bacon: cbacon@fingerpostconsulting.com​

​Nick Melling: nmelling@fingerpostconsulting.com​

References

  1. Royal Pharmaceutical Society. Sustainability Policies. First published: 21 October 2021. Accessed: 22 August 2023. Available at: https://www.rpharms.com/recognition/all-our-campaigns/policy-a-z/sustainability-policy/policies​
  2. Karliner, J.; Roschnik, S. Health Care’s Climate Footprint: How The Health Sector Contributes to the Global Climate Crisis and Opportunities for Action; Climate-Smart Health Care Series; Health Care Without Harm: Washington, DC, USA, 2019.​
  3. Choi AJ. The environmental impact of healthcare, Melbourne University Pursuit 14 Nov 2022. Available at https://pursuit.unimelb.edu.au/articles/the-environmental-impact-of-healthcare (accessed 24 Jul 2023)​
  4. Breslau, R., Cohen, J., Diaz, J., Malcolm, B., & Neumann, P. A review of HTA guidelines on societal and novel value elements. International Journal of Technology Assessment in Health Care, 2023;39(1):E31. doi:10.1017/S026646232300017X​
  5. Sanders GD, Neumann PJ, Basu A, Brock DW, Feeny D, Krahn M, Kuntz KM, Meltzer DO, Owens DK, Prosser LA, Salomon JA, Sculpher MJ, Trikalinos TA, Russell LB, Siegel JE, Ganiats TG. Recommendations for Conduct, Methodological Practices, and Reporting of Cost-effectiveness Analyses: Second Panel on Cost-Effectiveness in Health and Medicine. JAMA. 2016 Sep 13;316(10):1093-103. doi: 10.1001/jama.2016.12195.​
  6. Roberts MS. The Next Chapter in Cost-effectiveness Analysis. JAMA. 2016;316(10):1049-1050. doi:10.1001/jama.2016.12844​
  7. Carias C, Chesson HW, Grosse SD, Li R, Meltzer MI, Miller GF, Murphy LB, Nurmagambetov TA, Pike JJ, Whitham HK. Recommendations of the Second Panel on Cost Effectiveness in Health and Medicine: A Reference, Not a Rule Book. Am J Prev Med. 2018 Apr;54(4):600-602. doi: 10.1016/j.amepre.2017.11.013.​
  8. HTAi Glossary. Available at http://htaglossary.net/health+technology+assessment (accessed 20/7/23) ​
  9. Guirado-Fuentes, C.; Abt-Sacks, A.; Trujillo-Martín,M.d.M.; García-Pérez, L.; et al. Challenges of Incorporating Environmental Impacts in the Economic Evaluation of Health Technology Assessment: A Scoping Review. Int. J. Environ. Res. Public Health 2023, 20, 4949. https://doi.org/10.3390/ijerph20064949​
  10.  Smith, A.J.B.; Tennison, I.; Roberts, I.; Cairns, J.; Free, C. The carbon footprint of behavioural support services for smoking cessation. Tob. Control 2013, 22, 302–307​
  11.  Marsh, K.; Ganz, M.; Nørtoft, E.; Lund, N.; Graff-Zivin, J. Incorporating Environmental Outcomes into a Health Economic Model. Int. J. Technol. Assess. Health Care 2016, 32, 400–406​
  12.  Ortsäter, G.; Borgström, F.; Soulard, S.; Miltenburger, C. A Budget Impact Model to Estimate the Environmental Impact of Adopting RESPIMAT® Re-usable in the Nordics and Benelux. Adv. Ther. 2019, 36, 3435–3445​
  13.  Toolan M, Walpole S, Shah K, Kenny J, Jónsson P, Crabb N, Greaves F. Environmental impact assessment in health technology assessment: principles, approaches, and challenges. Int J Technol Assess Health Care. 2023 Feb 23;39(1):e13. doi: 10.1017/S0266462323000041.​
  14. Fernandez M, Perez L. Accelerating the transition to net zero in life sciences. McKinsey & Company. Published: 11 August 2023. Accessed: 22 August 2023. Available at: https://www.mckinsey.com/industries/life-sciences/our-insights/accelerating-the-transition-to-net-zero-in-life-sciences?cid=eml-web.​