EUROPEAN COMMISSION Brussels, 31.1.2018 SWD(2018) 41 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Strengthening of the EU Cooperation on Health Technology Assessment (HTA) Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on health technology assessment and amending Directive 2011/24/EU {COM(2018) 51 final}

{SWD(2018) 42 final}



1. Introduction 1.1. Context 1.2. What is HTA? 1.3. The role of HTA 1.4. State of play 1.4.1. HTA in the Member States 1.4.2. HTA at EU level 1.5. Political context 1.6. International outlook 2. Problem definition Problem 1. Impeded and distorted market access Problem 2. Duplication of work for national HTA bodies Problem 3. Unsustainability of HTA cooperation 3. Why should the EU act? 4. Policy objectives 5. Policy options 5.1. Discarded policy option 5.2. Key characteristics of the policy options 5.3. Description of the policy options

5.3.1. Policy option 1 (Baseline scenario). No Joint Actions after 2020 5.3.2. Policy option 2. Project-based cooperation on HTA activities 5.3.3. Policy option 3. Permanent cooperation on common tools, procedures and early

dialogues 5.3.4. Policy option 4. Permanent cooperation on common tools, procedures, early

dialogues and joint REA 6. Impacts of the policy options Policy option 2. Project-based cooperation on HTA activities 6.1.1. Economic impacts 6.1.2. Social impacts 6.2. Policy option 3. Permanent cooperation on common tools, procedures and early

dialogues 6.2.1. Economic impacts 6.2.2. Social impacts 6.3. Policy option 4. Permanent cooperation on common tools and procedures, early

dialogues and joint REA 6.3.1. Economic impacts 6.3.2. Social impacts 6.4. Analysis of the governance structure and financing system 6.4.1. Description of the governance arrangements 6.4.2. Feasibility and efficiency of the governance arrangements 6.4.3. Input from studies and stakeholders on the feasibility and efficiency of the

governance arrangements 6.4.4. Costs related to the governance arrangements 7. Comparing policy options

8. Preferred policy option 8.1. Description of the preferred option 8.1.1. Joint outputs 8.1.2. Technology scope 8.1.3. Instrument 8.1.4. Governance and financing 8.2. Justification of the preferred option 8.3. Implications for Member States and other stakeholders 9. Monitoring and Evaluation



ANNEXES TO THE IMPACT ASSESSMENT: Annex I. Procedural Information Annex II. Stakeholder Consultation: Synopsis Report Annex III. Who is Affected by the Initiative Annex IV. Analytical Models Annex V. Health Technology Sectors Annex VI. European Cooperation on HTA Annex VII. International Outlook Annex VIII. Earlier Market Access Calculations

Annex IX. Implementation Mechanisms and Policy Options Annex X. Costs of Joint Outputs and Overall Costs per Policy Option and Implementation Mechanisms Annex XI. Implementation Tables for Preferred Policy Option STUDIES CONDUCTED TO SUPPORT THE IMPACT ASSESSMENT Accessible online at: https://ec.europa.eu/health/technology_assessment/policy_en Mapping of HTA National Organisations, Programmes and Processes in EU and Norway. 2017, Contract nr. 17010402/2016/734820, ISBN: 978-92-79-77080-7 Mapping of HTA Methodologies in EU and Norway. 2017, DG SANTE Contract nr. 17010402/2016/736040, ISBN: 978-92-79-77074-6 Study on Impact Analysis of Policy Options for Strengthened EU Cooperation on HTA. 2017. Sogeti, Austrian Public Health Institute, London School of Economics. (CHAFEA/2016/Health/16), ISBN: 978-92-79-73966-8



ABBREVIATIONS CHAFEA Consumers, Health, Agriculture and Food Executive Agency ED Early dialogue EFPIA European Federation of Pharmaceutical Industries and Associations EMA European Medicines Agency EUnetHTA European Network for Health Technology Assessment EURORDIS Rare Diseases Europe GÖG Austrian Public Health Institute / Gesundheit Österreich Forschungs- und Planungs GmbH HTA Health Technology Assessment ICT Information and Communication Technology IVD In Vitro Diagnostics JA Joint Action LSE London School of Economics OECD Organisation for Economic Co-operation and Development POP EUnetHTA Planned and Ongoing Projects database RCT Randomised controlled clinical trials REA Relative Effectiveness Assessment SEED Shaping European Early Dialogues for health technologies SMEs Small and Medium Enterprises WHO World Health Organization



GLOSSARY Term or acronym Meaning or definition Additional data generation Refers to the generation of additional clinical evidence in the course of an HTA process and includes all studies and provision of data in addition to the clinical studies carried out for the purpose of obtaining marketing authorisation. Appraisal Refers to the drawing of conclusions on added value on the basis of the scientific evidence presented in the HTA report, in order to inform pricing and reimbursement decisions. Clinical Trials Clinical trials as defined in Regulation (EU) 536/2014 Clinical assessment See 'REA' below Domains Refer to the areas of assessments covered by the HTA Core Model®. Four are clinical domains (i.e. health problem and current use of technology; description and technical characteristics of the technology; safety; clinical effectiveness) and five are non-clinical (cost and economic evaluation; ethical analysis; organisational aspects; patient and social aspects; legal aspects). (EUnetHTA) Early dialogue (see also 'Parallel scientific advice/early dialogue' below) An early dialogue allows input from HTA bodies on the development of the health technology. It focuses on development strategies and not on pre-evaluation of data. The advice is prospective in nature (advice on on-going trials is out of scope). Early dialogues can be requested during the initial clinical development phase of the technology. For pharmaceuticals, it should ideally be requested at the end of the phase II to discuss the content of the planned Phase III i.e. planned confirmatory trial(s) and the economic rationale. The objective of an early dialogue is to reduce the risk of inadequate data when products are presented for evaluation with the aim of reimbursement by national health insurance.

(SEED project) EUnetHTA The European Network for Health Technology Assessment is a Joint Action, co–funded by the Health Programme of the European Commission (DG SANTE) and other participating actors. It gathers mainly national and regional HTA bodies and also organisations using HTA to support decision making. Its scope of activities is on scientific and technical issues. (See Annex VI for more details on EUnetHTA's activities) EUnetHTA joint work Activities in which countries and/or organisations work together in order to prepare shared products or agreed outcomes. These may include, for example, literature reviews, structured information for rapid or full HTAs, early dialogues or scientific advice on R&D planning and study design. Joint work aims at supporting Member States in providing objective, reliable, timely, transparent, comparable and transferable information and enables an effective exchange of this information. (HTA Network) Economic assessment The comparative analysis of the costs and consequences of two or more possible options. Depending on whether the consequences are expressed as monetary, physical or qualitative variables, the analysis may be a cost-benefit, cost-effectiveness or cost-utility analysis.

(HTA Glossary.net) Efficacy The extent to which an intervention does more good than harm under ideal circumstances, e.g. in a controlled clinical trial. (High Level Pharmaceutical Forum, 2005 – 2008. Final Report) Effectiveness The extent to which an intervention does more good than harm when provided under the usual circumstances of health care practice. (High Level Pharmaceutical Forum, 2005 – 2008. Final Report) Emerging health technology A (new) health technology that has not yet been adopted within the healthcare system.

Note: pharmaceuticals in the Phase II or III clinical trial, or pre-launch stage; medical devices are in the pre-marketing stage. Full HTA A health technology assessment covering not only the clinical domains (i.e. REA), but also other non-clinical domains: cost and economic analysis, ethical analysis, organisational aspects, patient and social aspects, as well as legal considerations. Health technologies Health technologies refer to a pharmaceutical, a medical technology or medical and surgical/radiation procedures as well as measures for disease prevention, diagnosis or treatment used in healthcare (Directive 2011/24/EU). Health technology assessment (HTA) Health technology assessment (HTA) is a multidisciplinary process that summarises information about the medical, social, economic and ethical issues related to the use of a health technology in a systematic, transparent, unbiased, robust manner. Its aim is to inform the formulation of safe, effective, health policies that are patient focused and seek to achieve best value. (EUnetHTA) HTA Core Model The HTA Core Model is a methodological framework for collaborative production and sharing of HTA information. It consists of three main components: ·The HTA ontology contains an extensive list of generic questions that can be asked in an HTA. The ontology also identifies relations between the questions ·Methodological guidance helps researchers in finding answers to the questions defined by the ontology. It recommends the use of already existing, generally recognised guidance and guidelines along with other methodological recommendations and requires transparency on the methods used when applying the HTA Core Model ·A common reporting structure for presenting findings in a standardised "question-answer pair" format The Guiding Principles on the HTA Core Model Use provides the basic principles on the Model's utilisation in various settings (EUnetHTA). HTA methodologies Should be understood as scientific and technical methodologies applied by HTA institutions or groups of HTA researchers in the collection, analysis and synthesis of evidence and information on health technologies and their use in healthcare to inform decision making. HTA Network It is a voluntary Network set up under Article 15 of Directive 2011/24. It gathers mainly Ministries of Health or competent authorities responsible for HTA, appointed by Member States. Its scope of activities is on strategic issues. The HTA Network works in synergy and complementarity with the Joint Action(s) EUnetHTA, which provides to the Network the technical and scientific expertise to foster EU cooperation on HTA. Horizon scanning The systematic identification of health technologies that are new, emerging or becoming obsolete and that have the potential to effect health, health services and/or society.

(HTA Glossary.net) Joint actions Are collaborative projects specific to the Health Programme aiming to develop / share / refine / test tools, methods and approaches to specific issues or activities, and engage in capacity building in key areas of interest for the Member States and countries participating to the Programme. They are co-financed by the European Commission and authorities of the Member States. This type of project was introduced during the 2nd Health Programme (2008-2013) and continues under the current one (2014-2020). Joint output In this Impact Assessment, the term "Joint output" is used as an umbrella term to cover any result of joint work in the context of the EU cooperation. In particular it includes:

(1) “Technology Specific Reports" produced through cooperation (Joint Early Dialogues, Joint Rapid Relative Effectiveness Assessments, Joint Full Health Technology Assessments);

(2) “Common tools and procedures” essential for the cooperation, including IT tools enabling exchanges and data gathering (methodologies (e.g. EUnetHTA Core Model and Standard Operating Procedures/SOP), horizon Scanning, submission templates and templates for other key documents, training materials and other capacity building activities). Joint reports "Joint reports" refer to REA and/or full HTA reports carried out jointly by Member States HTA bodies according to jointly agreed HTA methodologies and procedures. Market launch Occurs for medicinal products after a market authorisation has been granted (either at EU level or national level) and, for medical technologies (i.e. medical devices, in vitro diagnostics), once the CE marking is in place. It normally happens at Member State-level following the conclusion of pricing and reimbursement negotiations or when these are at an advanced stage. Market launch can subsequently occur in other Member States. Medical Technologies Medical devices and in vitro diagnostics as defined by Regulation (EU) 2017/745 and Regulation (EU) 2017/746 respectively Multiple Technology Assessments (MTA) Multiple Technology Assessments are assessments which cover more than one technology, or one technology for more than one indication (cf. NICE technology appraisal guidance) National uptake "National uptake" means that the joint output is used in national decision making process (i.e. in the same way as an output carried out at national level) and the joint activity is not duplicated (i.e. re-done) by HTA bodies at national/regional level. Currently the term is mainly used in the context of EUnetHTA output (i.e. joint assessments, submission templates, guidelines, POP Database, HTA Core Model®, etc.) where it refers to the general implementation of a joint output in a local/national HTA setting. Other health technologies Other health technologies refer to interventions that typically involve the use of pharmaceuticals, medical devices or diagnostics, but are characterised by additional layers of complexity (e.g. use of one or more technologies in the context of a medical procedure, or a vaccination or screening programme). Parallel scientific advice/early dialogue (see also 'early dialogue' above) It refers to the parallel/simultaneous scientific advice given by regulators and HTA bodies to medicine developers on the appropriate tests and studies to be carried out during the development of a new medicine. It started as a pilot project in 2010 by the EMA. As of July 2017 EMA offers consultations in parallel with EUnetHTA in order to allow medicine developers to obtain feedback from regulators and HTA bodies on their evidence-generation plans to support decision-making on marketing authorisation and reimbursement of new medicines at the same time. Priority setting The assignment of an order of priority based on explicit or implicit criteria for selection of health technologies for assessment. (HTA Glossary.net) Planned and Ongoing Projects (POP) Database The POP database was set up by the EUnetHTA Joint Action and allows HTA agencies to share information with each other on planned and on-going projects conducted at the individual agency. The aim of the database is to reduce duplication and facilitate collaboration among HTA agencies. Relative Effectiveness Relative effectiveness can be defined as the extent to which an intervention does more good than harm compared to one or more intervention alternatives for achieving the desired results when provided under the usual circumstances of health care practice (High Level Pharmaceutical Forum 2005-2008, European Commission DG Enterprise & Industry and DG Health & Consumers) Rapid Relative Effectiveness Assessment (REA) The Rapid Relative Effectiveness Assessment (REA) covers and is limited to the clinical domains and measures the medical/therapeutic added value of a technology. It is also called clinical assessment. SEED "Shaping European Early Dialogues for health technologies" was a project running from 2013 to 2015, financed by the European Commission for conducting pilots on early dialogues with health technology developers (pharmaceuticals and medical devices) by participating HTA bodies. The work was carried out based on experience from and in synergy with the EUnetHTA Joint Action 2. In total, eleven early dialogues were carried out are planned with an aim to conduct 7 on medicinal products and 3 on medical devices. Single Technology Assessment (STA) Single Technology Assessment is an assessment of a single technology for a single indication (NICE technology appraisal guidance)





1.Introduction 1.1. Context The rapidly evolving health technology market provides important opportunities to improve public health by delivering better outcomes for patients and society as a whole. The health technology market is also a key driver of economic growth and innovation in the Union. Pharmaceuticals and medical technologies are two large sectors of the Union’s health technology market, contributing significantly and steadily to growth and job creation, even in years of slower economic development. (For more information on these sectors, see Annex V). At the same time, in the EU, the total (public and private) health care expenditure amounts to around EUR 1 300 billion per annum (including EUR 220 billion for pharmaceuticals and EUR 110 billion for medical technologies). Health care expenditure thus accounts on average for approximately 10% of EU GDP. This expenditure is likely to increase in the coming years, given inter alia Europe’s ageing population, the increase of chronic diseases, and the expected introduction of complex new technologies. , Simultaneously, Member States are increasingly confronted with budgetary constraints which will require them to further improve the efficiency of their health care systems in order to ensure the maximum benefit for individual patients and public health in general. In order to address the above mentioned challenges and opportunities and to balance various interests, health technology assessment (HTA) has become an increasingly important tool used to assist Member States in creating and maintaining sustainable health care systems and to stimulate innovation that delivers better outcomes for patients and cooperation is ongoing at EU level. This Impact Assessment has aimed to investigate opportunities for strengthening EU cooperation on HTA, building on its achievements and addressing its shortcomings. 1.2. What is HTA? In this Impact Assessment report, HTA is defined as "a multidisciplinary process that summarises information about the medical, social, economic and ethical issues related to the use of a health technology in a systematic, transparent, unbiased, robust manner. Its aim is to inform the formulation of safe, effective health policies that are patient focused and seek to achieve best value". The term ”health technology” is to be understood in a broad sense comprising pharmaceuticals, medical technologies (medical devices and in vitro diagnostics) and other technology-based tools for disease prevention, diagnosis or treatment used in healthcare. HTA is thus an evidence-based process that independently and objectively assesses a (new or existing) technology and compares it to other/existing ones. A HTA can cover different aspects (domains) ranging from clinical domains (e.g. safety, clinical effectiveness) to non-clinical domains (e.g. economic, ethical, organisational etc.) (see Figure 1 ). Broadly speaking two types of assessments can be distinguished: (1) the Rapid Relative Effectiveness Assessment (REA) which covers the clinical domains and evaluates the medical/therapeutic added value of a technology; and (2) the full HTA, which also includes other domains (e.g. cost-effectiveness). Whilst clinical assessments (REA) are often based on global evidence (e.g. global clinical trials in the case of pharmaceuticals), full HTA assessments include domains that are more sensitive to national/regional contexts. 1.3. The role of HTA Before new health technologies are placed on the market, they are evaluated for their quality, safety and efficacy (marketing authorisation of pharmaceuticals) or safety and performance (CE marking of medical devices). While HTA builds on the evidence used for these assessments, it focuses specifically on the potential benefits of a new health technology in comparison to the existing standard of care in the health system. The box below discusses the differences between marketing authorisation and HTA in more detail, including the added value of HTA. Market access pathways for health technologies and relevant EU legislation are described in detail in Annex V. Differences between marketing authorisation and the clinical part of HTA (example of pharmaceuticals) Marketing authorisation and HTA have different remits and answer different questions, even if they base their answers on some common evidence (e.g. pivotal clinical trials, typically phase III trials). Marketing authorisation assesses the quality, safety and efficacy of an individual product. A marketing authorisation is granted if a new product has a positive benefit-risk ratio in the sense that it is efficacious and its safety profile is acceptable. It is not within the remit of the marketing authorisation to determine the existing standard of care and to conduct a comparative assessment of the new product against alternative products reflecting the standard of care. By contrast, the clinical part of HTA (REA) assesses the added clinical value of a product, i.e. its relative effectiveness and relative safety compared to one or more existing products (or other health interventions) reflecting the standard of care. HTA therefore reviews and uses a broader evidence base than the assessment for marketing authorisation: First of all, the evidence base on existing products/interventions needs to be reviewed in order to determine the current standard of care. Subsequent steps of the HTA process analyse in how far the pivotal clinical trials submitted for marketing authorisation purposes cover the full spectrum of the standard of care. Frequently, these trials include one comparator, while the standard of care includes more than one alternative pharmaceutical/intervention. HTA will therefore review additional studies on other relevant pharmaceuticals/interventions and consider whether and how this additional evidence can be assessed (e.g. via indirect comparisons or network meta-analysis approaches). Moreover, HTA aims to understand relative effectiveness under the conditions of usual clinical practice (rather than under the ideal conditions of a controlled trial). Therefore, relevant data sources for the clinical part of HTA go beyond the initial pivotal clinical trials and also include observational (“real world”) data from clinical practice (e.g. disease-specific patient registries, health data recorded by health services and insurances). When HTA is conducted around the time of or shortly after marketing authorisation, some limited effectiveness data may already be available (e.g. from early access schemes in some EU Member States, or from another jurisdiction such as the U.S. where the product was licensed earlier). Even if relative effectiveness data from clinical practice are not yet available, HTA may use modelling approaches to predict relative effectiveness based on efficacy data from pivotal trials. At later points in time (HTA re-assessments), relative effectiveness assessments can typically draw on increasing sources and amounts of data from clinical practice.

Finally, the clinical part of HTA differs from the assessment for marketing authorisation in the way that patient subgroups are considered and analysed. HTA aims to consider all patient subgroups that are relevant for clinical practice (whether or not they may have been included and analysed in the pivotal clinical trials for marketing authorisation purposes). To this end, HTA first considers whether the existing standard of care differs for different patient subgroups within a particular therapeutic indication. HTA then assesses whether and how the added value of the new pharmaceutical differs by patient subgroup. It is also important to underline that HTA does not comprise pricing and reimbursement decisions. However, HTA can substantially contribute to the sustainability of health systems by providing scientific evidence/input for national decision-making on pricing and reimbursement. The link between HTA and the decision on pricing and reimbursement is currently more pronounced in the case of pharmaceuticals than for medical technologies (medical devices and in vitro diagnostics) and other health technologies (e.g. complex interventions). For pharmaceuticals, pricing and reimbursement decisions are typically taken at national/central level at times of market launch (or shortly thereafter), whereas for medical and other health technologies such decisions are often taken in a more decentralised manner, e.g. through local (hospital level) decisions or procurement processes, with more limited input from HTA reports. However, there is a growing trend towards applying HTA to support decision-making also for medical technologies and other health technologies, including the development of HTA methods and processes adapted to the specificities of these technologies., Figure 2 shows a schematic overview of the HTA step in the market access pathways for pharmaceuticals and medical technologies. For further details, see Annex V. Pharmaceuticals Medical devices and in vitro diagnostics It should also be noted that in addition to informing national/local pricing and reimbursement decision, HTA supports the development of evidence-based clinical guidelines (for diagnosis and treatment of patients in particular therapeutic areas) and thus promotes evidence-based healthcare. Finally, HTA is applied to both new technologies coming to the market and to technologies which have been in use in healthcare for some time, i.e. it informs (dis)investment decisions for new and existing health technologies. HTA thus helps to prioritise health technologies with high added value and to de-prioritise technologies with no or limited additional benefits (lower prices, disinvestment, and discontinued use). In summary, HTA can facilitate evidence-based decision-making and efficient allocation of resources in healthcare, ultimately supporting the optimisation of national healthcare systems. Some individual studies offer a certain level of insight on the potential role of HTA in terms of economic benefits.,, A recent study from the UK, focusing on 10 HTAs reached the conclusion that a potential benefit of approximately GBP 3.0 billion/year could be achieved in the UK if the recommendations from HTA reports were fully followed. Another study from Austria found that for medical technologies in hospitals, HTA led to more reasonable investments and saved several million euros at the level of a single hospital association. In the lower income countries, HTA is particularly important as these Member States have more limited financial resources and the health status of their populations also tends to be lower. A well-functioning HTA system also improves business predictability for industry and creates and maintains a stimulus for innovation., A predictable HTA system which rewards innovations with added value for patients can influence longer-term R&D investment decisions by industry and thus play an important role in incentivising innovation for the benefit of patients. In particular, it can help to steer industry resources towards the development of products that address unmet medical needs and significantly improve health outcomes for patients. HTA can also contribute to greater transparency and has the potential to improve the involvement of key stakeholders, such as patients and health professionals. Patients' input is particularly relevant for assessing which treatment options improve their health-related quality of life. In the Open Public Consultation carried out by the Commission addressed to citizens, the majority of the respondents (98%) indicated that they consider HTA useful for decision making (see Annex II). 1.4. State of play 1.4.1.HTA in the Member States In the last 20 years, all Member States have started to introduce HTA processes at national or regional level (i.e. with 51 HTA bodies established in 26 Member States). There are national legal frameworks for HTA in place in 26 Member States and Norway; some Member States are only at the initial phase of establishing HTA systems and/or have dedicated only limited resources to HTA. Whilst there is some convergence in national HTA systems there are also significant discrepancies. A summary of these discrepancies is set out below. For further information see Annexes VIII, IX and X. (a) Main differences in the procedural framework 1) The national HTA systems differ in the scope of health technologies that are being assessed. Whilst the majority of Member States and Norway report national HTA activity for pharmaceuticals, two Member States have no such activities, but are in the process of developing their national HTA systems. 20 Member States and Norway indicate having an HTA system for medical devices (with five of these countries stating that it has not been formalised yet). 17 Member States and Norway indicate that they have an HTA system for other technologies, whilst the remaining countries do not carry out such assessments. 2) National HTA organisations also differ in terms of tasks allocated. The main role of most HTA organisations is to carry out assessments and provide recommendations for decision making (i.e. pricing and reimbursement decisions). In addition to this main role, some HTA bodies develop quality standards (12 Member States and Norway) and/or clinical guidelines (14 Member States and Norway), perform horizon scanning (10 Member States and Norway), manage registries (11 Member States and Norway), or offer early dialogues/scientific advice to health technologies developers (12 Member States and Norway). 3) Concerning the resources available in the national HTA organisations, the study mapping on HTA processes across the EU reveals that there are significant differences between MS. In particular, the number of staff ranges from no human resources being dedicated to HTA activities (one Member State), to departments with less than 10 full-time equivalents (FTEs) (seven Member States), to countries with more than 100 FTEs (four Member States) with a maximum of 600 FTEs (one Member State). The available expertise of the core staff also varies between HTA organisations. As regards financing, HTA organisations from 26 EU Member States and Norway are public bodies, most of them being financed from public money (annual budget allocated from governments). A combination of budget and service fees directly received from industry is reported by five Member States. The data provided by 26 HTA bodies show that the annual budget allocated to HTA varies from no specific budget (one Member State) or Member States with up to EUR 100 000 (four Member States) to Member States with more than EUR 1 million (nine Member States and Norway), with a maximum of EUR 70 million (one Member State). It has to be noted that the cost of one HTA report varies considerably. In the survey conducted by the GÖG-LSE study, the cost of an HTA (single technology assessment) reported by HTA bodies ranged from EUR 4 000 to EUR 135 000. This reflects differences in the resources available to different HTA bodies, but also factors such as the scope and depth of the assessment (e.g. how much an HTA body invests into conducting its own analysis to evaluate and contextualise the evidence generated by industry). 4) In many Member States, HTA bodies consider a dossier submitted by industry in their assessments. For pharmaceuticals, 20 Member States reported that they carry out a review of an industry submission of evidence. The extent of this review varies among HTA bodies and can cover aspects such as missing evidence, errors in submitted evidence, internal and external validity, as well as additional evidence analyses produced by the HTA body itself (e.g. based on the scientific literature or clinical study registers). For medical technologies only 9 out 21 Member States reported that they review industry submissions, i.e. a greater proportion of Member States carry out their own standalone assessments.

5) As regards the type of assessments, all Member States carry out single technology assessments (STA) (i.e. an assessment of a single technology compared with the standard of care) and 13 Member States perform multiple technology assessments (MTA) (e.g. an assessment of several technologies in use for a particular clinical indication). For pharmaceuticals most of the Member States apply a single technology assessment (STA). Six Member States and Norway indicate performing both STAs and MTAs. For medical technologies, seven Member States and Norway indicate carrying out STAs and MTAs, whilst only six Member States report carrying out only STAs for medical devices. 6) The number of assessments produced varies considerably between countries. The mapping study of HTA procedures across Europe showed that the number of assessments carried out by HTA bodies (single technology assessments of pharmaceuticals, medical and other health technologies) ranged from about 5 HTA per year to up to 390 HTA per year. For pharmaceuticals, some HTA bodies assess all new products (including generics, biosimilars) and all licence extensions (including minor variations) of existing products. However, given current national working practices, pharmaceutical topics that are most likely to be assessed by many Member States across the EU are products with new active substances requiring central marketing authorisation and major licence extensions of existing products. For medical devices, the number of assessments performed annually is lower than for pharmaceuticals across all EU countries. Innovative medical technologies with potentials to transform the organisation of care (“transformative technologies”) and medical technologies subject to the scrutiny mechanism are most likely to be covered in national assessments. 7) According to a survey of HTA bodies, the time needed to complete a health technology assessment process (single technology assessment, from topic selection/identification to delivery of HTA results) ranges from a few weeks to more than a year. For pharmaceuticals assessments based on industry submissions, the time from industry submission to completion of the review ranges from less than 10 days to up to 200 days across HTA bodies, although the majority of HTA bodies complete their review within 2-3 months. In general the timeframes for the assessment of medical technologies are longer than those for pharmaceuticals across Member States. 8) There are also differences across EU Member States in the starting point of the HTA process. Figure 3 illustrates HTA timelines for pharmaceuticals in different EU Member States compared with the EU marketing authorisation timeline (EMA process). The figure shows that depending on the Member State, HTA reports can be published after or at the time of the last step of the marketing authorisation, while the HTA preparatory process can already start in parallel . However, in reality, HTA often takes place later, because HTA submissions by industry are typically not initiated simultaneously or at the earliest possible dates in all countries. 9) Another important aspect refers to stakeholders' involvement (patients, healthcare providers, payers, etc.) throughout the HTA process which varies from country to country (for further details, see Mapping study on HTA processes). It should be noted that even within the Member States indicating that they engage stakeholders, there are significant differences in the level of involvement, with stakeholders being consulted in one or more or all of the steps of their HTA processes. In general for pharmaceutical assessments stakeholder involvement is greatest towards the end of the assessment process when the assessment is reviewed and advice/decision is made. For medical technologies there is greater stakeholder involvement in the earlier stages (e.g. scoping, production of the assessment) than for pharmaceuticals, and less involvement in the advice and decision making steps. (b) Main differences in methodologies There are also divergences in the methodologies used by different HTA bodies when assessing the evidence produced by technology developers. For example, HTA bodies can take different methodological approaches when assessing the acceptability of particular types of studies and study design issues such as the comparator used, endpoints measured, the type of patients enrolled and the duration of the study. 1) The choice of a comparator is decisive in any health technology assessment.A recent study mapping HTA methodologies in EU Member States and Norway showed that there are commonalities but also differences in the criteria used for choosing a comparator. For example, when assessing pharmaceuticals: - 25 HTA bodies consider both whether the comparator reflects current healthcare practice and whether its use is supported by evidence on its efficacy and safety, while 7 HTA bodies consider only healthcare practice and 4 only the evidence base. - 27 HTA bodies accept different technologies (i.e. also medical technologies and other technologies) as possible comparators in a pharmaceuticals assessment, whilst 10 HTA bodies compare pharmaceuticals only to other pharmaceuticals. - 6 HTA bodies do not accept indirect comparisons, whilst a large majority (i.e. 40 HTA bodies) accepts such comparisons. The process for choosing the comparator may also differ, for example the extent to which proposals by the manufacturer or input from medical societies/healthcare professional organisations are considered. A similarly heterogeneous picture can be described for the selection of the comparator when assessing medical and other technologies. In this regard, 20 HTA bodies reported using as a comparator a technology likely to be replaced by the assessed technology if proven inferior but also the comparator supported by evidence of its efficacy and safety profile. Six HTA bodies reported using only the first type of comparator, whilst 4 other HTA bodies stated using only the second one. Two HTA bodies informed that other criteria area also used when choosing the comparator for assessing these categories of health technologies 52. However, there is scope for cooperation; in the GÖG-LSE case studies, in 68% of the cases, the comparator included was the same across HTA bodies. Moreover, it should also be highlighted that, as noted in the study mapping HTA methodologies, HTA is closely linked to the broader field of evidence-based medicine (EBM). Many developments in EBM are already taking place at European level (e.g. development of evidence-based clinical guidelines by European-level medical/scientific societies) or international level. HTA bodies will thus be increasingly able to draw on European-level or even international guidance when considering the evidence-based standard of care. 2) Furthermore, HTA bodies have different methodological approaches with regard to certain health outcomes and outcome measures. For example, a minority of HTA bodies does not accept surrogate endpoints (one HTA body), composite endpoints (nine HTA bodies) or patient-reported outcomes (e.g. questionnaires on health-related quality of life) (10 HTA bodies).44 3) Another important difference in methodology relates to the type of evidence/studies accepted by HTA bodies. Whilst the gold standard for all HTA bodies is randomised controlled clinical trials (RCTs) and a small minority of HTA bodies (4) accept only RCTs, the large majority of HTA bodies accept also other types of studies (e.g. observational studies) 44. Case studies conducted in the context of the GÖG-LSE Study confirmed the differences but also highlighted a tendency towards common methods in assessing products, which shows the scope for cooperation. In particular the primary clinical trials considered were generally the same type. , ,

The diversity of approaches related to HTA methodology in the EU Member States is confirmed by the input to the public consultation from both pharmaceutical and medical technologies industry and described in section 2. Regional cooperation on HTA While this Impact assessment is being prepared some groups of countries have started to develop stronger regional cooperation. Typically, this type of cooperation brings together neighbouring Member States with similar socioeconomic situation, with the overall objective of addressing the challenge of ensuring access to innovative technologies through possible joint economic assessments, joint price negotiations and joint procurement. The BENELUXA, la Valletta cooperation, the Nordic countries and the Visegrad cooperation are examples of such regional cooperation recently set up (the first one about 18 months ago, the most recent formalised its terms of references only a few weeks ago). The objectives of the regional cooperation are different from the EU cooperation on HTA, which excludes pricing and reimbursement. However, the tools and procedures developed by EUnetHTA are being used to perform joint assessments. To date only BeNeLuxA has produced few Joint assessments and La Valletta is in the process of identifying the technologies to assess in the coming months. Regional initiatives are also referred to in section(s) 5.2.1 and 6.1.1. 1.4.2. HTA at EU level At EU level, the value of HTA and the fact that joint work could facilitate the implementation of HTA processes and reduce redundancies regarding the assessment of technologies has been recognised. Already in the 1980s, the Health Services Research Committee of the European Commission began to assign contracts for economic appraisals and mechanisms for the regulation of expensive health technologies in different countries. Between 1993 and 2002 three projects were funded by the European Commission to support collaboration on HTA between Member States. In 2004, the European Commission and Council of Minsters requested the establishment of a sustainable European network on HTA. This was initiated in 2005 when a group of 35 organisations started the EUnetHTA project, which explored possibilities and key challenges for an enhanced transnational collaboration for the following years. Since then, to support cooperation between HTA bodies, the European Commission has made substantial investments.Two Joint Actions (EUnetHTA JA) have been carried out together with a number of projects: (1) EUnetHTA 1 from 2010-2012 (budget EUR 6 million) and (2) EUnetHTA 2 from 2012-2015 (budget EUR 9.5 million). A third Joint Action (EUnetHTA 3 - budget EUR 20 million) was launched in June 2016 and runs until 2020. Participation in the Joint Actions has been very high and the latest Joint Action has more than 80 members from all Member States and a number of observers from Member States, Norway and Switzerland The primary objective of the Joint Actions is scientific and technical cooperation, more precisely to develop common methodologies, pilote and produce joint REA and full HTA reports, and to develop common ICT tools. The Joint Action partners also piloted so called early dialogues (i.e. a mechanism via which HTA bodies provide scientific advice to health technology developers on the design of clinical trials – typically phase III or pivotal trials - with a view to encouraging the generation of evidence that better meets the needs of HTA agencies). All these activities in which HTA bodies prepare shared products/agreed outcomes are referred to as “joint output”. More precisely, EUnetHTA 1 and 2: - developed the HTA Core Model as a methodological framework for assessments, databases for exchanging information (e.g. Planned and On-going Projects (POP) database allowing for sharing of information on planned and on-going assessments in the Member States) and - delivered a number of outputs, including 13 clinical assessments/REAs (7 on pharmaceutical and 6 on non-pharmaceutical technologies such as medical devices), 5 Full HTA reports, 11 Early dialogues, 14 methodological guidelines, as well as common evidence submission templates for pharmaceuticals and medical devices. The ongoing Joint Action EUnetHTA 3 has planned to scale up the joint outputs, and aims to deliver by the end of 2020 approximately 80 joint assessments and up to 35 early dialogues. However, as the Joint Action 3 has so far only produced a small number of assessments, it is currently uncertain if project will be able to deliver the target number of 80 joint assessments. In addition, the importance of HTA cooperation at EU level is emphasised in Directive 2011/24/EU on the application of patients’ rights in cross-border healthcare, which states that 'cooperation in the evaluation of new health technologies can support Member States through economies of scale and avoid duplication of effort, and provide a better evidence base for optimal use of new technologies to ensure safe, high-quality and efficient healthcare'. To further strengthen the technical cooperation between HTA bodies, the Directive provides for the establishment of a network connecting national authorities or bodies responsible for HTA (HTA Network). Such a Network was set up in 2013 to provide strategic guidance and policy orientation for the scientific and technical cooperation., While participation in the Network is voluntary, all Member States have applied for membership and participate. The HTA Network develops policy papers and discusses areas of potential collaboration, which are then implemented by the Joint Action, in accordance with its work plan. The current cooperation model described above, in particular the Joint Actions as an instrument to implement cooperation on HTA at scientific and technical level, is meant to develop/share/refine/test tools, methods and approaches for specific issues or activities and involve a degree of capacity-building. In this respect the EUnetHTA Joint Actions have been successful, as outlined by the Mid-term evaluation of the Public Health programme. Their usefulness has mainly been associated with an increased level of trust between HTA bodies and stakeholders involved; increased knowledge of working procedures and methodologies in Member States and capacity building and sharing of best practices (see report on the public consultation). On the other hand, the current cooperation model has demonstrated important shortcomings including: ·Delays. The current Joint Action has started with significant delays, due to a complex and long negotiation process between the high number of beneficiaries and the funding Agency. The process from the evaluation to the signature of the contract lasted nearly one year. The late start was further aggravated by implementation challenges due to non-delivery by certain beneficiaries and/or misunderstandings between beneficiaries of the task(s) at stake. One important example is the delay in securing an efficient and reliable IT infrastructure which would enable the cooperation to function. ·Changes in Human Resources. During and after the negotiation process some beneficiaries which had agreed to take up important responsibilities and had been allocated corresponding resources, have undergone reorganisations leading to changes in priorities. This has caused dramatic decrease in the expertise and human resources which were expected to be available from that beneficiary. While funding was available to recruit the necessary staff, changes in priorities of the beneficiary organisation prevented the recruitment. To date, after more than 12 months from the start of the Joint Action, organisations leading key workplaces have not yet a full team with the relevant expertise in place, with important consequences on the progress of the activities. ·High number of beneficiaries and heterogeneous profile/roles in national HTA activities. In the Joint Action model the Member States appoint organisations which have an interest in the subject of the Action. Due to the high interest which cooperation on HTA has generated in the EU the EUnetHTA Joint Action included at its start 79 beneficiaries and at the time this report is written the number increased to 82. The large number also implies very heterogeneous profiles between the beneficiaries, ranging from national HTA bodies with a statutory function in informing decision makers for pricing and reimbursement decisions, to HTA bodies which has a remit oriented toward development of clinical guidelines, to regional HTA agencies, and also academic institutions with an interest in HTA but with no (official) role in the national HTA/decision-making process. The high number of beneficiaries and their heterogeneous profile and role in the decision-making process in the respective countries increases significantly overheads to the coordinating agency, leading to inefficiencies in the use of resources and creates challenges in identifying relevant tasks for the appropriate profiles. ·Uncertain delivery. To produce a high quality and useful joint assessments the involvement of technology developers has proven to be extremely important. Under the current cooperation model such involvement is often seen as an add-on activity for technology developers, which have to prepare submissions for national HTA assessments and for joint assessments carried out under the Joint Action. This situation is likely to persist as long as the uptake by national HTA bodies of Joint Assessments is not happening to the desired extent. Both in Joint Action 2 and Joint Action 3, the Commission in cooperation with the Joint Action secretariat and relevant trade associations had to organise activities to trigger interest and commitment from technology developers to submit technologies for Joint Assessments. While the activities were successful, the engagement is not certain as it will depend on the ability of the Joint Action to secure uptake of joint assessments in national processes. This situation brings an additional element of uncertainty to the ability of the Joint Action to meet the planned target(s) within the necessary timeline.

·Inconsistency of quality and timely delivery. The examples outlined above result in very uneven progress in the activities of the Joint Action, which in turn affects the ability to deliver both in terms of time and quality of the output. The Joint Action is highly dependent on the organisation responsible for the delivery of the task and even on the technology developer whose technology is being assessed. While this issue can be handled in an action which aims at developing and testing a proof of concept, it is not acceptable when the objective is to timely deliver high quality output to be used in national decision-making processes. 1.5. Political context In recent years, many key players have called for reinforced EU cooperation in the area of HTA. As regards Member States, a clear orientation was contained in the “Strategy for EU Cooperation on HTA” , which was adopted by the Member States representatives in the HTA Network in October 2014. In this document, the HTA Network called upon the Commission to explore how to secure support for the joint work in the long-term. Moreover, the Council, in its conclusions on “Innovation for the benefits of patients” adopted in December 2014, acknowledged the key role of HTA and called on the Commission to continue to support sustainable cooperation. Furthermore, in the Council conclusions on “Personalised medicines for patients” of December 2015 , the Member States and the Commission were invited to reinforce HTA methodologies applicable to personalised medicine. The Council conclusions on “Strengthening the balance in the pharmaceutical systems” in June 2016 confirmed again that Member States see a clear added value of EU HTA cooperation. The joint report of DG ECFIN and the Economic Policy Committee calls for further developing European cooperation on HTA. The European Parliament has also asked for a reinforcement of HTA cooperation at EU level. In its joint motion for a resolution on the Commission Work Programme 2016, the Parliament called for "a step forward towards a common European Health Technology Assessment" . Moreover, in its resolution of 2 March 2017 on EU options for improving access to medicines, the Parliament calls on the Commission to "propose legislation on a European system for health technology assessment as soon as possible, to harmonise transparent HTA criteria in order to assess the added therapeutic value of medicines". The Parliament has also commissioned a study on HTA, highlighting its interest in the subject. The Commission has on several occasions referred to HTA, including as a key part of supporting other important Commission/EU initiatives. For example, the Commission Communication on effective, resilient and accessible health systems suggested HTA as one way to build resilience. In a recent Staff Working Document, the lack of “binding mechanisms for mutual recognition of joint assessments” was identified as one of the major shortcomings of the current HTA system. The Staff Working Document “Better Regulation for innovation driven investment at EU level” pointed out that the fragmentation of HTA systems in the EU is currently “very high” and that the rise of personalised medicine will accelerate the concerns of fragmentation. The recent Commission Communication “Upgrading the Single Market: more opportunities for people and business” contained a commitment that the Commission will introduce an initiative on HTA with a view to improving the functioning of the Single Market of health technologies, in particular in order to avoid duplication of efforts for Member States and industry. Stakeholder views A thorough stakeholder consultation has been carried out in the context of this Impact Assessment in order to collect stakeholders’ views on EU cooperation on HTA beyond 2020 (see synopsis report, Annex II). The usefulness of EU cooperation on HTA was underlined by the input provided by stakeholders in response to the public consultation. Most of the contributors (69%) consider EU cooperation on HTA useful or to some extent useful, with most benefit seen by public administrations, payers and academia (100%) and less benefits typically seen by the medical technologies industry (for more information, see Annex II). The most cited benefits of the EU cooperation on HTA were the opportunity to share knowledge and best practices, contribute to HTA capacity building in the Member States, contribute to building trust between participating organisations and increase awareness (Figure 4). In general, Member States’ public authorities are in favour of continuing EU cooperation on HTA beyond 2020. Some Member States have indicated a preference for voluntary cooperation, while others support a system with mandatory elements. Most contributors highlighted that in case of a mandatory framework, uptake of joint work should be limited to clinical matters, whereas assessment of non-clinical domains (e.g. economic, ethical) should be carried out individually or jointly by interested Member States on a voluntary basis. The idea of a phase-in approach was also raised by some contributors. 1.6. International outlook There is a growing world-wide recognition of the significant benefits of HTA. The World Health Organization (WHO) suggested that a global cooperation of HTA bodies would seem useful, in particular on the clinical domains and the World Bank supports the development of national HTA programmes around the globe. A recent OECD report assesses the state of play and gives recommendations for the use of HTA. The International Monetary Fund also promotes the development of national HTA systems. A number of countries outside the EU have developed well established HTA systems. The Canadian example of centralisation or the regular review of the HTA system in Australia, are interesting examples (see Annex VII). It is also interesting to note the setting up of networks between HTA bodies in other parts of the world, following the model of EUnetHTA. 2.Problem definition While HTA is considered a valuable tool for ensuring sustainability of health systems and stimulating innovation and cooperation at EU level, evidence shows that a series of shortcomings affect the exploitation of the benefits for Member States and economic operators, with subsequent negative consequences also for EU patients and healthcare professionals. Problem 1. Impeded and distorted market access

The different national processes and methodologies of national and regional HTA bodies illustrated in section 1.4.1 (and Annex V) mean that economic operators who want to introduce a health technology in multiple Member States are confronted with various data requests. This in turn contributes to an impeded and distorted market access, leading to lack of business predictability, higher costs, and in the long run negative effects on innovation. Differences in national processes and methodologies also lead to differences in how evidence is considered in assessments and to potentially different HTA conclusions, which can contribute to delays and inequalities in patient access to technologies. The differences in HTA processes and their effects were underlined by various stakeholders in the public consultation. The most significant impact was reported by representatives of the pharmaceutical industry who pointed out that this diversity constitutes a hurdle for companies, as they have to adapt to multiple and various national requirements (e.g. regarding the starting moment of the assessment, data requirements, length of the procedures, scope of HTA and type of assessment carried out). With regard to differences in HTA methodologies, representatives of the pharmaceutical industry emphasised (among others) differences with respect to the acceptability of particular comparators, endpoints and data other than randomised clinical trials, which contribute to the lack of business predictability due to different outcomes of national HTA clinical reports. Duplication of assessments also increases costs for industry, which needs to prepare dossiers for multiple national systems with potentially different data requirements. Requirements for additional evidence are a key cost component, with potential delays/risks in market access. Costs related to additional evidence requirements are particularly high if they necessitate carrying out new trials. The GÖG-LSE study provides an indication of current costs for industry related to the meeting current national HTA requirements (see text box below). Current costs for industry related to the preparation of national HTA dossiers On the basis of the figures reported in the survey carried out by the GÖG-LSE study , the costs for industry related to national pharmaceutical HTA processes are summarised in the table below. The survey carried out by the GÖG-LSE Study indicates that earmarking the costs for one single assessment is difficult as manufacturers prepare a global value dossier for each product, which is usually the main source of input for their HTA departments/teams. Moreover, certain costs can pertain also to the regulatory (e.g. related to evidence) or pricing and reimbursement processes (e.g. in-country staff costs). HTA costs are particularly relevant for SMEs as they typically do not have structures or resources dedicated to HTA, or the in-country capacities needed to adapt to multiple national requirements and formats. In the open public consultation carried out by the Commission, a higher proportion of SMEs indicated that differences among EU Member States regarding HTA procedures and/or methodologies contributed to high costs/expenses for their organisation. In the dedicated SME consultation, 75% of pharmaceutical and 71% of medical technologies companies indicated that differences among EU Member States regarding HTA procedures and/or methodologies may contribute to high costs/expenses for their organisation. The same figure was 44% for non-SMEs in the public consultation, confirming the expectation that differences are more difficult to handle by SMEs. With regard to additional data generation, it should be noted that it is mainly the requirements of the largest markets that companies take into account when designing clinical trials or generating additional evidence. In their input to the online public consultation it was highlighted that while most of the larger pharmaceutical companies resort to national affiliates to engage with national authorities and ensure adequate preparation of the documentation requested by HTA bodies, smaller companies with limited resources may face difficulties in putting in place such a mechanism, which could create a discriminatory environment and discrepancies in the speed of market access. This situation is confirmed by a recent report from EuropaBio showing that SMEs have limited experience in working with HTA bodies and may not have staff dedicated to HTA work. According to EuropaBio, this has led to some products getting marketing authorisation but not being recommended by the HTA bodies because the data was not sufficient to establish the required added clinical and/or economic value. The variety of HTA processes and methodologies is also reflected in the HTA spending by industry. For example, the HTA spending by the pharmaceutical sector ranges from EUR 73 000 and EUR 1 700 000 per HTA submission (depending also on the type of assessment). Extra evidence generation is responsible for additional expenditure (between EUR 50 000 and EUR 20 000 000/submission), with 85% of companies reporting such costs. Furthermore, the pharmaceutical sector actively engages in early dialogues with HTA bodies (69% of responses) with an average cost of EUR 55 750 per case, but which have the potential to alleviate costs in the next phases of development/approval/access to market. With regards to the medical technology industry, HTA submission dossiers range from EUR 1 000 to EUR 3 400 000. Additional evidence generation in the context of a HTA submission dossier had a range of EUR 17 000 - EUR 12 800 000, with 37% of companies reporting such costs. Early dialogues are not a routine procedure in the sector. While the costs related to HTA submissions may not always be significant (seen in the context of overall industry spending) it is important to note that the parallel submissions and assessments by national HTA bodies, entail a significant risk of divergent outcomes in different Member States, which has a negative impact on business predictability. Insufficiently predictable, fragmented and delayed market access is therefore the most important shortcoming resulting from the HTA fragmentation across the EU (see impact estimate in chapter 6.4.1.1). As confirmed in interviews and focus groups with pharmaceutical industry representatives, poor business predictability and high fragmentation of HTA systems across Europe constitute barriers to investment by industry in development programmes for innovative technologies. Finally, as described in section 1.4.1 (and GÖG-LSE Study Section 7.1.7 and 7.1.14) the high variability in the timing (in terms of both the starting point and the duration) of assessments contributes to differences in the availability of health technologies for EU patients. Moreover, divergences in the conclusions of HTA reports on added value, which are due to different approaches taken by HTA bodies as described above, contribute to differences in availability of medicines to EU patients. As illustrated by Table 1 for a sample of cancer drugs, there are common trends but also discrepancies in the conclusions reached by different HTA bodies on the same product. The observed divergences between HTA bodies are due to differences in the clinical part of HTA (REA) and/or the economic part of HTA. In several examples, divergences in HTA conclusions were influenced by how different HTA bodies assessed effects seen for particular clinical endpoints (when assessing the new drug against the same comparator). The authors note the potential for European consensus-building on these clinical aspects, which may be informed by ongoing scientific initiatives of European/international medical societies. Other case studies for other pharmaceutical products and therapeutic areas show similar results, confirming both current HTA divergences but also the potential for improved scientific consensus-building on the clinical part of HTA ,. For medical technologies, the case studies conducted by the GÖG-LSE study indicate an overall lower number of assessments produced by HTA bodies across Europe than for pharmaceuticals (see Table 2). However, the case studies also showed several examples where different HTA bodies reached divergent conclusions on the same medical technology due to differences in the clinical and/or economic parts of their assessments (see GÖG-LSE study for further details). Increased HTA activities in Member States on medical technologies (see problem 2) have the potential to increase further the number of parallel assessments on the same technologies. Considering the different national processes and methodologies, this is likely to lead to increased divergence across the EU and thus fragmentation of the market. The considerations above are confirmed by the overall input received from the online public consultation. According to the respondents, the main consequences of the differences in HTA processes and methodologies across the EU are the diverging outcomes of HTA reports which may affect patients' access to new technologies (e.g. delays, restricted access) (81% of contributions), followed by duplication of work for both HTA bodies and industry (54%), decrease in business predictability (53%), higher costs for the actors (38%) and negative effect on innovation (37%)(Figure 6). Further details on the public consultation, including results by stakeholder group, are presented in Annex II. Problem 2. Duplication of work for national HTA bodies

The duplication of work refers to assessments of the same technology being conducted in parallel or within a similar time frame by HTA bodies in different Member States. The text box below illustrates current costs for HTA bodies related to the production of REAs at national level, as reported by the GÖG-LSE study. Current costs for HTA bodies related to the production of REAs at national level According to the figures reported in the survey carried out by the GÖG-LSE study, costs for HTA bodies range from an average of EUR 35 000 for a REA produced mainly by an HTA body and EUR 20 000 per REA produced by industry and reviewed by an HTA body to EUR 95 000 for a full HTA produced by an HTA body and EUR 40 000 for the cases in which the full HTA is produced by industry and reviewed by HTA body. Further research and benchmarking of these figures with additional HTA bodies not included in the survey indicate that these costs may be underestimated. This means that the duplications expected to continue under this scenario would have an impact on the spending/budget of Member States and public administrations In addition, the current low uptake of joint REA undertaken by the EUnetHTA results in duplication and incurs additional work and costs. The duplication may be associated with different outcomes/conclusions (depending on the type of assessment and applied methodology), which negatively affects business predictability and contributes to delays and inequalities in patient access. The GÖG-LSE Study found that in a sample of 20 pharmaceuticals, 8-15 HTA reports were conducted by different Member States for each individual product. This indicates that there is a group of pharmaceuticals (typically innovative, centrally authorised, approximately 40 new molecules/year) where there is a significant duplication of work for HTA bodies and industry. At the same time, the report concludes that not all Member States have adequate capacities to produce HTAs on all relevant products. Although a lower number of Member States assess medical and other technologies than pharmaceuticals (Table 2) there is still considerable duplication of efforts also in these sectors; albeit to a more limited extent than in the case of pharmaceuticals (3-8 reports per technology in the sample). In the public consultation, MedTech Europe argued that the duplication of efforts is not so prominent for medical technologies. However, recent publications have shown increasing duplication of assessments also for medical technologies., This is in line with current trends for increased HTA activities on medical technologies in Member States (see box below). Examples of Member States confirming the growing trend towards applying HTA to support decision-making for medical technologies Spain. The HTA Spanish Network (which includes the regional HTA agencies of seven autonomous regions and representatives from the regional health-care administrations of the remaining regions) is fully operational since few years and relies on regional HTA agencies to perform and coordinate HTA work with a focus on medical technologies. The network has been instrumental to increase the evidence-based information available to local health authorities to take decision on access. It has contributed to build capacity, increase consistency and quality of HTA within Spain and avoid duplication of assessments on medical technologies. Italy. A recently adopted "national programme for HTA on medical technologies" is the response to the growing need of HTA for medical technologies in Italy. The programme has established a Steering Committee, coordinated by the Ministry of Health and gathering key national agencies and the regional HTA bodies which have expertise and perform HTA and foresees an active engagement of stakeholders’ organisations. The final objective of the Programme, similarly to the one of the Spanish HTA Network, is to increase the availability of HTA for medical technologies, to provide guidance to decision makers, increase consistency and avoid duplication of assessments for better use of resources. United Kingdom. While the National Institute for Health and Care Excellence/NICE has traditionally focused on pharmaceuticals, in the last years it established a dedicated programme for assessments of medical technologies. Differences in methodologies and procedures are considered significant obstacles for EU cooperation on HTA, limiting also the possibility of pooling resources and of a full benefit from the potential efficiency gains at EU level. The uptake of joint EU outputs (i.e. joint tools – EUnetHTA Core Model, guidelines, joint early dialogues, joint REA, joint full HTA) at national level has remained low. Despite the fact that a joint European report was prepared, most Member States still performed assessments of the same technology. The low uptake of joint reports was confirmed by the evaluation report of EUnetHTA Joint Action 2. Looking at the 11 joint assessments carried out under this second Joint Action, on average each European assessment was used in the EU Member States 6.4 times: twice related to direct decision-making; 3.3 times for cross-checking evidence or as a source of information; 0.7 times related to the category 'other' and for 0.4 times no data was indicated. The low uptake of joint outputs is confirmed by the HTA GÖG-LSE Study which points out that most national HTA bodies, despite taking part in the joint assessments, did not adequately make use of the resulting output. Barriers to uptake have been analysed in several documents, including the HTA Network reflection paper on “Reuse of Joint Work in National HTA Activities” , a survey carried out by EUnetHTA Joint Action 2 a study commissioned by EFPIA , and publications in peer-reviewed journals118, ,. Barriers to uptake were also discussed by national organisations in their replies to the public consultation. Across the above-mentioned sources, the following main hurdles to uptake were identified:

·Legal uncertainty: Uncertainty around the status/relevance of the joint outputs in the context of national HTA frameworks constitutes a major reason for the current low uptake. As discussed in section 1.4.1., there are national legal/procedural frameworks for HTA in place in 26 Member States (also see Annexes VIII and IX for further details). As part of these national frameworks, the preparation and uptake of e.g. national clinical assessments is regulated at national level. While there is some diversity due to the different legal systems, in general, key provisions related to the roles and responsibilities of the HTA bodies and the HTA assessments are outlined in national law, while further details are elaborated in administrative provisions (e.g. in procedural rules). By contrast, the legal status of joint outputs stemming from the EUnetHTA Joint Action and their relevance for national HTA processes is not defined, making difficult for national decision makers to adapt their national legal framework to joint outputs. ·Concerns around timeliness: The timely availability of the joint output (e.g. joint REA report) for national decision making process has been underlined as another important limitation leading to low uptake. While in national HTA systems, timelines are enforced as defined in respective legal/procedural HTA frameworks, the EUnetHTA Joint Actions have so far not been able to ensure timeliness of joint outputs (e.g. joint REA reports) to meet Member States needs and feed into national decision-making processes. ·Concerns around quality: As was highlighted in the public consultation, Member States will only use a joint REA report if it is of high quality. Some respondents in the public consultation considered that the first reports prepared under the first two EUnetHTA Joint Actions were of sub-optimal quality. While national HTA systems have established standard operating procedures (SOP) and dedicated quality assurance mechanisms for national work, it has so far not been possible to ensure comparable procedural and quality standards for the production of joint work under the EUnetHTA Joint Actions. Furthermore, there continue to be a number of methodological differences between HTA bodies (described in detail in section 1.4.1). Some HTA bodies have therefore expressed concerns that joint work may not be fully in line with their national methodologies (as defined in national legal/procedural frameworks and methods papers), impeding national uptake. ·Topic prioritisation for joint work: The relevance of the topics selected for joint work (in particular for joint REAs) to national work plans and priorities is another important element to ensure national uptake. A number of Member States have noted that there have been insufficient mechanisms for topic prioritisation in the EUnetHTA Joint Actions so far. Some topics may have been relevant to the authors or other partners involved in particular Joint Action work packages, but have not met the needs and priorities of all HTA bodies. ·Other issues: Language barriers have been identified as a hurdle to uptake of joint outputs. In some HTA systems, use of the national language (e.g. in national HTA reports or early dialogues) is currently defined by legal/procedural frameworks. Some HTA bodies also noted that they would need to adapt their current human resources, to have staff with the right profile (e.g. language skills) for facilitating uptake of joint outputs. Moreover, a number of HTA bodies expressed the need for more training related to joint outputs (e.g. on the process and methods underlying the production of joint REAs), in order to facilitate incorporation in national work. While the points above refer to specific elements hindering the uptake of joint work, all of them are related to the first point on the legal uncertainty of the status of joint outputs. The current cooperation model via the Joint Action EUnetHTA is trying to address some of the challenges outlined above on an ad hoc basis to improve uptake. For example, with support from the European Commission and EMA, arrangement have been put in place to facilitate contacts between CHMP rapporteurs of the dossier for marketing authorisations (once finalised) and authors of the Joint REA to allow an early start of the joint REA work which could facilitate more timely availability of the joint assessment report. Criteria for selection of authors and co-authors are also being developed by the Joint Action to contribute to secure quality output; quality management procedures are being developed and stricter commitment requirements are being explored to engage national HTA bodies in delivering what was promised. However, from the input received so far in the context of EUnetHTA and the HTA Network discussions, it is clear that as long as the issue of the legal status of joint outputs is not resolved, it is very challenging for national HTA bodies to ensure uptake of joint output in a systematic and continuous manner. In addition to the above, it should also be noted that low uptake decreases the readiness of industry to submit new technologies for a joint assessment. The preparation of a submission file costs financial and human resources. Such investments are not worthwhile and will not be done if the joint assessments have no relevance for national procedures. The current model of cooperation mainly relies on industry voluntary submission of joint assessments. Without the certainty that such assessments will be used for national decision making (i.e. uptake) the willingness of industry to continue submission for joint assessments is expected to decrease. Also from industry's perspective the key problems with the joint reports are the same as those referred to above, i.e. inappropriate timing, insufficient assurance of consistent quality and lack of uptake in national/regional decision-making. In addition, from the medical technologies perspective, not sufficiently addressing the specificities of the sector is also seen as a problem. Duplication of efforts and low uptake contribute to increased work and costs for HTA bodies and to sub-optimal use of their resources, as they repeat identical/similar assessments. By contrast, current experience suggests that sharing the work can lower the costs for HTA bodies significantly (in one case where only two agencies agreed to cooperate on clinical guidelines they were able to save 30% respectively). However, if joint assessments are not taken up, they can actually add an additional layer of duplication, as an HTA body may end up working both on a joint assessment and a national assessment for the same technology. To conclude, the current duplication and low uptake imply that investments into the cooperation both in terms of resources from the EU budget and the human resources from the Member States are not used optimally. The example of EU pharmaceutical legislation The issue of duplication of national efforts was an important aspect triggering the development of the pharmaceutical legislation and the set-up of the European Medicines Agency (EMA) as illustrated in the box below. While it should be noted that the scope and technical content of HTA differs from marketing authorisation of pharmaceuticals, the set-up of EMA provides a useful example of how scientific and technical cooperation can be organised at European level and of the type of benefits it can lead to. The development of the pharmaceutical legislation and the setup of the European Medicines Agency (EMA) Despite considerable efforts at harmonisation, at the beginning of the 1990s the European pharmaceutical market remained more fragmented, along Member State boundaries, than any other market for consumer products, as the granting of marketing authorisations were entirely in the hands of Member States. In November 1990, the Commission proposed to Council and Parliament a major overhaul of the European authorisation system for medicinal products, including the introduction of a 'centralised' EU authorisation procedure for technologically advanced medicinal products and a 'decentralised procedure', operated by the Member States with EU arbitration if needed, for all other products. To support the operation of the new system, the Commission proposed setting up a 'European Medicines Evaluation Agency' (EMEA) – later renamed EMA. EMA was set up in 1995 to harmonise the work of existing national medicine regulatory bodies. The centralised procedure was a success, as it effectively allowed access to the entire EU market in little over a year, closely matching the review time of the Food and Drug Administration of the USA. Previously, it had taken on average six years for a new medicine to be authorised in a significant number of Member States. In turn, despite a slow start, the decentralised procedure proved to be a real alternative to the centralised procedure. EMA has a 20+ year track record of ensuring efficacy and safety of human and veterinary medicines across Europe, and promoting research and innovation in the development of medicines. EMA’s success is based on cooperation within the European medicines regulatory network – a unique partnership between the European Commission, the medicines regulatory authorities in the European Economic Area countries, and EMA. Working together has encouraged the exchange of knowledge, ideas and best practices, in order to ensure the highest standards in medicines regulation. This works because EU legislation requires that each Member State operates to the same rules and requirements regarding the authorisation and monitoring of medicines. By working closely together, Member States reduce duplication, share the workload and ensure the efficient and effective regulation of medicines across the EU. Today, seven EMA scientific committees and more than 30 working parties provide scientific expertise for the regulation of medicines by drawing on a pool of several thousand European scientific experts from the network. Problem 3. Unsustainability of HTA cooperation The current EU cooperation on HTA is project-based. This means its funding needs to be secured and re-negotiated in every financial cycle and there is no guarantee for continuing activities in the long term. During the initiation and closing of such a large project (the Joint Action 3 involves 81 participants and benefits from an EU contribution of approximately EUR 16 000 000) substantial time and resources are spent on organisational issues. For instance, more than one year after the launch of Joint Action 3, there are still positions to be filled in key work packages and in the coordinating institution. This has resulted in drops of joint outputs linked to project cycles (Figure 7) as well as in inefficiencies (e.g. development of a new IT system for every new project). The evaluation of EUnetHTA Joint Action 2 also highlights that finalising a project and starting a new one at the same time stretched the resources of the participating organisations and caused delays.

The need for sustainability was highlighted by many of the contributors to the public consultation. Among the limitations of the current model of cooperation most cited by public administrations were: the lack of flexibility of the framework for EU-funded projects which require high efforts for the preparation of a proposal, difficulties to put in place a sustainable IT platform (including IT tools) for the use of all participants and access of joint work, delays in performing joint work which affected the availability of joint reports, insufficient commitment from all partners to use the output, uncertainties about the quality of joint work, insufficient coordination and agreement on topic selection, lack of knowledge on the impact on decision-making and the limited participation of some categories of stakeholders such as health professionals and patients. Organisations representing stakeholders other than HTA bodies (e.g. academia, patients and consumers representatives) expressed concerns related to the limited duration in time and the lack of a sustainable funding mechanism of the current EU cooperation on HTA. The following case study illustrates the problems described this section. A case study for metastatic cancer treatment The pharmaceutical received marketing authorisation in mid-2011. HTA was performed on the same product by 12 HTA bodies in 11 countries, resulting in considerable duplication of work for both HTA bodies and industry. The timeframe of the reports is between 2011 and 2016, indicating the differences of the time of market access. There are commonalities but also important methodological differences in the clinical assessment (REA) regarding the comparator and the evidence used. In all HTA reports, the primary evidence stemmed from the same randomised, double-blind clinical trial. Three agencies used indirect comparison to assess the pharmaceutical against another comparator; four others considered another phase III study, an observational study or referred directly to the marketing authorisation report; one agency also considered another comparator. A number of social value judgements (e.g. end of life criteria or advantages related to the method of administration) were identified in the report; in some countries they were considered in a systemic, in others in a less standardised manner. Half of the agencies considered the treatment important because of unmet medical needs. Three pointed out its innovativeness. Nonetheless, the fact that the treatment improves the quality of life of patients was an important consideration in all HTA reports. Patients were involved in varying degrees in the processes. Following the HTA process, most of the countries reimbursed the pharmaceutical with criteria, in the rest with no criteria. It should be noted that in one country the product was rejected due to its cost-effectiveness; the decision was eventually reversed due to a reduced price. During this period the product was available on a case-by case basis through a special fund, which gives a good example of the complexity of the relationship between HTA and access. In the majority of the countries confidential pricing or a risk sharing pricing agreement is in place, which often requires the collection of real world evidence. 3.Why should the EU act? Article 114 of the Treaty on the Functioning of the European Union (TFEU) allows for the adoption of measures for the approximation of the provisions laid down by law, regulation or administrative action in the Member States, provided they are necessary for the establishment or functioning of the internal market, whilst at the same time ensuring a high level of public health protection. Article 168(4) provides for the adoption of measures setting high standards of quality and safety for medicinal products and devices for medical use. Article 168(1) TFEU states that a high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities. Most health technologies are products which benefit from the free movement of goods within the internal market. Despite this, a number of obstacles to their free movement have been outlined in section 2 of this report. The procedural and methodological differences, along with the considerable duplication of HTA across the EU Member States, have a significant negative impact on when and where health technologies reach the market, thus reducing business predictability for companies, particularly SMEs. This, in turn, contributes to differences in patient access to innovative health technologies. These divergences and duplication also result in considerable additional costs for HTA bodies and industry alike. The aims of this initiative cannot be achieved sufficiently without strengthened cooperation at EU level. As described in section 2, the diversity and multitude of approaches to HTA across the Member States means that, due to their scale and effect, only action at Union level can eliminate the obstacles described. Without action at EU level it is unlikely that national rules on how HTAs are carried out would be harmonised and thus the current fragmentation of the single market would persist. While the on-going cooperation, namely the Joint Actions and the HTA Network, has illustrated benefits of EU cooperation, in terms of establishing the professional network, the tools and methodologies for cooperation and piloting joint reports, the current cooperation model has not contributed to the removal of the fragmentation of the national systems and the duplication of efforts. Without an EU initiative, it is unlikely long-term cooperation on HTA between Member States would be significantly strengthened through bilateral or regional cross-border initiatives. There are clear additional costs for HTA bodies and industry from carrying out HTA on the same health technology in multiple Member States. By carrying out a HTA only once at EU-level, economies of scale, greater business predictability, increased quality and consistency of HTA and improved transparency for patients would be achieved in the long run. This impact assessment report has identified a division between the HTA domains (the clinical domains) which lend themselves to a common assessment at EU-level and those (the non-clinical domains) which have more country-specific elements. By making this distinction, this initiative will maximise the EU added value while at the same time ensuring an approach to HTA assessment that is proportionate and in keeping with the principle of subsidiarity by leaving Member States to continue carrying out the parts of HTA better achieved at national level. The report has also underlined the differences between the pharmaceutical and the medical technologies sectors, not only in relation to the different market access path, but also in relation to the role HTA plays in the two sectors and the lower level of duplication/parallel processes compared with pharmaceuticals. In order to ensure a proportionate approach is taken, such differences are reflected in the design and comparison of the identified policy options along with the different categories of products within sectors (centrally authorised v. national authorisation etc) which are reflected in the product scopes considered in the various policy options. The proportionality of the initiative is further considered in the design and comparison of policy options, and the measures envisaged do not go beyond what is necessary to remove obstacles to the free movement of goods within the internal market. Creating a system of HTA at EU-level would necessitate some financial and administrative costs for the Union and for EU Member States. Such costs also need to be considered in light of the current EU-level HTA cooperation and its lack of sustainability as outlined in section 2. The principle of subsidiarity is furthered ensured in the initiative by fully respecting Article 168(7) TFEU which stipulates that the Union shall respect the responsibilities of Member States for the definition of their health policies and for the organisation and delivery of health services and medical care. In particular, Member States are responsible for decisions on pricing and reimbursement, which are not within the scope of this initiative. 4.Policy objectives The general, specific and operational objectives of the initiative are listed below. Figure 8 provides an overview linking the objectives to the problems discussed in detail in section 2.

General objectives The general objectives of the initiative are: ·Ensure a better functioning of the internal market ·Contribute to a high level of human health protection Specific objectives The specific objectives of the initiative are: ·Improve the availability of innovative health technologies for EU patients ·Ensure efficient use of resources and strengthen the quality of HTA across the EU ·Improve business predictability Operational objectives The operational objectives of the initiative are: ·Promote convergence in HTA tools, procedures and methodologies ·Reduce duplication of efforts for HTA bodies and industry ·Ensure the uptake of joint outputs in Member States ·Ensure the long-term sustainability of EU HTA cooperation 5.Policy options Based on identified shortcomings, experience with the current cooperation and comments from stakeholders, the following key principles were identified for constructing the policy options:

·The need to build on existing structures, activities and achievements and maintain a Member States driven approach; ·The need to address the specificities of the different sectors: pharmaceuticals, medical and other technologies; ·Ensure a high level of quality, transparency and independence (scientific and financial); ·Ensure the engagement of stakeholders, in particular patients, health care professionals and payers; ·Support the development of HTA capacities at national level. A number of policy options (PO 1-5) were identified already in the Inception Impact Assessment. Of these, policy option 5 was discarded upfront (as discussed in section 5.1 below), while policy options 1-4 were further developed and are discussed in more detail in subsequent sections. 5.1. Discarded policy option The inception impact assessment put forward a legislative option which includes joint full HTA reports ("option 5"), i.e. joint production of HTA reports which cover clinical and non-clinical (e.g. economic, organisational, ethical) HTA domains. This option was also included in the analysis of options conducted in the GÖG-LSE Study and in the public consultation. However, it has become clear from the input received in the public consultation and other fora that such an option is not realistic. While there is broad agreement that voluntary cooperation on methodologies to develop full HTA reports would be useful to increase consistency and predictability of assessments, the development of EU legislation mandating joint full HTA reports at EU level would bring more challenges than benefits. This is mainly due to the fact that full HTA reports rely to a large extent on context-specific information (e.g. economic, organisational, ethical) in order to serve national decision-making. These issues have been highlighted by public authorities, experts as well as industry representatives. This implies that a joint full HTA report could not in practice at this point in time support improved governance or sustainability. Option 5 as analysed in the GÖG-LSE study therefore raises concerns as regards its proportionality, Member States' responsibilities under Article 168(7) TFEU and its feasibility. This option is therefore discarded upfront and is not discussed further in subsequent sections of this Impact Assessment. 5.2. Key characteristics of the policy options The different policy options for EU cooperation on HTA after 2020 are defined along several key characteristics focusing on: (1) Joint outputs, (areas in which EU cooperation seems possible/useful) which could be included in the initiative: Technology Specific Reports ·Early dialogues with health technology developers; ·Joint Relative Effectiveness Assessments (REA). Common tools and procedures ·Methodologies to formulate the contents and design of assessments (e.g. EUnetHTA Core Model and Standard Operating Procedure/SOP); ·Horizon Scanning;

·Procedural framework (clarifying inter alia the rights, obligations and involvement of stakeholders, such as patients and health care professionals; transparency; independence etc.); ·Submission templates and templates for other key documents, including assessment reports and summaries; ·Database for horizon scanning, planned, ongoing and finalised early dialogues; planned, ongoing assessments and finalised assessments; ·IT tools for exchanging (confidential) information, for supporting the collection of Real World Data and for training and other capacity building activities. The common tools and procedures should build on the work already undertaken in Union-funded actions on HTA, including EUnetHTA, Horizon 2020-funded actions. Preliminary results of regional initiatives such as the BeNeLuxA, and Valletta Declaration initiatives could also be taken into account. The distinctive characteristics of the different sectors (i.e. pharmaceuticals, medical devices and others) should be taken into account in the development of common tools and procedures. (2) Technologies which could be covered by the initiative: ·Pharmaceuticals; ·Medical technologies (medical devices and in vitro diagnostics); ·Other technologies (e.g. Screening or vaccination programmes, surgical procedures). (3) The choice of instrument used to establish and maintain the cooperation, including: ·Voluntary cooperation of national bodies outside any EU agreement or framework (i.e. an intergovernmental approach relying exclusively on the resources and political commitments of Member States, as is the case in the BeNeLuxA or other similar initiatives); ·Contractual obligations between (some/all) Member States with possible co-financing by EU programme/funding but no dedicated legal framework (i.e. project based approach); ·Common legal framework (Regulation or Directive) Also combinations of these instruments could be envisaged. For example, some outputs could be governed by a legal framework, while others could be produced on a voluntary basis. (4) The choice of governance structure for the cooperation, including: ·Project-based secretariat: a coordinating secretariat is set up and run for the duration of a project by a Member State HTA body in agreement with the other participants of the consortium; ·Member State secretariat: a secretariat is established and hosted in a national/ regional HTA body; ·Central secretariat: a secretariat is established and hosted in the European Commission, an existing EU Agency or a new EU agency.

(5) The financing (i.e. possible sources of funding): ·EU funding, either through the Public Health Programme or another EU financial instrument; ·Funding by Member States participating in the cooperation, in cash and/or in kind; ·Funding of joint assessments through industry fees have also been considered, but has been discarded in the first phase of this initiative. This consideration is based on a proportionality assessment weighing the relatively limited size of the structure foreseen for cooperation against the burden of setting up a fee structure. It was also considered appropriate to evaluate the cooperation after a certain period of time based on experience gathered and assess, at that point in time, whether the introduction of a fee structure for joint assessments would be appropriate. From these elements, four policy options have been constructed, based on input from Member States, stakeholders and experts through the various forms of consultation activities (for more details on consultation activities, see Annex II). The study supporting the Impact Assessment process has also further discussed and validated the proposed Policy Option (See GÖG-LSE study, Chapter 4). The policy options were constructed according to their feasibility (e.g. mandatory uptake considered only for legislative options) as well as logical and coherent combinations of elements (see section 5.3. below). The governance