Highly Specialised Technology Evaluation

Asfotase alfa for treating paediatric-onset hypophosphatasia [ID 758]

Committee Papers

NATIONAL INSTITUTE FOR HEALTH AND CARE EXCELLENCE

Highly Specialised Technology Evaluation

Asfotase alfa for treating paediatric-onset hypophosphatasia [ID 758]

Contents: 1. Letter to NICE regarding Proposed Managed Access Agreement (MAA) -

submitted by Alexion Pharma UK

2. Proposed Managed Access Agreement (MAA) - submitted by Alexion Pharma UK

3. Evidence Review Group Critique and addendum (MAA) from Kleijnen Systematic Reviews

Any information supplied to NICE which has been marked as confidential has been

redacted. All personal information has also been redacted.

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May 23, 2016 Sheela Upadhyaya Associate Director Highly Specialised Technology Centre for Health Technology Evaluation National Institute for Health and Care Excellence (NICE) 10 Spring Gardens London, England SW1A 2BU Re: Response to April 7, 2016 Letter including the Revised Managed Access

Agreement (MAA) for asfotase alfa for treating paediatric-onset hypophosphatasia

Dear Sheela: Thank you for your letter dated April 7, 2016 requesting additional information in support of Alexion’s highly specialised technology (HST) submission for asfotase alfa (Strensiq®) in the treatment of paediatric-onset hypophosphatasia (HPP). We continue to be pleased that the NICE Evaluation Committee (the Committee) recognises the clinical value of asfotase alfa, and the importance of bringing this therapy to patients with this ultra-rare disorder who have no other treatment options. Based on our discussions with the NICE team, as well as the Committee’s request, we provide below and have attached the following documents in response to the guidance in your April 7th letter:

An updated Managed Access Agreement (MAA) for use of asfotase alfa in patients with paediatric-onset HPP (Attachment A). Importantly, the MAA has been discussed in detail with, and approved by, multiple stakeholders notably the treating specialists for patients with HPP in England, as well as the associated patient group, CLIMB (Children Living with Inherited Metabolic Diseases), and National Health Services England (NHSE). The revised MAA reflects the full input and support of these critical stakeholders, illustrating the importance of providing timely access for select patients identified with paediatric-onset HPP in England who are most likely to benefit from asfotase alfa;

An updated budget impact model and cost-consequence model that estimate the impact of the revised MAA (Attachments D and E, respectively);

The HST patient access scheme (PAS) evidence submission template (Attachment F); and

Additional justification why funding asfotase alfa for paediatric-onset HPP in England represents good value for money and is appropriate for patients in need.

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In addition, it is important to note that Alexion has initiated discussions with NHSE directly regarding proposed commercial terms should the Committee recommend asfotase alfa for national commissioning. Procedural delays in the progress of our proposed Patient Access Scheme (PAS) have occurred, as well as functional limitations raised by the Department of Health and the Patient Access Scheme Liaison Unit (PASLU) within NICE regarding its capacity to appropriately assess a “complex” PAS for an HST. Alexion is, therefore, concerned that NICE has given insufficient consideration to the proposed financial risk-sharing (via the proposed PAS) of the costs of treating patients with paediatric-onset HPP, which may unnecessarily and negatively impact the Committee’s evaluation of asfotase alfa. As such, Alexion seeks to discuss the cost containment objectives and our risk-sharing proposals directly with NHSE, in parallel with the ongoing PAS process, in order to ensure fair consideration, and to facilitate appropriate negotiations on price and cost. We have included our proposed annual patient cost cap in our budget impact and economic modelling results provided below to ensure the Committee appreciates the full value of the concessions we have sought to offer since the beginning of the submission process. As always, Alexion remains committed to working with NICE and NHSE to ensure that patients with paediatric-onset HPP in England who can benefit most from asfotase alfa have access to therapy. As requested, we have marked relevant information in our response Commercial in Confidence (CIC), and ask that every effort be made to ensure this information remains confidential until further discussion and agreement. Sincerely,

Heidi L. Wagner, J.D. Senior Vice President, Global Government Affairs Cc: Carole Longson Meindert Boysen

Linda Landells Martyn Burke Leanne Wakefield Attachments: Attachment A: Revised Proposed Managed Access Agreement and associated

appendices Attachment B: Schematic for Proposed Managed Access Agreement Attachment C: Stakeholders Consulted in Development of MAA Attachment D: Revised Budget Impact Model

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Attachment E: Revised Cost-Consequence Model Attachment F: HST PAS Evidence Submission Template and associated appendices Attachment G: Checklist of Confidential Information (NICE Appendix H)

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I. Revised Managed Access Agreement (MAA), Including Proposed Clinical

Start, Stop, and Continuation Criteria As outlined in your letter from April 7, 2016, we recognise that only one MAA has been implemented to date under the HST evaluation process, which is for elosulfase alfa (Vimizim®). Therefore, we have based the revised proposed MAA for asfotase alfa on the publicly available sections of the elosulfase alfa MAA. Please see Attachment A for the revised MAA proposed for asfotase alfa. Again, as noted above, the revised MAA has been fully endorsed by the relevant physicians and patient group in England, and represents a consolidated agreement and approach among Alexion, clinical experts, patients, and a representative from NHSE. In addition to the clinical start, stop, and continuation criteria outlined in the MAA, we provide comments below to the specific points noted in your April 7th letter. NICE Comment from April 7, 2016 Letter: The proposed MAA population has not focused on the population with the greatest clinical need.

Alexion has undertaken multiple and extensive discussions with various stakeholders to develop an updated version of the MAA (see Attachment A). These stakeholders are outlined in Attachment C and include clinical experts, a representative from CLIMB, the patient organisation, and a representative from NHS England. Following these discussions, we are confident the revised proposed MAA focuses on treating the population with the greatest clinical need for asfotase alfa and it has the support of all these stakeholders. HPP is typically categorised according to age of onset of disease but, with the exception of perinatal/infantile disease, age of onset may not correlate with the severity of symptoms and the need for clinical intervention. There is no way to predict clinical severity on the basis of genotype, and alkaline phosphatase (ALP) level, although persistently low, may also not correlate with disease severity. Likewise, degree of skeletal hypomineralisation in juveniles and adults with paediatric-onset HPP may not be predictive of degree of disability and pain. The MAA therefore seeks to identify patients most likely to benefit according to severity of current symptoms and the impact those symptoms have on functional ability and ability to perform activities of daily living. This includes infants with perinatal/infantile HPP and other children and adults with paediatric-onset HPP for whom intractable pain, recurrent fractures, and severe motor impairment may be severely limiting functional ability. Infants with perinatal/infantile HPP: These infants have a high risk of morbidity and mortality, as has been recognised by the Committee. It is therefore recommended in the MAA that all such infants be treated as a matter of urgency and that treatment

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should continue for the duration of the MAA, whilst data are generated from on-going clinical studies and from the Global HPP Registry. Perinatal/infantile survivors: A small number of patients with a diagnosis of perinatal/infantile-onset HPP have survived with significant disability as a result of their disease. The MAA recommends that these patients should all be treated, regardless of current age, and then be subject to the monitoring and stop criteria applicable to all other treated patients. This population is reflective of a significant proportion of the asfotase alfa clinical trials cases in both the 006/008 and 09-10 clinical studies (see pages 25-26 for further details on the study populations). Clinical benefit of asfotase alfa has been demonstrated in those clinical trials in this patient population. Children aged 1-18 years with HPP: Outside of perinatal/infantile-onset disease, discussions have focussed on the major symptoms with which patients present or that cause the greatest distress and have the greatest impact on a patient’s ability to perform activities of daily living. Motor disability may result from skeletal disease, joint deformity, and muscle weakness. Lack of mineralisation and impaired skeletal growth lead to bone deformities, rickets, and bone weakness, all of which contribute to restricted ambulation and reduced functional endurance. One of the greatest complaints of children and adolescents with HPP is their inability to keep up with their peers and participate in normal and necessary childhood activities and activities of daily living. The MAA recommends initiating treatment if mobility is impaired to the extent that the patient cannot walk more than 300m and requires mobility aids to do. Severe pain can also impact on mobility and ability to perform activities of daily living. In the juvenile study, there was a significant improvement in both six minute walk test distance, pain score and CHAQ disability score. According to the results from the European patient survey, submitted as part of the original company submission, three out of six (50%) children not treated with AA or four out of eight (50%) of all HPP children of school age attended school with educational support. Two of seven (29%) families with HPP children (non-AA) had to move home to more suitable accommodation. Two of seven (29%) families with HPP children (non-AA) had to make adaptations to their homes, such as increasing the room size and adapting the bath. Studies by Whyte (2012a) and Weber (2015) elicited similar results: 32% of patients modified their homes due to HPP. None of the two (0%) families with children treated with AA needed to make home adaptations due to HPP. Ambulation and endurance may also be limited by musculoskeletal pain. The Committee heard patient testimony at the first Committee meeting from the mother of a 12-year old boy whose life is significantly impacted by impaired mobility and intractable

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pain as a result of HPP. He attempts to take part in normal family activities and school activities despite reduced mobility and pain. The mother described him frequently crying as a result of his pain, and when family days out are planned, they are usually cut short as a result of needing to take him home to rest and have more analgesia. Under the proposed MAA, patients with intractable pain should be reviewed in a specialist pain clinic so that their analgesic requirements are properly managed prior to beginning treatment with asfotase alfa. Consequently, patients with HPP under age 18 years, but who do not have perinatal/infantile-onset HPP, may be considered for treatment under the MAA if they have one of the following:

1) significant impairment of mobility*, or 2) intractable musculoskeletal pain, which cannot be managed with three classes of

analgesia under the supervision of a specialist pain service. *For infants between ages 1 and 2, impairment of mobility may be assessed as failure to walk by 18 months of age as per Royal College of Paediatrics and Child Health (RCPCH) guidelines. Significant impairment of mobility has been defined using the modified Bleck criteria, which are a standard measure used in the management of complex osteogenesis imperfecta. This scoring system is reflective of the degree of functional impairment experienced by patients with more severe symptoms, and demonstrates that some patients may only be mobile within their own home, or only under the supervision of a physiotherapist in a supervised session. These patients are otherwise house-bound or dependent on wheel chairs or other mobility aids. Score Bleck mobility criteria

Description

1 Non-walker older than 2 years of age

2 Therapy walker with the use of crutches or canes

3 Therapy walker without the use of crutches or canes

4 Household walker with the use of crutches or canes

5 Household walker without the use of crutches or canes

6 Neighbourhood* walker with the use of crutches or canes

*Neighbourhood walker defined as one who can walk no more than 3 blocks or <300m.

Bleck score 7, 8, or 9 would not be a sufficient criterion for treatment with asfotase alfa without other functional criteria (Bleck 7: Neighbourhood walker without the use of crutches or canes; Bleck 8: Community walker with the use of crutches or canes; Bleck 9: Community walker without the use of crutches of canes. Community walker is defined as able to walk the same distance as their age-adjusted peers, even if at a slower pace).

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Adults with paediatric-onset HPP: There is a small population of adults with paediatric-onset HPP for whom their symptom severity would lead to a consideration for treatment with asfotase alfa. The proposed MAA recommends that adults with paediatric-onset HPP must have two out of the three following start criteria to be eligible for treatment:

1) Current fractures on a history of non-traumatic, recurrent or non-/ poorly-healing fractures characteristic of HPP; and/or

2) Intractable musculoskeletal pain – use of three or more classes of analgesic, and assessment in a pain service1 without attaining sufficient relief to undertake activities of daily living; and/or

3) Restriction of mobility assessed by a healthcare professional according to the modified Bleck Ambulation Efficiency Scoring (Score 1-6, excluding scores 7, 8, 9)2.

Two of the above criteria are the same as for children with HPP, with the addition of recurrent non-traumatic fractures and the requirement to satisfy two of three criteria rather than one. The clinical rationale for including recurrent non-traumatic fractures as a criterion in adults and not in children is that in normal, healthy children there is a very high baseline rate of fractures, which makes it very challenging to determine whether fractures in a child with HPP are pathological or are due to “normal” trauma due to activities that predispose a child to fracture risk. In adults with paediatric-onset disease, their fractures occur in the absence of a traumatic event. These fractures are typically subtrochanteric and in the metatarsals. Such fractures are slow to heal and cause intractable pain. In the asfotase alfa trial, 09-10, 18 out of 19 participants had a history of fracture with a median number of fractures of 6 per patient. This reflects a significant medical need as 11 of the 18 patients had fracture fixation with steel or titanium rods inserted, and 6 of the 18 had had plates or screws inserted.(1) In adults, motor disability impacts their ability to manage work and home life and maintain a job. Motor disability may be further impacted by recurrent non-traumatic fractures of the sub-trochanteric region of the femur and of the metatarsals. HPP is also typified by intractable musculoskeletal pain, which impacts patients’ ability to function and has a significant negative impact on their quality of life. Musculoskeletal pain in HPP patients may be disproportionate to the degree of disability or skeletal hypomineralisation or number of fractures. This is frequently due to the presence of micro-crystalline deposits in the bone marrow that are only detectable by MRI scanning.

1 Age appropriate chronic pain management according to hospital own guidelines.

2 Bleck score 7, 8, and 9 would not be sufficient criteria without other functional criteria (Bleck 7: Neighbourhood

walker without the use of crutches or canes; Bleck 8: Community walker with the use of crutches or canes; Bleck 9: Community walker without the use of crutches of canes). Community walker defined as able to walk the same distance as their age-adjusted peers, even if at a slower pace.

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In addition to the Start criteria for eligibility described above, the MAA proposes baseline and regular assessments of a patient’s condition in relation to the relevant criteria so that after one year of treatment with a stable dose of asfotase alfa, each patient may be assessed for continuation or discontinuation of treatment. Treatment will be initiated, assessed and continued or discontinued by clinicians with expertise in the management of HPP working in an expert centre. Discontinuation criteria also are specified in the revised proposed MAA (Attachment A). The European Medicines Agency has recently endorsed a protocol for a Global HPP Registry which, in addition to collecting data on HPP, will collect and evaluate long-term safety and effectiveness data in HPP patients who have/are receiving treatment with asfotase alfa. It is anticipated that the national HPP expert centres will participate in the Global HPP Registry and enrol HPP patients. As part of this, during the period of the MAA, all mandatory assessments will be recorded in a Registry to enable the evaluation of the benefits of treatment to these patients and to inform a future appraisal of asfotase alfa by NICE and NHSE.

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II. Risk and Overall Cost to NHS/PSS – Budget Impact Model (BIM)

NICE and the Committee have made clear that Alexion needs to illustrate how the financial risk to the NHS/PSS is limited under the newly proposed MAA. As such, we outline below the updated budget impact for treatment of paediatric-onset HPP patients with asfotase alfa based on the revised MAA proposal in Attachment A. Our below response addresses the following three points outlined by NICE in its April 7, 2016 letter. NICE Comment from April 7, 2016 Letter: It is unclear how the proposal would control the financial risk to the NHS/PSS. For example, the results of the budget impact model provided with the revised draft MAA for asfotase alfa (dated 15 March 2016) are not different to those cited in the original ECD released 3 December 2015. NICE Comment from April 7, 2016 Letter: Managed Access Agreements include all commercial arrangements that are proposed to share and manage risk over and above the submitted PAS. The current proposed MAA has no evidence that financial risk will be shared between Alexion and the NHS. NICE Comment from April 7, 2016 Letter: The results from the budget impact models do not appear to take the Committee’s preferred assumptions about the costs of the technologies into account. For example, removing the assumption around the price drop following loss of exclusivity should be incorporated into the BIM. As noted in our cover letter sent with the draft MAA submitted to NICE on March 15, 2016, the budget impact model (BIM) accompanying the MAA was only revised by “applying the proposed expenditure cap that would limit the annual per-patient cost of therapy to £ XXXXXXX”. The budget impact results incorporating the annual per-patient expenditure cap had not previously been reported by Alexion, NICE, or the Economic Review Group (ERG), and, as such, were different from those cited in the initial evaluation consultation document (ECD) on December 2, 2015. Only the impact of the annual per-patient cap was addressed in the draft MAA submitted in March 2016 because the draft was a starting point for identifying the patients who would most benefit from treatment. As we noted: “While the revised proposed MAA reflects significant expert input, […] it should not be considered as final consensus among all parties. Rather, Alexion looks forward to working with NICE and all relevant parties toward a final and fully executable agreement in a timely manner.” At the time of our March 2016 submission to NICE, data had not been identified to map the clinical criteria presented in the MAA to the HPP patient population in England in order to estimate those patients who would meet the criteria for treatment outlined in the proposed MAA. Consequently, because the number of patients meeting the MAA’s clinical criteria for treatment could not yet be estimated, the most effective means of

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controlling the financial risk to the NHS/PSS was through control of the cost of such patients, via the annual per-patient expenditure cap. Independent of the MAA, the proposed per-patient expenditure cap (included in our proposed PAS) significantly mitigates the per patient and aggregate financial risk to the NHS/Personal Social Services (PSS) by assuming full responsibility by Alexion for drug costs incurred above the cap level. The financial benefit of the proposed per patient annual expenditure cap significantly enhances the value for money of asfotase alfa across the patient population treated, particularly as patients grow over time.

As noted above, since submitting the draft MAA in March 2016, when the clinical criteria for treatment could not yet be mapped to the HPP patient population, Alexion has had the opportunity to discuss the MAA in detail with multiple stakeholders (Attachment C), notably the treating specialists for patients with HPP in England, as well as the associated patient group, CLIMB, and NHSE. Based on the revised MAA, Alexion has estimated the number of patients expected to be treated in England over a five-year period, and the associated net budget impact to the NHS. Details of the revised budget impact model (BIM) are provided below. Revised MAA Net Budget Impact – Assumptions In order to model the net budget impact of treatment of patients meeting the MAA eligibility criteria, we rely on the model structure from Alexion’s original submission to NICE dated July 21, 2015. Adjustments are made to account for the passing of time since the original submission was made nearly one year ago, and the growth in disease awareness over that period, as well as for differences between the treatment rates (as percentages of diagnosed patients) assumed previously versus the treatment eligibility rates resulting from the MAA criteria. In Alexion’s original submission, it was assumed that amongst diagnosed patients, only a subset would receive treatment with asfotase alfa in the scenario where asfotase alfa was approved for market access. The treatment rates and assumptions used reflected opinion from expert clinicians during the clinical trial development period and the best understanding of the natural history of the disease available at that time. NICE had concerns about the uncertainties of this approach; however, there was no more accurate methodology for making estimates given the extreme rarity of HPP. Now, the MAA eligibility criteria define specific clinical criteria to be used to determine those patients most likely to receive the greatest benefit from treatment, and for whom funding of treatment should be available. In the revised MAA net budget impact analysis, the proportion of patients meeting the eligibility criteria is estimated and, as a conservative assumption, all patients meeting those eligibility criteria are then assumed to receive treatment with asfotase alfa. The revised estimate for the number of patients treated is, therefore, now based on a structured definition in the MAA of which patients should receive treatment and what

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clinical characteristics they will exhibit. Then, by using these specific criteria, and working with the clinical experts in England, we have modelled the number of patients expected to be treated with asfotase alfa over the next five years. Using this refined approach, Alexion found the resulting patient numbers expected to be treated are similar to the estimates in our original analysis. Given the robust process to develop the MAA, and the ability of NICE/NHSE to manage patient access using the start and stop criteria outlined in the MAA, the uncertainty for NICE with regard to overall patient numbers, and ultimately cost, is significantly reduced. The revised net budget impact analysis based on the revised MAA includes the following assumptions: Diagnosis rates: Diagnosis rates from Alexion’s original submission have been reviewed and adjusted step-wise, as described below:

(1) For all age groups, due to the passing of almost a year since Alexion’s original submission, diagnosis rates from the former Year 2 of our initial model are now applied in the first year of the revised model. The former Year 3 diagnosis rates are now applied in the second year of the revised model, and so on. Rates from the former Year 5 were projected for the new fifth year in the revised model.

(2) Diagnosis rates for Year 1 in patients age 1-17 years old and 18 years and older have been further adjusted to align with the highest estimate of known patients with HPP in each age group in England. Specifically, XX paediatric patients (under 18 years of age) in the BPABG survey were reported in our original submission to NICE in 2015, and XX adult patients have been reported in four expert centres (Birmingham, Manchester, Norwich and Sheffield) in May 2016.

(3) Given that the total of known patients aged 18+ that were ever diagnosed with HPP over many years represents just 11% of estimated prevalent adult patients, it has been assumed that over the next 5 years that number would not be likely to grow to more than twice the number known today. In the original Alexion submission in 2015, a diagnosis rate of 20% was adopted in Year 5 of the model for this age group so it was decided this should be retained in the fifth year of the model, and the intermediate rates “smoothed” between 11% and 20%.

MAA eligibility rates: For patients age 0-1 years, it is assumed that all meet the MAA eligibility criteria as the MAA recommends that all patients with perinatal/infantile HPP should be treated with asfotase alfa. For patients age 1-17 years, four different approaches were used to estimate the proportion of patients eligible under the MAA criteria:

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(1) Using published data Whyte et al. (2015) (2) (see Table 1 of the publication), by

which a conservative assumption is made that 36.3% will meet the MAA eligibility criteria. In this recent review of in-patient studies of children managed over a 25-year period at the leading national expert centre in the United States, it was found that 58 of 160 children studied with juvenile-onset HPP had “severe childhood” HPP (as opposed to odonto or “mild childhood” HPP). This in-patient study conducted over 25 years is likely to report a higher proportion of more severe patients than would typically be found at any one time-point in an out-patient clinic setting in the NHS in England. As such, this source has a high risk of bias to indicate a far greater number of eligible patients than would likely be the case in England.

(2) Alexion approached the Convenor of the British Paediatric and Adolescent Bone Group (BPABG) again, who previously conducted an email survey of its members in 2015, to establish that at that time of our initial submission, the number of children (under 18 years of age) with symptomatic HPP being managed in England, was XX. We asked for assistance to re-survey the centres to establish the proportion of those patients, and any newly-diagnosed patients, who would likely meet the MAA eligibility criteria. Unfortunately, the timeline established by NICE to complete this submission was not sufficient for a survey to be appropriately conducted.

(3) Alexion, therefore, conducted a survey on its own of the three expert centres that manage children with HPP in England, and whose clinicians contributed to the development of the MAA clinical criteria, in order to establish the proportion of their current caseload that would likely meet the eligibility criteria (after baseline assessment). We found that out of XX patients aged 1-17 years under clinical management, only X patient is considered eligible for treatment with asfotase alfa based on current presentation of clinical symptoms. This represents X% of the diagnosed juvenile population currently in these centres.

Estimated numbers of people aged under 18 years (paediatric) with HPP in three expert paediatric bone centres in England, and those considered eligible for treatment with asfotase

alfa

Number of patients from England under clinical management in expert centres

Number of patients estimated to be eligible for asfotase alfa treatment, based on MAA criteria

Perinatal / infantile- onset

Juvenile-onset Perinatal / infantile-

onset Juvenile-onset

X XX X 1

Note: Perinatal/infantile-onset patients may have reached age 1 or above at present.

(4) The patient organisation, CLIMB, was not able to provide data suitable for this

purpose in the time period required.

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Two potential sources for the eligibility rate in patients aged 1-17 were therefore available, ranging between X% in expert centres in England at the current time, and 36.3% in one expert centre in the US over a 25-year period. We chose to use a conservative assumption of XX% for our modelling, which is towards the middle of the range estimated by the two separate sources, and when this is applied to the number of diagnosed age 1-17 patients (the XX paediatric patients that the BPABG survey reported in our original submission to NICE in 2015), it models X age 0-17 patients eligible for treatment based on the MAA, consistent with the number of patients (X) advised by the expert centres in England. For patients 18 years of age and older, the same four approaches were used to estimate the proportion of patients eligible under the MAA criteria. Importantly, the Committee should note that the MAA requires that two of the clinical criteria are met for a patient over 18 years of age to be eligible for treatment with asfotase alfa:

(1) It was not possible to identify a suitable published source of data regarding disease severity in adults (over 18 years of age) with paediatric-onset HPP.

(2) On the recommendation of clinicians, Alexion approached the Bone Research Society to request that they survey their members in a way similar to that of the BPABG described above. An email survey returned only two responses, one of which was quantitative and not qualitative (i.e., it did not address the clinical presentation of patients), so this approach did not provide suitable data.

(3) Alexion, therefore, contacted five expert centres known to manage adults with HPP in England, to establish the proportion of their current caseload that would likely meet the eligibility criteria (after baseline assessment). Data were obtained from 4 of the centres (Birmingham, Manchester, Norwich, and Sheffield) that suggested that X patients out of XX under clinical management are considered eligible based on current presentation. This represents X% of the diagnosed adult population currently in these centres.

(4) The patient organization CLIMB was not able to provide data suitable for this purpose.

Therefore, we used the data from approach #3 above to inform our modelling of patients age 18 years and older with paediatric-onset HPP in England who are expected to qualify for asfotase alfa treatment based on the proposed MAA.

Treatment rates: As a conservative assumption, all patients eligible based on the MAA criteria are modelled as receiving treatment.

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Price Reduction: In the third comment from NICE listed above, it is requested that a price decrease following loss of exclusivity be removed from the modelling. The budget impact analysis spans a period of five years so an assumption of a price drop following loss of exclusivity is not relevant and the revised MAA net budget impact analysis continues to assume that there is no price change within the five-year horizon of the analysis. Adherence/compliance rate: Alexion is aware, per Section 5.11 of the ECD that the Committee considered adherence of 100% to be more plausible than the 80% rate included in Alexion’s original analysis. Specifically:

“The Committee was also aware that the company had assumed that adherence to asfotase alfa was much lower than 100%. The Committee heard from the company that it had based its adherence rate on the upper limit of those rates reported for subcutaneous anti-TNF therapies. However, the clinical and patient experts both considered that the company’s assumption was not appropriate. The Committee heard from the company that parents of children with the condition will either administer asfotase alfa themselves, or ensure that the drug is taken by the person with the condition. The Committee agreed that the ERG’s scenario that assumed 100% adherence provided the more plausible estimate for the budget impact of asfotase alfa. The Committee concluded that the company’s assumption about adherence resulted in a significant underestimate of the budget impact.”

While Alexion acknowledges the input from clinical/patient experts and patients’ guardians, as mentioned in the “Revised MAA Net Budget Impact” section above, we continue to believe that evidence suggests that 100% adherence is exceedingly unlikely in long-term clinical practice. For infants and young children, parents/carers tend to take responsibility for administering drugs. This means that compliance is much higher than would be expected in older children and adolescents. It is well recognised that adolescents often have poor compliance rates even when they have chronic disease requiring life-long treatment (e.g., type 1 diabetes and cystic fibrosis).(3–5) In adolescence patients experiencing major hormonal and psychosocial changes in relation to puberty and entry into adulthood, their compliance rates with self-administered medications can be negatively impacted. For example, adolescents with type 1diabetes were found to have poor glycaemic control with reductions in compliance of more than 29%. Even in clinical trials of cystic fibrosis medications, compliance drops dramatically over time (82% at start of clinical trial to 44% post-36 months).(5) Compliance rates of close to 100% are not realistic in any disease or treatment setting, particularly once individuals take responsibility for self-administration. As such, 80% adherence is assumed in the base-case analysis presented; however, in accordance with NICE’s request, as an exploratory sensitivity, the revised MAA net budget impact analysis is replicated below, assuming 100% adherence.

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Inclusion of the proposed annual per-patient expenditure cap: Given the significant delays in review of the patient access scheme (PAS) submitted by Alexion for consideration, we are working directly with NHSE on the confidential commercial terms outlined in our proposed PAS for asfotase alfa. However, the risk-sharing arrangement proposed through the imposition of an annual patient expenditure cap remains the same, and we continue to put forth this per patient expenditure limit as a cost containment and risk-sharing mechanism for NICE, the Committee, and NHSE to consider in our discussions. Revised MAA Net Budget Impact – Results With the assumptions above, the number of patients estimated to be treated based on the MAA are presented below, accompanied by the estimates from Alexion’s original submission. Owing to the fact that in the intervening time since Alexion’s original submission in July 2015, more patients have been diagnosed and recommended for treatment according to the MAA eligibility criteria, the number of patients receiving treatment in Year 1 increases in the revised estimates based on the MAA. However, in subsequent years, the number of patients estimated to be treated increases at a slower rate than in Alexion’s original estimates, due to increases in diagnosis rates tempered by the assumption that the MAA eligibility rate will not change in diagnosed patients (in contrast to Alexion’s original submission, where treatment rates were also expected to increase over time). As such, net budget impact over the five-year period of the analysis is estimated to be lower than Alexion’s original estimate of £77,456,093 (assuming 80% adherence, and no PAS/annual per patient expenditure cap).

Number of patients estimated to be treated over 5 years

Year 1 Year 2 Year 3 Year 4 Year 5

Original estimates in July 2015 submission

Age 0-1 X XX XX XX XXX

Age 1-17 XX XXX XXX XX XXX

Age 18+ XX XX XX XX XXX

Total treated XX XXX XXX XXX XXX

Estimates based on MAA

Age 0-1 XX XX XX XX XXX

Age 1-17 XX XXX XXX XXX XXX

Age 18+ XX XX XX XX XX

Total treated XXX XXX XXX XXX XXX

Results of Alexion’s base-case net budget impact analysis that reflect the funding eligibility criteria in the MAA, assuming 80% adherence, are presented below. Over the five-year period of the analysis, net budget impact amounts to £68,603,932, averaging £13,720,786 per year. Table 1. Base-case net budget impact, without PAS/annual expenditure cap per patient

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Total costs, AA with market

access scenario

Total costs, AA without market

access scenario Net budget impact

Year 1 £9,504,214 £490,386 £9,013,828

Year 2 £12,316,684 £492,664 £11,824,020

Year 3 £14,348,988 £495,035 £13,853,952

Year 4 £16,409,490 £497,497 £15,911,994

Year 5 £18,500,182 £500,044 £18,000,138

TOTAL £71,079,558 £2,475,626 £68,603,932

Applying the proposed annual expenditure cap of £XXXXXX per patient to Alexion’s base-case net budget impact analysis, net budget impact over the five-year period falls to £36,234,052, averaging £7,246,810 per year. Table 2. Base-case net budget impact, with PAS/annual expenditure cap per patient

Total costs, AA with market

access scenario

Total costs, AA without market

access scenario Net budget impact

Year 1 £5,091,433 £490,386 £4,601,046

Year 2 £6,765,589 £492,664 £6,272,925

Year 3 £7,847,943 £495,035 £7,352,907

Year 4 £8,945,380 £497,497 £8,447,884

Year 5 £10,059,333 £500,044 £9,559,290

TOTAL £38,709,678 £2,475,626 £36,234,052

As noted in the discussion above of the net budget impact analysis assumptions, Alexion believes that an adherence rate of 100% is exceedingly high, and could not be achieved in long-term clinical practice. Nonetheless, consistent with the Committee’s preferred assumptions, results of a sensitivity analysis assuming 100% adherence are presented below. Over the five-year period of the analysis, net budget impact amount to £85,746,022, averaging £17,149,204 per year. Table 3. Sensitivity analysis: 100% adherence, without PAS/annual expenditure cap per patient

Total costs, AA with market

access scenario

Total costs, AA without market

access scenario Net budget impact

Year 1 £11,794,923 £490,386 £11,304,536

Year 2 £15,287,048 £492,664 £14,794,384

Year 3 £17,809,723 £495,035 £17,314,687

Year 4 £20,367,400 £497,497 £19,869,904

Year 5 £22,962,554 £500,044 £22,462,510

TOTAL £88,221,648 £2,475,626 £85,746,022

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Applying the proposed annual expenditure cap of £XXXXXX per patient to the sensitivity analysis assuming 100% adherence, the net budget impact over the five-year period falls to £38,879,851, averaging £7,775,970 per year. Table 4. Sensitivity analysis: 100% adherence, with PAS/annual expenditure cap per patient

Total costs, AA with market

access scenario

Total costs, AA without market

access scenario Net budget impact

Year 1 £5,423,367 £490,386 £4,932,981

Year 2 £7,239,292 £492,664 £6,746,629

Year 3 £8,390,809 £495,035 £7,895,774

Year 4 £9,558,387 £497,497 £9,060,890

Year 5 £10,743,621 £500,044 £10,243,577

TOTAL £41,355,477 £2,475,626 £38,879,851

As reflected in the above analyses, the annual expenditure cap per patient of £XXXXXX is estimated to significantly reduce the financial risk to the NHS/PSS, yielding decreases in the net budget impact over a five-year period by 47% under the assumption of 80% adherence to recommended dosing, and 55% under the assumption of 100% adherence. This represents substantial risk-sharing on the part of Alexion by assuming full responsibility for drug costs incurred above the cap level, thereby limiting potential net budget impact, particularly as patients grow over time, as well as enhancing the value for money of asfotase alfa across the patient population treated.

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III. Risk and Overall Cost to NHS/PSS – Revised Cost-Consequence Analysis (CCA)

In NICE’s letter of April 7, 2016, NICE enquired regarding the impact of MAA on the results of the CCA and the implied value for money of asfotase alfa. In addition, NICE addressed four “preferred assumptions” of the Committee for the CCA, recommending that these be amended in further analysis. These assumptions are addressed in turn below, before presenting results of the CCA reflecting the impact of the MAA on value for money of asfotase alfa. NICE Comment from April 7, 2016 Letter: Address any potential for bias when comparing the effect of asfotase alfa with best supportive care in the economic modelling when possible, such as year of diagnosis between baseline populations that influence prognosis (Section 5.17). Alexion is aware that in Section 5.17 of NICE’s initial ECD, it is noted that, “The Committee discussed the most appropriate method for modelling overall survival and the need for invasive ventilation…. The Committee recalled its earlier discussions around the natural history data and agreed that any potential for bias when comparing the effect of asfotase alfa with best supportive care should also be addressed in the economic modelling when possible (for example, year of diagnosis and differences between baseline populations that influence prognosis; see section 5.6).” Alexion certainly agrees with the Committee’s recommendation to address "any potential for bias when comparing the effect of asfotase alfa with best supportive care”," and, as such, appreciates the need to use best-available estimates of mortality for BSC-treated patients in modelling of patients with infantile-onset HPP. However, it is unclear that the ERG's approach to correcting this potential bias is the most appropriate use of available clinical evidence. For instance, the ERG's determination that only in year 2000 or later would historical-control patients have comparable supportive-care options as patients in the asfotase alfa clinical trials is arbitrary. The ERG even concludes that asfotase alfa-treated patients (from trials ENB-002-08, ENB-003-08, and ENB-010-10) "were all born and diagnosed after 2005" (page 183 of the ERG's report), so it is unclear why the ERG would choose 2000 rather than 2005 as the year after which to consider survival in historical controls as representative of comparable patients to those treated with asfotase alfa. The choice may be driven by concern for the small sample size reached by sub-sampling the historical controls. In using the totality of historical-control survival data, Alexion intended to provide as robust an estimate of survival for BSC-treated patients as possible, using all data available; if survival is to be considered in a sub-sample of the historical controls, a sound basis for the definition of the sub-sample should be provided as small-sample bias is also an important consideration in modelling ultra-rare diseases. As such, treatment of survival and invasive-ventilation are not adjusted in the ensuing analyses.

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NICE Comment from April 7, 2016 Letter: No reduction in acquisition cost after 10 years (Section 5.18).

As noted in Alexion’s responses to Sections 4.38 and 5.18 of the ECD, it is impossible for Alexion to prove that the price of asfotase alfa will decrease after the loss of data exclusivity and the introduction of biosimilar competition, as these events are in the future. However, Alexion believes that on the strength of historical precedent, the likelihood of this scenario being realised is high, much more so than NICE’s implicit proposition that the cost of asfotase alfa will be maintained at its current level over the next 50 years. The price of all pharmaceutical products in the UK has always declined over time. Price increases are almost never permitted in the UK, and price erosion occurs through competitive pressure, including the introduction of generics or biosimilars, through regional or national procurement exercises, or through mandatory price reductions. Such industry-wide price reductions have been levied frequently in the past, with a 7% price reduction mandated in the 2005 PPRS agreement and a further 6% reduction mandated in the 2009 re-negotiation. The assumed introduction of a biosimilar of asfotase alfa is reasonable given current industry experience. The biosimilar market in Europe is quickly becoming established and as more biosimilar manufacturers enter the market, the greater the likelihood of biosimilar competition and pressure on originator prices. While there was initial scepticism that generic competition would occur for orphan drugs, a biosimilar for idursulfase (Elaprase®), (Hunterase, Green Cross) has already been introduced in international markets where Elaprase no longer has data exclusivity, and it is clear that biosimilar manufacturers are pursuing interests in orphan drugs.(6) While the exact impact that this competition will have on asfotase alfa is unknowable, the 30% estimate used by Alexion in its modelling is a credible estimate and an appropriate base case assumption for the price change. This estimate was based on observed price decreases for biologic treatments in Europe and the US. For example, Table 1 in Mulcahy et al. (2014) (7) presents various estimates of the price reduction for biologics occurring due to biosimilar entry; the US Congressional Budget Office (CBO) (2008) estimate, which is for all biologics, appears most suitable to an orphan drug (others refer to the top-selling biologics), and indicates "20% to 40%, varies by product and increasing over time.(7) Experience to date in Europe shows significant variance in price differentials between reference products and biosimilars. For example, recent reports of prices for biosimilar infliximab have suggested price reductions of 45% to 72% vs the originator product.(8) In the US, estimates of cost savings from biosimilars range from 12% to 51%.(7) In the UK, NICE has stated that “biosimilars have the potential to offer the NHS considerable cost savings, especially as they are often used to treat long-term conditions”.(9)

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Experience in haemophilia suggests that these estimates are likely to be true for ultra-orphan products like asfotase alfa as well. Whilst not technically biosimilars, there are now six recombinant FVIII biologic treatments available for haemophilia A and prices in the UK have fallen significantly as a result of increased price competition; in 2013, prices were 50% lower than in 2007. As such, Alexion continues to believe that 30% is a realistic estimate of price reduction at 10 years, and as stated above, considerably more likely than the suggestion that the cost of asfotase alfa will be maintained at its current level over the next 50 years. As a result, in the ensuing analyses, the 30% price reduction due to loss of exclusivity at 10 years is modelled.

NICE Comment from April 7, 2016 Letter: Representative costs of intensive care and invasive ventilation (Section 5.19).

The Committee stated in Section 5.19 of the ECD that: “The Committee was concerned that the costs of intensive care and invasive ventilation were not sufficiently captured in the company’s model. The Committee concluded that the costs associated with managing paediatric-onset hypophosphatasia had been underestimated by the company". In estimating the cost of HPP health states Alexion worked with five UK HPP clinical experts to elicit standard treatment protocols for patients with varying severity of disease. There was some degree of heterogeneity in the estimates provided, reflecting the small number of patients each expert had managed. It is possible that expert feedback on the costs used in the base case model reflect those with experience of the more intensive care level. We have therefore updated the estimates in the model to represent the estimates from the three treating physicians who provided the higher estimates of resource use for the different health states. This change alone did not materially affect the results of the economic model. Changes to the costs of disease management are reflected in the table below.

Estimates from original submission

Updated estimates reflecting highest

resource use

Age ≤ 5 years - direct medical costs (annual)

SLI £49,592 £128,304

SLII £51,913 £130,880

SLIII £52,003 £132,750

SLIV £57,277 £141,262

Age > 5 years - direct medical costs (annual)

SLI £459 £1,399

SLII £2,780 £3,976

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Estimates from original submission

Updated estimates reflecting highest

resource use

SLIII £2,870 £5,846

SLIV £8,144 £14,358

Invasive ventilation costs (annual)

Cost £267,824 £399,467

NICE Comment from April 7, 2016 Letter: A 3.5% discount rate for costs and benefits (Section 5.21). As is stated in Section 5.21 of NICE’s ECD:

“the Committee was aware from NICE’s guide to methods of technology appraisal (2013) that a non-reference case ‘discount rate of 1.5% for costs and benefits may be considered by the Committee if it is highly likely that, on the basis of the evidence presented, the long-term health benefits are likely to be achieved. Further, the Committee will need to be satisfied that the introduction of the technology does not commit the NHS to significant irrecoverable costs. The Committee acknowledged that asfotase alfa may restore some people (for example, infants) who would otherwise die or have a very severely impaired life to full or near full health. However, it was not convinced on the balance of the clinical evidence, and the clinical expert and patient expert testimonies, that this was the case for all people with paediatric-onset hypophosphatasia (see Sections 5.1, 5.2, 5.2 and 5.9). The Committee agreed that there was considerable uncertainty around whether the treatment effect would be maintained for the person’s lifetime, and that it would have been appropriate for the company to explore a scenario in which the treatment effect diminished over time. Therefore, the Committee was not sufficiently satisfied that the introduction of asfotase alfa did not commit the NHS to significant irrecoverable costs when considering the entire population included in the marketing authorisation. The Committee concluded it was more appropriate for the company to include a discount rate of 3.5% in its base-case analysis.”

Alexion continues to disagree with the Committee’s conclusion that a 3.5% discount rate should be used in the base-case analysis for asfotase alfa, on the basis of the evidence provided demonstrating the clinical value of asfotase alfa, and also for consistency with estimates for eculizumab for atypical haemolytic uraemic syndrome (aHUS) and elosulfase alfa for MPS IVa. Asfotase alfa meets the criteria for applying the 1.5% discount rate to the same extent as both elosulfase alfa and eculizumab. Unfortunately, the issue of the inconsistency of discount rates applied to asfotase alfa versus elosulfase alfa was not discussed during the public session at the last meeting of the Committee, despite the Chair flagging it as an important issue for discussion at the beginning of the meeting. In life-limiting, childhood-onset diseases such as HPP, aHUS, and MPS IVa, discount rates for treatment benefits have a disproportionate impact on the perceived value of the treatment. Recognising this, as noted in Section 5.21 of the asfotase alfa ECD,

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NICE has issued supplementary guidance on situations in which the Committee has the discretion to apply a lower rate of 1.5% in situations where the discount rate had a material effect on the decision. Specifically, in its Methods of Technology Appraisal, NICE states that a discount rate of 1.5% may be considered under situations where:

1. Treatment restores people who would otherwise die or have a very severely impaired life to full or near full health;

2. Analyses are very sensitive to the discount rate used; 3. Situations for which it is highly likely that, on the basis of the evidence presented,

the long-term health benefits are likely to be achieved; and 4. The introduction of the technology does not commit the NHS to significant

irrecoverable costs. NICE has applied this lower rate in two previous evaluations: elosulfase alfa for MPS IVa and eculizumab for aHUS. The Committee’s decision on discount rate for asfotase alfa is incongruous with previous decisions on this issue, specifically with the previous two completed HST submissions for eculizumab for aHUS and elosulfase alfa for MPS IVa. It should be recognised that for both treatments for which NICE has applied the 1.5% discount rate, there is uncertainty around these criteria that is inherent in rare/ultra-rare diseases treatments. Fundamentally, it is impossible to know the lifetime impact of a drug at the point of marketing approval. Consequently, the Committee’s decision to apply a 3.5% discount rate to asfotase alfa and a 1.5% discount rate to elosulfase alfa and eculizumab indicates that the Committee believes that there is a material difference in the situation for asfotase alfa versus elosulfase alfa and eculizumab that could justify treating these medicines differently. This is explored in the table below.

Criteria Elosulfase

alfa MPS Iva Eculizumab

aHUS Asfotase alfa HPP

Sebelipase alfa LAL-D

1. Treatment restores people to full or near full health

Addresses underlying cause of disease?

Demonstrated survival benefit in trial?

X X * **

Large modelled lifetime QALY gain?

2. Analyses are very sensitive to the discount rate used

Difference in lifetime QALY gains between 3.5% and 1.5% (manufacturer estimate)

7.9 9.5 10.8 10.5

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Criteria Elosulfase

alfa MPS Iva Eculizumab

aHUS Asfotase alfa HPP

Sebelipase alfa LAL-D

3. The long-term health benefits are likely to be achieved

Length of trial follow-up

72 weeks 104 weeks

Studies 002/003 = 84

months

Studies 006/008 – 60

months

Study 09-10 = 24 months

52 weeks

4. Does not commit the NHS to significant irrecoverable costs.

Budget impact*** Approximately

£130.8M in committee

papers (p. 17)

£139.9M in original

submission

£77.5M in original

submission to £68.6M based on

MAA

£53.5M in original

submission to £63.7M

(using 20mg vial vs. 5mg)

Proposed MAA limiting decision to specified time period

X

* Liese J, Hofmann C, Harmatz P, et al. Efficacy and Safety of Asfotase Alfa in Patients with Infantile Hypophosphatasia Treated for up to 3.5 Years: Results from a Phase II, Open-Label, Uncontrolled Study. Poster preview presented at the Endocrine Society Annual Meeting and Expo, Boston, April 3, 2016. ** Jones SA, et al. Effect of sebelipase alfa on survival and liver function in infants with rapidly progressive lysosomal acid lipase deficiency. Molecular Genetics and Metabolism, 2015; Volume 114, Issue 2, S59. ***Budget estimates are cumulative 5-year totals.

As shown above, all four therapies illustrate the following:

Address the underlying cause of the disease;

Were estimated to provide substantial lifetime QALY gains;

Showed large sensitivity to discount rates in lifetime QALY gains;

Had follow up periods between 1 and 2 years; and

Had comparable budget impacts with asfotase alfa and sebelipase alfa having lower estimated 5-year total budget impact than elosulfase alfa and eculizumab in aHUS.

All but one (eculizumab) proposed a Managed Access Agreement to limit NHS financial exposure to a defined time period and patient population. On the basis of these facts, there appears to be no material difference between the treatments on the criteria considered that provides clear justification for treating these products differently in respect to discount rates. Owing to the lack of material evidence differentiating the situation of asfotase alfa from those of elosulfase alfa and eculizumab, and on the basis of the evidence presented of

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the clinical value of asfotase alfa treatment, in the ensuing analyses, a discount rate of 1.5% for costs and benefits is therefore used. However, in order to be fully responsive to the Committee’s request, as a sensitivity analysis, results using a 3.5% discount rate for costs and benefits are also presented. The Committee should kindly note that the sensitivity analysis demonstrates that if the same discount rate is applied to costs and benefits, the value for money of asfotase alfa (if measured on a cost-per-QALY basis) is similar regardless of whether a discount rate of 1.5% or 3.5% is used, due to the fact that the incremental costs and incremental QALYs vary in similar fashion (suggesting similarity in their distribution over the lifetime horizon of the model). The higher discount rate substantially reduces the lifetime incremental QALYs associated with asfotase alfa vs. best supportive care (BSC), which inaccurately characterizes the clinical value of the product. For the reasons provided above, Alexion therefore urges NICE to use a 1.5% discount rate for costs and benefits, due to the significant clinical value that asfotase alfa provides for patients, as well as for consistency with precedent that NICE has set with its previous HST evaluations. In accordance with the responses above to the Committee’s “preferred assumptions” listed in the letter received from NICE on April 7, 2016, results of the cost-consequence analysis (CCA) are presented below to address the impact of the revised MAA on the value for money of asfotase alfa. In particular, the following two points from NICE’s April 7, 2016 letter are addressed: NICE Comment from April 7, 2016 Letter: No cost-consequence results have been presented that demonstrates how the proposed MAA improves the value proposition in the broad population covered by your Marketing Authorisation. NICE Comment from April 7, 2016 Letter: No cost-consequence results have been presented that demonstrates how the proposed MAA improves the value proposition in a sub-population(s) for whom treatment may have the greatest impact.

As described in the ECD for asfotase alfa, the Committee heard commentary from various stakeholders that there were well-defined younger populations with life-threatening disease, whereas symptoms and impacts in the populations who had later onset of disease were much more variable

Focusing on the population that receives treatment to those in greatest need can result in reducing the overall cost to the NHS.

The Committee felt that you should therefore consider submitting analysis of the costs and benefits associated with treating disease in populations with the greatest capacity to benefit (for example, perinatal- or infantile-onset hypophosphatasia or equivalent) in whom the treatment need is greatest – These analyses should be undertaken both with and without incorporating the impact of the patient access schemes.

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As described in detail above, the proposed MAA in Attachment A outlines clinical criteria for treatment of patients who will benefit most from asfotase alfa. The CCA developed for NICE was parameterized based on the HPP clinical trials programme (i.e., baseline disease-severity distributions and transition probabilities were calculated from the trials). As a result, the extent to which the CCA results reflect the value proposition of asfotase alfa in the population covered by the Marketing Authorisation, depends on the similarity of the MAA clinical criteria for treatment and the inclusion criteria of the HPP clinical trials programme. The Marketing Authorisation for asfotase alfa was based on efficacy and safety data from 71 patients who were treated with asfotase alfa (68 with paediatric-onset HPP [48 with perinatal/infantile-onset HPP, 20 with juvenile-onset HPP], 2 with adult-onset, and 1 patient with an unknown form of HPP). With the exception of the latter 3 patients, the study population was consistent with the expectation of the clinical stakeholders advising on the MAA, which is that the majority of patients expected to be treated under the MAA are those of any age with perinatal/infantile-onset disease. Further background on the study populations is described below:

Study 02-08/03-08 was an open-label, non-randomised, non-controlled study. Eleven patients were enrolled and nine patients entered the extension phase of the study. Onset of HPP was under 6 months in all patients. Age at inclusion in the study was between 0.5 to 35 months.

Study 06-09/08-10 was an open-label, non-randomised study. Thirteen patients were enrolled and 12 patients entered the extension phase of the study. Five patients presented with HPP at less than 6 months age (perinatal/infantile) and 8 patients presented between 6 months and 18 years of age (juvenile). The median distance walked at baseline was 350m (minimum 191m; maximum 491m). Of the 13 patients, 6 had bone pain severe enough to limit mobility, 5 had bone pain severe enough to require analgesic medication, 6 had joint pain; and 6 of 13 had muscle pain.

Study 09-10 was an open-label, randomised study. Nineteen patients were enrolled and 18 patients are on-going in the study. Onset of HPP was under 6 months of age in 16 patients, between 6 months and 18 years of age in 4 patients and over 18 years of age in 2 patients. Of these patients, 18 had a history of fracture with a median number of fractures of 6 per patient. Eighteen patients had bone pain severe enough to limit activity and 5 required the use of assistive devices. All patients were below the normal range for age on 6 Minute Walk Test (6MWT).

The clinical trials population for asfotase alfa is reflective of the range of presentations of patients in England and demonstrates that disease severity, as assessed by impaired

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mobility, intractable pain and fractures (adults) may vary. The clinical trials population reflects a broad range in presentation of disease, and whilst all patients responded to treatment, the MAA criteria have been designed specifically to ensure access to treatment for those patients most in need of treatment. As noted in Section 9.9.5 of Alexion’s original submission (page 240): “The AA clinical trials included a broad range of HPP patients who are considered representative of the general population of patients in England. No criteria, beyond the clinical diagnosis of HPP, are required to select patients who will benefit from AA”. Considering that a “broad range of HPP patients” was included in the trials, and that they were more representative of the average HPP patient than of the more severe subset meeting the MAA eligibility criteria, it is likely that the CCA, which was parametrized based on the trials, provides a conservative estimate of asfotase alfa’s value proposition for patients eligible for treatment according to the MAA. However, due to the limited sample size in the clinical-trials programme, and the lack of data in the trials allowing for patients to be retrospectively selected as meeting the MAA eligibility criteria, refinement of the broader CCA parametrization based on the MAA eligibility criteria is not possible at this time. Revised MAA Cost Consequence Analysis (CCA) The proposed MAA includes specific eligibility criteria that target treatment to those HPP patients for whom experts believe the clinical benefit of using asfotase alfa will be highest. These patients represent the sub-population/sub-group within the total HPP patient population indicated per the European marketing authorisation for which asfotase alfa has the highest value proposition. Focusing on the patient sub-population in which the benefit associated with use of asfotase alfa is expected to be the greatest allows for increased certainty around the modelled clinical benefit, and the improvement in value for money, because, as mentioned above, the modelled benefit is likely conservative for these patients. Further, by considering the specific patients who meet the MAA’s eligibility criteria, we are able to match the patients to the age-based sub-groups presented in the CCA, in order to improve accuracy of the benefits estimated for these patients. In the table below, the incremental QALY gains and incremental lifetime costs are presented by age sub-group from Alexion’s original submission, to illustrate the magnitude of benefit across different age groups. As reflected in Section 12.5.12 of Alexion’s original submission (see “Table D31: Multi-way Sensitivity Analysis Results”), the incremental QALY gains associated with asfotase alfa treatment versus best supportive care (BSC) tend to decrease as the baseline age modelled increases. This is reflected in the cost-consequence analysis (CCA) results in the table below, using a discount rate of 1.5% for costs and benefits, and with/without application of the annual expenditure cap per patient of £XXXXXX.

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Incremental QALY gains using discount rate of 1.5% for costs and benefits

Base case Perinatal/ infantile Age 0-4 Age 5-11 Age 12-17 Age 18+

Without annual per patient expenditure cap (1.5% discount rate for costs and benefits)

Incr. costs £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX

Incr. QALYs 25.04 31.70 28.99 24.87 22.33 5.07

With annual per patient expenditure cap (1.5% discount rate for costs and benefits)

Incr. costs £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX

Incr. QALYs 25.04 31.70 28.99 24.87 22.33 5.07

As described above, while Alexion continues to believe that, based on NICE’s Methods of Technology Appraisal, use of a discount rate of 1.5% is appropriate for evaluation of asfotase alfa given its clinical value and previous treatment of elosulfase alfa for MPS IVa and eculizumab for aHUS, as a sensitivity analysis, results of the CCA are also presented below using a 3.5% discount rate for costs and benefits.

Incremental QALY gains using discount rate of 3.5% for costs and benefits

Base case Perinatal/ infantile

Age 0-4 Age 5-11 Age 12-17 Age 18+

Without annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX

Incr. QALYs 14.25 18.21 16.66 14.22 13.10 3.72

With annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs £XXXXXXX £XXXXXX £XXXXXXX £XXXXXXX £XXXXXXX £XXXXXXX

Incr. QALYs 14.25 18.21 16.66 14.22 13.10 3.72

Based on the survey of expert centres that manage patients with HPP in England, clinical experts identified that X paediatric patients and X patients over 18 years of age with paediatric-onset HPP would currently meet the MAA eligibility criteria. In order to assess the value for money of asfotase alfa for these patients, we therefore map these X patients to the age-based sub-populations for which CCA results are presented above. Amongst the X paediatric patients, X have perinatal-onset HPP and X has juvenile-onset HPP. The X perinatal-onset patients consist of X patients receiving asfotase alfa via compassionate-use (current ages of XXXXXXXXXXXXXXXXXXX), X clinical-trial patients (current ages of XXXXXXXXXXXXXXXXXXXX), and X newborn patients. The XXXXXXXX patient identified is currently not receiving treatment, and Alexion therefore is not able to identify exact age, XXXXXXXXXXXXXXXXXXXXXXX; XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX. The number of patients eligible for treatment with asfotase alfa according to the MAA is summarized below, by age range:

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Age group in cost-consequence analysis

Perinatal/ infantile

Age 0-4 Age 5-11 Age 12-

17 Age 18+ Total

Patients meeting MAA eligibility criteria

X X X X X XX

Based on the distribution of MAA-eligible patients across these age groups, the weighted-average QALY gain for MAA-eligible patients less than 18 years of age receiving asfotase alfa is 27.5 QALYs (discounted at a 1.5% rate), versus 25.04 QALYs for the base case analysis. The average incremental lifetime costs for asfotase alfa for MAA-eligible patients less than 18 years of age is £XXXXXXXX (discounted at a 1.5% rate) versus £XXXXXXX for the base case results. In patients over 18 years of age, the incremental QALYs are smaller on average (5.07), but equally the discounted lifetime costs are also lower (£XXXXXXX). It should be noted that in modelling age-based sub-groups, the groups were parametrized based on the average patient within the relevant age range in the asfotase alfa clinical trials. For patients aged 18 and over in the asfotase alfa clinical trials, the average age was 51.6 years; as such, in the CCA, incremental results for “Age 18+” patients reflect the modelled experience of a patient aged 51.6 years at baseline. For many patients younger than 51.6 years at baseline (i.e., start of treatment), the QALY gains are much larger. As can be seen in the figure below, there is a clear relationship between the age of patients greater than 18 years and the magnitude of QALY gains.

In summary, the magnitude of clinical benefit as measured by incremental QALYs is highest in patients who are less than 18 years of age (27.5 QALYs) and then falls as

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age progresses until the QALY gains are <10 years in patients over the age of 40. Regardless, the QALY gains derived even at the lower end are in line with the gains of other products funded through the NHSE. Value for money comparison with eculizumab in aHUS NICE and the Committee expressed interest in comparing the value for money offered by asfotase alfa in HPP with eculizumab in aHUS, which is explored below. It is important to remember that despite the fact that both diseases are ultra-rare in nature, aHUS and HPP are two very different diseases for which the characteristics of the patient populations are also different. As can be seen from the table above, the base case incremental QALY gains for both drugs are extremely high and quite similar: 25.04 for asfotase alfa in HPP and 25.22 for eculizumab in aHUS. In the population less than 18 years of age with paediatric-onset HPP, asfotase alfa provides a greater QALY gain than eculizumab in aHUS, at 27.5 QALYs. In addition, the Evidence Review Group (ERG) and Alexion were closely aligned on the magnitude of the QALY gain from asfotase alfa (24.17 and 25.04, respectively, when discounted at 1.5%). Further, there was greater reduction of the expected benefit for eculizumab in aHUS when applying a 3.5% discount rate (10.14 QALYs calculated by the ERG) than for asfotase alfa in HPP (14.2 QALYs calculated by the ERG). Finally, by more narrowly defining the patient population eligible for treatment, the application of the proposed MAA for asfotase alfa provides further confidence in the realisation of these clinical benefits in a real world clinical setting. In summary, the QALY gain with asfotase alfa is similar across the entire patient population to that obtained by eculizumab, but greater in the patients less than 18 years of age. The confidence around the asfotase alfa estimate may be considered to be higher due to the alignment of estimates between Alexion and ERG, the lesser impact of the discount rate, and the application of the MAA which will target treatment at patients with the greatest potential to benefit. In regard to the lifetime costs of the two treatments, for asfotase alfa in HPP, when considering the analysis in which the patient expenditure cap is included, the incremental cost is estimated to be £XXXXXXX. For the cohort of patients less than 18 years old, it is £XXXXXXX and for the patients older than 18 years of age, it is £XXXXXXX. The equivalent cost for all patients modelled to receive eculizumab in aHUS is £XXXXXXX. The difference in lifetime cost between eculizumab and asfotase alfa is driven by two primary factors:

30

Age at treatment initiation. The incremental lifetime cost associated with asfotase alfa is generally higher than that for eculizumab mainly because the duration of treatment is longer for HPP patients who are, on average, diagnosed significantly younger than aHUS patients. In the eculizumab in aHUS economic model, patients’ treatment is commenced on average at a baseline age of 28 years, whereas in the HPP analysis the average baseline age is 5.8 years, and hence patients receive treatment for an additional 22.2 years versus eculizumab. If the age at initiation is set the same between the two models at 28 years, then the average incremental cost for asfotase alfa is £XXXXX (versus £XXXXX with eculizumab in aHUS). Therefore, approximately half of the difference in incremental cost between the two treatments is driven by the younger patient cohort in HPP. Annual cost per patient. The other driver of the additional incremental lifetime cost is a slightly higher average per-patient annual cost for asfotase alfa versus eculizumab, which is consistent with the significantly lower prevalence of disease. This accounts for the difference in incremental lifetime cost of approximately £XXX between asfotase alfa (£XXX) and eculizumab (£XXXX) after adjusting for age of treatment initiation. The higher per-patient cost for asfotase alfa is mostly explained by the lower prevalence of patients suitable for asfotase alfa in paediatric-onset HPP versus aHUS patients. It is well recognised in rare/ultra-rare diseases that price and prevalence are correlated and that this is necessary to incentivise research in diseases with very low prevalence. In total, XX patients are expected to receive asfotase alfa in the UK at Year 5 of the budget impact analysis incorporating the MAA criteria, compared to XXX for eculizumab in aHUS, and the Year 5 budget impact estimates are likewise lower for asfotase alfa (£13.7M vs £28.0M, on average per year over the five-year period of the analysis). Importantly, it should be noted that the patient-level expenditure cap reduces the average annual cost for asfotase alfa by approximately two-thirds and thus represents a very substantial discount to the NHS while also bringing costs more in line with eculizumab for aHUS.

Value for Money Conclusions The magnitude of QALY gains with asfotase alfa is very high compared with any other drug, and closely aligned between Alexion and the ERG’s estimates. In addition, the proposed MAA targets treatment to those patients who will benefit most from treatment with asfotase alfa. In short, the base case QALYs for eculizumab are estimated to be 25 by both Alexion and the ERG. MAA-eligible patients under 18 years of age have even greater QALY gains (27.5) whereas patients over 18 years of age gain fewer QALYs, but also have lower lifetime costs for treatment. It also should be noted that QALY gains fall gradually beyond the age of 18. The inclusion of the per-patient cost cap reduces lifetime costs by two-thirds. Although the incremental cost of asfotase alfa is

31

higher than eculizumab, half of that additional cost is due to an earlier age of treatment initiation with asfotase alfa than with eculizumab. The other half of the additional cost is due to a higher per-patient annual cost that is explained by the smaller patient population in HPP vs aHUS. Further, the proposed annual per-patient expenditure cap reduces lifetime costs for HPP patients by two-thirds, representing significant value for money to the NHS.

IV. Conclusion Again, thank you for the opportunity to submit a revised MAA, outlining consensus criteria for the use of asfotase alfa in the treatment of paediatric-onset HPP. As advised by the Committee, Alexion worked directly with treating clinicians, the representative patient organisation and with NHSE to more narrowly define the scope of patients eligible for treatment to those that would most benefit and for which asfotase alfa represents the greatest value for money. We are confident that our revised proposed MAA, combined with our confidential financial risk-sharing proposal, better address the Committee’s cost containment objectives both by limiting access to treatment only for the small number of patients in England suffering from this ultra-rare and devastating disease who are most in need, and by directly limiting the overall financial exposure to the NHSE. Alexion continues to be pleased that the Committee recognises the clinical value of asfotase alfa, and the importance of bringing this therapy to patients with this ultra-rare disorder who have no other treatment options. We remain committed to working with NICE and NHSE to ensure that patients with paediatric-onset HPP in England who can benefit most from asfotase alfa have timely access to therapy. As always, we remain fully available to answer any additional questions the Committee may have, and look forward to finalising an agreement in support of patients as soon as possible.

32

V. References

1. Kishnani PS, Madson KL, Whyte MP, Fujita KP, Rockman-greenberg C. Biochemical and physical function outcomes in adolescent and adults with hypophosphatasia treated with asfotase for up to 4 years: Interim results from a Phase II Study. Oral presentation at the ENDO 2016 Annual Meeting; 3 April 2016; Boston, MA, USA.

2. Whyte MP, Zhang F, Wenkert D, McAlister WH, Mack KE, Benigno MC, et al. Hypophosphatasia: validation and expansion of the clinical nosology for children from 25 years experience with 173 pediatric patients. Bone [Internet]. 2015;75:229–39. Available from: http://linkinghub.elsevier.com/retrieve/pii/S8756328215000678.

3. Datye K a, Moore DJ, Russell WE, Jaser SS. A Review of Adolescent Adherence in Type 1 Diabetes and the Untapped Potential of Diabetes Providers to Improve Outcomes. Curr Diab Rep. 2015;15(8):621.

4. Hoffman RP. Adolescent adherence in type 1 diabetes. Compr Ther [Internet]. 2002;28(2):128–33. Available from: http://ovidsp.ovid.com/ovidweb.cgi?T=JS&PAGE=reference&D=emed5&NEWS=N&AN=2002212252.

5. Pugatsch T, Shoseyov D, Cohen-Cymberknoh M, Hayut B, Armoni S, Griese M, et al. Adherence pattern to study drugs in clinical trials by patients with cystic fibrosis. Pediatr Pulmonol [Internet]. 2015;(October):n/a – n/a. Available from: http://doi.wiley.com/10.1002/ppul.23344

6. Biospase.com. Green Cross Gains Market Approval With the World ’ s 2nd Orphan Drug for Hunter Syndrome in South Korea [Internet]. 2012 [cited 2015 Jun 1]. Available from: http://www.biospace.com/News/green-cross-gains-market-approval-with-the-worlds/247464.

7. Mulcahy A, Predmore Z, Mattke S. The Cost Savings Potential of Biosimilar Drugs in the United States. Rand [Internet]. 2014; Available from: http://www.rand.org/pubs/perspectives/PE127.html.

8. GABI online. Biosimilar infliximab offered to French hospitals at 45% discount posted 31/07/2015 [Internet]. 2015 [cited 2015 Aug 24]. Available from: gabionline.net/Biosimilars/News/Biosimilar-infliximab-offered-to-French-hospitals-at-45-discount.

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9. NICE. Evaluating biosimilar medicines [Internet]. 2015 [cited 2015 Aug 24]. Available from: www.nice.org.uk/news/article/evaluating-biosimilar-medicines.

34

Attachment A: Revised Proposed Managed Access Agreement (MAA) Please see separate document provided with the complete Attachment A.

35

Attachment B: Schematic for Revised Proposed Managed Access Agreement

36

Attachment C: Stakeholders Consulted in Development of MAA Below is the list of stakeholders consulted in the development of the proposed MAA: Clinical Experts Professor Nick Bishop, Professor of Paediatric Bone Disease, University of Sheffield Professor Zulf Mughal, Consultant in Paediatric Bone Disorders and Honorary Clinical Professor of Child Health, Department of Paediatric Endocrinology Royal Manchester Children's Hospital Dr. Nick Shaw, Consultant Paediatric Endocrinologist and Clinical Lead for Complex Childhood Osteogenesis Imperfecta, Birmingham Children's Hospital Professor Bill Fraser, Professor of Medicine at the University of East Anglia Medical School Professor Richard Eastell, Professor of Bone Metabolism, University of Sheffield Patient Group Representative Lindsay Weaver, Executive Director, Children Living with Inherited Metabolic Bone Diseases (CLIMB) NHS England Representative Edmund Jessop, Medical Advisor, NHS England

37

Attachment D: Revised Budget Impact Model Please see Excel spreadsheet attached.

38

Attachment E: Revised Cost-Consequence Model Please see Excel spreadsheet attached.

39

Attachment F: HST PAS Evidence Submission Template Please see separate Word document attached, including proposed patient registration form.

1 of 1

The contents of this document have been

omitted as they are confidential

in collaboration with:

ADDENDUM TO:

Asfotase alfa for paediatric-onset hypophosphatasia

ERG critique of cost-effectiveness model submitted 23

th May 2016

Prepared by: Maiwenn Al, HE lead

Cost-consequences analyses

The company has submitted a revised cost-consequence analysis on May 23 2016, to show the

proposed changes in light of the revised Market Access Agreement (MAA). In this section

first the changes made by the Company are presented, followed by the results and a critique

from the ERG.

The ERG considered the arguments and justifications included in their document insufficient

to warrant a revision of the ERG base case, except for the changes in health state costs.

Hence, a revised ERG base case is presented with and without the annual cost cap of

******** proposed in the PAS.

Changes made by the Company:

Increase estimates of resource use for the different health states

An annual drug cost cap per patient of ********

Changes proposed in the ECD section 5.21 which were not accepted as a base case by the

Company but addressed in a sensitivity analysis:

Discount rate of 3.5% instead of 1.5%

Other changes proposed in the ECD which were not accepted by the company:

Adjustment of survival and invasive-ventilation data based on year of diagnosis

Keeping price of asfotase alfa constant instead of applying 30% reduction at 10 years

Company base case results

The changes made by the company to the costs of disease management are reflected in table 1

below. These changes were made based on Section 5.19 of the ECD: “The Committee was

concerned that the costs of intensive care and invasive ventilation were not sufficiently

captured in the company’s model. The Committee concluded that the costs associated with

managing paediatric-onset hypophosphatasia had been underestimated by the company".

The cost of HPP health states were based on estimates provided by five UK HPP clinical

experts. For the new estimates the estimates from the three treating physicians who provided

the higher estimates of resource use for the different health states were used.

Table 2 presents the results of the changes made by the company, both with and without the

inclusion of the annual drug cost cap per patient.

Table 1 Estimates of cost per health state used in the new Company base case

Estimates from

original submission

Updated estimates

reflecting highest

resource use

Age ≤ 5 years - direct medical costs (annual)

SLI £49,592 £128,304

SLII £51,913 £130,880

SLIII £52,003 £132,750

SLIV £57,277 £141,262

Age > 5 years - direct medical costs (annual)

SLI £459 £1,399

SLII £2,780 £3,976

SLIII £2,870 £5,846

SLIV £8,144 £14,358

Invasive ventilation costs (annual)

Cost £267,824 £399,467

Table 2 New Company base case with and without price cap (discount rate 1.5%)

Base case

Perinatal/

infantile Age 0-4 Age 5-11 Age 12-17 Age 18+

Base case original Company submission

Incr. costs ********** ********** ********** ********** ********** **********

Incr. QALYs 25.04 31.70 28.99 24.87 22.33 5.07

New base case without annual per patient expenditure cap (1.5% discount rate)

Incr. costs ********** ********** ********** ********** ********** **********

Incr. QALYs 25.04 31.70 28.99 24.87 22.33 5.07

New base case with annual per patient expenditure cap (1.5% discount rate)

Incr. costs ********** ********** ********** ********** ********** **********

Incr. QALYs 25.04 31.70 28.99 24.87 22.33 5.07

ERG comment:

The results presented by the company could be replicated by the ERG. Given the high unit

costs associated with many of the resources use and the uncertainty associated with the

resource use estimates, the ERG can accept that the newly provided health state costs are

plausible estimates. The ERG concurs that the impact of increasing the health state costs on

the incremental costs is minimal.

Company scenario analysis results

In table 3 the results are presented of the scenario analysis the manufacturer performed to assess the

impact of using the higher discount rate per the ECD section 5.21; results are presented with and

without the inclusion of the annual drug cost cap per patient.

Table 3 Scenario on new Company base case using discount rate of 3.5%

Base case Perinatal/

infantile Age 0-4 Age 5-11 Age 12-17 Age 18+

Without annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs ********** ********** ********** ********** ********** **********

Incr. QALYs 14.25 18.21 16.66 14.22 13.10 3.72

With annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs ********** ********* ********* ********** ********** **********

Incr. QALYs 14.25 18.21 16.66 14.22 13.10 3.72

ERG base case

In the below table we present the ERG base case in which we have changed the cost per

health state according to table 1. This table can be compared to table 2 for the results with

1.5% discounting and with table 3 for the results with 3.5% discounting. From this, it is clear

that the ERG base case leads to slightly higher cost estimates and slightly lower QALY

estimates.

Table 4 ERG base case results using the company’s model, with and without price cap (discount

rate 1.5%)

Base case Perinatal/

infantile Age 0-4 Age 5-11 Age 12-17 Age 18+

ERG base case without annual per patient expenditure cap (3.5% discount rate for costs and

benefits)

Incr. costs ********** *********** *********** ********** ********** **********

Incr. QALYs 14.1 15.6 14.7 14.2 14.1 9.8

ERG base case with annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs

********** ********** ********** ********** **********

*

**********

Incr. QALYs 14.1 15.6 14.7 14.2 14.1 9.8

ERG scenario without annual per patient expenditure cap (1.5% discount rate for costs and benefits)

Incr. costs ********** *********** *********** ********** ********** **********

Incr. QALYs 24.2 27.3 25.6 24.2 23.3 13.2

ERG scenario with annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs ********** ********** ********** ********** ********** ***********

Incr. QALYs 24.2 27.3 25.6 24.2 23.3 13.2

Budget impact analysis

The proposed changes, by the company, to the budget-impact analysis to reflect the revised

Market Access Agreement (MAA) are discussed in the section. First the changes made by the

Company are presented, followed by the results and a critique from the ERG.

Changes made by the Company:

Increased diagnosis rates

MAA eligibility rates

Treatment rates

Modified drug costs for age 1-17 patients

An annual drug cost cap per patient of ********

Changes proposed by the ECD section 5.11 which were not accepted as a base case by the

Company but addressed in a sensitivity analysis:

Adherence rate of 100% instead of 80%

Diagnosis rates

Because a year has passed since the original submission, all diagnosis rates shift one year, i.e.

the estimates for year 2 become the estimates for year 1 etc.

On top of this, the estimate for age 1-17 in year 1 becomes *** instead of ***, based on

observations (BPABG survey). The estimate for adult patients is now set at *** rather than

**, to align with data from 4 expert centres.

MAA eligibility rates

For patients age 0-1 MAA eligibility rates are set to 100%. For age 1-17 years, estimates were

available from two sources, a UK source suggesting a ** rate and an US source suggesting a

36.3% rate. The Company has opted to use a *** rate, being more or less the average of the 2

found rates. With this percentage the model would estimate * eligible patients age 1-17,

which aligns with the number suggested by expert centres in England.

Treatment rates

For all age bands the treatment rate has now been set to 100%, assuming that all patients

fulfilling the MAA criteria will receive treatment.

Modified drug costs age 1-17

In the original budget impact analysis, the weight of patients between 1 and 17 years was

averaged to 19.3kg, and this formed the basis of the drug cost calculations. However, for the

analysis of costs when applying the yearly cap on drug costs, this approach gives incorrect

estimates of drug costs. Now instead, drug costs are estimated for each age separately, and

these costs are then averaged for the whole age band of 1 to 17 years.

Results

Based on the changes in diagnostic rates, MAA eligibility rates and treatment rates, the

Company estimates of the number of patients to be treated in the next 5 years are presented in

Table 5.

Table 5 Number of patients estimated to be treated over 5 years

Year 1 Year 2 Year 3 Year 4 Year 5

Original

estimates in

July 2015

submission

Age 0-1 * *** *** *** ***

Age 1-17 *** **** **** ** ****

Age 18+ *** *** *** *** ****

Total treated *** **** **** **** ****

Estimates

based on

MAA

Age 0-1 *** *** *** *** ***

Age 1-17 *** **** **** **** ****

Age 18+ *** *** *** *** ***

Total treated **** **** **** **** ****

Table 6 presents the net budget impact from the original company submission, whilst table 7

presents the results for the new base case, applying the values from Table 5. In the new base

case, values with and without market access for AA have increased, however, the net budget

impact decrease from £77.5M to £68.6M.

Table 6 Net budget impact original company submission

Total costs, AA with

market access scenario

Total costs, AA without

market access scenario

Net budget impact

Year 1 £2,093,817 £106,375 £1,987,442

Year 2 £7,958,743 £104,522 £7,854,222

Year 3 £14,811,644 £102,966 £14,708,678

Year 4 £20,317,543 £101,673 £20,215,870

Year 5 £32,790,493 £100,612 £32,689,881

Total £77,972,241 £516,148 £77,456,093

Table 7 New base-case net budget impact, without PAS/annual expenditure cap per patient

Total costs, AA with market

access scenario

Total costs, AA without

market access scenario

Net budget impact

Year 1 £9,504,214 £490,386 £9,013,828

Year 2 £12,316,684 £492,664 £11,824,020

Year 3 £14,348,988 £495,035 £13,853,952

Year 4 £16,409,490 £497,497 £15,911,994

Year 5 £18,500,182 £500,044 £18,000,138

TOTAL £71,079,558 £2,475,626 £68,603,932

Applying the proposed annual expenditure cap of ******** per patient to the new base-case,

the net budget impact for the NHS over the five-year period falls from £68.6M to £36.2M

(Table 8).

Table 8 New base-case net budget impact, with PAS/annual expenditure cap per patient

Total costs, AA with

market access scenario

Total costs, AA without

market access scenario

Net budget impact

Year 1 £5,091,433 £490,386 £4,601,046

Year 2 £6,765,589 £492,664 £6,272,925

Year 3 £7,847,943 £495,035 £7,352,907

Year 4 £8,945,380 £497,497 £8,447,884

Year 5 £10,059,333 £500,044 £9,559,290

TOTAL £38,709,678 £2,475,626 £36,234,052

The results above are based on an adherence rate of 80%, as the Company believes that an

adherence rate of 100% is exceedingly high, and could not be achieved in long-term clinical

practice. Nonetheless, consistent with ECD section 5.11, results of a sensitivity analysis

assuming 100% adherence are presented below. Without the expenditure cap the net budget

impact would increase from £68.6M to £85.7M.

Table 9 Sensitivity analysis: 100% adherence, without PAS/annual expenditure cap per patient

Total costs, AA with

market access scenario Total costs, AA without

market access scenario

Net budget impact

Year 1 £11,794,923 £490,386 £11,304,536

Year 2 £15,287,048 £492,664 £14,794,384

Year 3 £17,809,723 £495,035 £17,314,687

Year 4 £20,367,400 £497,497 £19,869,904

Year 5 £22,962,554 £500,044 £22,462,510

TOTAL £88,221,648 £2,475,626 £85,746,022

Applying the expenditure cap of ******** per patient to the sensitivity analysis assuming

100% adherence, the net budget impact over the five-year period increases from £36.2M to

£38.9M for the NHS.

Table 10 Sensitivity analysis: 100% adherence, with PAS/annual expenditure cap per patient

Total costs, AA with

market access scenario

Total costs, AA without

market access scenario

Net budget impact

Year 1 £5,423,367 £490,386 £4,932,981

Year 2 £7,239,292 £492,664 £6,746,629

Year 3 £8,390,809 £495,035 £7,895,774

Year 4 £9,558,387 £497,497 £9,060,890

Year 5 £10,743,621 £500,044 £10,243,577

TOTAL £41,355,477 £2,475,626 £38,879,851

ERG comment:

In general the ERG considers the changes made by the Company reasonable, in light of the

revised MAA. Whilst the ERG was somewhat doubtful about the US source for the MAA

eligibility rate, the currently used rate has face validity, as the estimated number of eligible

patients age 1-17 aligns with the number suggested by expert centres in England.

In the original ERG report, the ERG suggested changing the analysis to account for the ERG

estimated mortality. This change proved to have only a small impact on the net budget impact

(decrease from £77.5M to £77.3M, 0.2%), and this impact is likely to be even smaller when

the expenditure cap is applied. Thus the ERG has opted not to rerun this alternative budget-

impact analysis.

in collaboration with:

Asfotase alfa for paediatric-onset hypophosphatasia

ERRATUM to the

addendum

with an ERG critique of cost-effectiveness model submitted 23th

May 2016

This document contains errata for the ERG addendum containing a critique of the cost-

consequence model submitted by the Company on 23th May 2016.

The table below lists the page to be replaced in the original document and the nature of the

change:

Page nr: Change:

4 Text added: “In table 4 we present the ERG base case. Compared to the

Company model the ERG made the following changes: use of an

alternative probit model to derive transition probabilities, additional

survival analyses to predict HPP mortality and invasive ventilation

probability, discounting costs and health outcomes at 3.5% and no drop

in asfotase alfa price after 10 years due to loss of exclusivity. In the

original ERG report is was shown that the changes to the discount rate

and the exclusion of a price drop after 10 years had the largest impact on

the estimated incremental costs.

For the new, updated ERG base case we have changed the cost per

health state according to table 1. By comparing the original ERG base

case with the new ERG base case without expenditure cap, we see that

the increase in health state costs has indeed a very small impact on the

incremental costs.”

4 Table 4: Added extra row with results original ERG base case

Changed “3.5%” into “1.5%” (last rows)

8 Text added: “Some of the changes made by the ERG to the Company

model are not relevant in the context of the 5-year budget impact

analysis i.e. discounting costs and health outcomes and a drop in

asfotase alfa price after 10 years due to loss of exclusivity. Of the other

changes the ERG made to the cost-consequence model (use of an

alternative probit model to derive transition probabilities and additional

survival analyses to predict HPP mortality and invasive ventilation

probability), the most relevant in this context is the approach to

survival.”

Table added with original ERG budget impact results, reproduced from

ERG report.

4

Company scenario analysis results

In table 3 the results are presented of the scenario analysis the manufacturer performed to assess the impact

of using the higher discount rate per the ECD section 5.21; results are presented with and without the

inclusion of the annual drug cost cap per patient.

Table 1 Scenario on new Company base case using discount rate of 3.5%

Base case Perinatal/

infantile Age 0-4 Age 5-11 Age 12-17 Age 18+

Without annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs ********** ********** ********** ********** ********** **********

Incr. QALYs 14.25 18.21 16.66 14.22 13.10 3.72

With annual per patient expenditure cap (3.5% discount rate for costs and benefits)

Incr. costs ********** ********* ********* ********** ********** **********

Incr. QALYs 14.25 18.21 16.66 14.22 13.10 3.72

ERG base case

In table 4 we present the ERG base case. Compared to the Company model the ERG made the

following changes: use of an alternative probit model to derive transition probabilities, additional

survival analyses to predict HPP mortality and invasive ventilation probability, discounting costs

and health outcomes at 3.5% and no drop in asfotase alfa price after 10 years due to loss of

exclusivity. In the original ERG report is was shown that the changes to the discount rate and the

exclusion of a price drop after 10 years had the largest impact on the estimated incremental costs.

For the new, updated ERG base case we have changed the cost per health state according to table

1. By comparing the original ERG base case with the new ERG base case without expenditure

cap, we see that the increase in health state costs has indeed a very small impact on the

incremental costs.

Table 4 can be compared to table 2 for the results with 1.5% discounting and with table 3 for the

results with 3.5% discounting. From this, it is clear that the ERG approach leads to slightly higher

cost estimates and slightly lower QALY estimates than the Company approach.

4

Table 2 ERG base case results using the company’s model, with and without price cap (discount rate

3.5% and 1.5%)

Base case Perinatal/

infantile Age 0-4 Age 5-11 Age 12-17 Age 18+

Original ERG base case

Incr. costs ********** ********** ********** ********** ********** **********

Incr. QALYs 14.1 15.6 14.7 14.2 14.1 9.8

New ERG base case without annual per patient expenditure cap (3.5% discount rate for costs and

benefits)

Incr. costs ********** *********** *********** ********* ********* *********

Incr. QALYs 14.1 15.6 14.7 14.2 14.1 9.8

New ERG base case with annual per patient expenditure cap (3.5% discount rate for costs and

benefits)

Incr. costs ********** ********* ********* ********** ********** *********

Incr. QALYs 14.1 15.6 14.7 14.2 14.1 9.8

New ERG scenario without annual per patient expenditure cap (1.5% discount rate for costs and

benefits)

Incr. costs ********** *********** *********** ********** ********** **********

Incr. QALYs 24.2 27.3 25.6 24.2 23.3 13.2

New ERG scenario with annual per patient expenditure cap (1.5% discount rate for costs and

benefits)

Incr. costs ********** ********** ********** ********** ********** **********

Incr. QALYs 24.2 27.3 25.6 24.2 23.3 13.2

8

eligibility rate, the currently used rate has face validity, as the estimated number of eligible

patients age 1-17 aligns with the number suggested by expert centres in England.

Some of the changes made by the ERG to the Company model are not relevant in the context

of the 5-year budget impact analysis i.e. discounting costs and health outcomes and a drop in

asfotase alfa price after 10 years due to loss of exclusivity. Of the other changes the ERG

made to the cost-consequence model (use of an alternative probit model to derive transition

probabilities and additional survival analyses to predict HPP mortality and invasive

ventilation probability), the most relevant in this context is the approach to survival. In the

original ERG report, the ERG suggested changing the analysis to account for the ERG

estimated mortality. This change proved to have only a small (0.2%) impact on the net budget

impact (decrease from £77.5M, table 6, to £77.3M, table 11,), and this impact is likely to be

even smaller when the expenditure cap is applied. Thus the ERG has opted not to rerun this

alternative budget-impact analysis.

Table 11: Net budget impact: HPP mortality predicted by ERG new exploratory model

Total costs, AA with

market access scenario

Total costs, AA

without market

access scenario Net budget impact

Year 1 £2,093,817 £106,375 £1,987,442

Year 2 £7,950,097 £105,554 £7,844,542

Year 3 £14,787,921 £104,882 £14,683,039

Year 4 £20,270,123 £104,344 £20,165,779

Year 5 £32,708,480 £103,927 £32,604,554

Total £77,810,438 £525,082 £77,285,357