On the role of cost-effectiveness thresholds in healthcare priority setting

Population-health impact of new drugs recommended by the National Institute for Health and Care Excellence in England during 2000-20: a retrospective analysis

BACKGROUND

Health systems experience difficult trade-offs when paying for new drugs. In England, funding recommendations by the National Institute for Health and Care Excellence (NICE) for new drugs might generate health gains, but inevitably result in forgone health as the funds cannot be used for alternative treatments and services. We aimed to evaluate the population-health impact of NICE recommendations for new drugs during 2000-20.

METHODS

For this retrospective analysis, we identified technology appraisals for new drugs in England published in NICE's publicly available database of appraisals between 2000 and 2020. We excluded products with terminated appraisals, not recommended, or subsequently withdrawn from the market and excluded appraisals in programmes focusing on medical devices, diagnostics, or interventional procedures. We included drugs that underwent NICE appraisal within 5 years of initial regulatory approval. We collected data on drug name, appraised indication, and specific features of both the drug and its appraisal. We noted the value for money offered by new drugs, expressed as the incremental cost-effectiveness ratio (ICER), and data on health benefits, expressed as quality-adjusted life-years (QALYs). We estimated the number of patients receiving new drugs recommended by NICE using proprietary data on the total volumes of new drugs sold in England between Jan 1, 2000, and Dec 31, 2020. We calculated the net health effect of each appraisal using the difference between the incremental QALY gains from implementing the new drug within the National Health Service (NHS) and the estimated QALYs that could hypothetically be obtained by reallocating the same funds to other NHS services or treatments. We obtained forgone QALYs by dividing the incremental cost of the new drug by the health-opportunity cost of NHS expenditure.

FINDINGS

NICE appraised 332 unique pharmaceuticals between 2000 and 2020; 276 (83%) had positive recommendations. Of these 276, 207 (75%) had a NICE appraisal within 5 years of regulatory approval. We included 183 (88%) of 207 drugs in this analysis, after excluding drugs that did not meet eligibility criteria. The median QALY gain across all 339 appraisals was 0·49 (IQR 0·15-1·13), equivalent to an additional half a year in full health. Median ICER for recommending new drugs increased from £21 545 (IQR 14 175-26 173) per QALY gained for 14 appraisals published between 2000 and 2004 to £28 555 (19 556-33 712) for 165 appraisals published between 2015 and 2020 (p=0·014). Median ICER varied by therapeutic area, ranging from £6478 (3526-12 912) for 12 appraisals of anti-infective drugs to £30 000 (22 395-45 870) for 144 appraisals of oncology drugs (p<0·0001). New drugs generated an estimated 3·75 million additional QALYs across 19·82 million patients who received new drugs recommended by NICE. The use of new drugs resulted in an estimated additional cost to the NHS of £75·1 billion. If the resources allocated to new drugs had been spent on existing services in the NHS, an estimated 5·00 million additional QALYs could have been generated during 2000-20. Overall, the cumulative population-health impact of drugs recommended by NICE was negative, with a net loss of approximately 1·25 million QALYs.

INTERPRETATION

During 2000-20, NHS coverage of new drugs displaced more population health than it generated. Our results highlight the inherent trade-offs between individuals who directly benefit from new drugs and those who forgo health due to the reallocation of resources towards new drugs.

FUNDING

The Commonwealth Fund.

Is a larger patient benefit always better in healthcare priority setting?

When considering the introduction of a new intervention in a budget constrained healthcare system, priority setting based on fair principles is fundamental. In many jurisdictions, a multi-criteria approach with several different considerations is employed, including severity and cost-effectiveness. Such multi-criteria approaches raise questions about how to balance different considerations against each other, and how to understand the logical or normative relations between them. For example, some jurisdictions make explicit reference to a large patient benefit as such a consideration. However, since patient benefit is part of a cost-effectiveness assessment it is not clear how to balance considerations of greater patient benefit against considerations of severity and cost-effectiveness. The aim of this paper is to explore the role of a large patient benefit as an independent criterion for priority setting in a healthcare system also considering severity and cost-effectiveness. By taking the opportunity cost of new interventions (i.e., the health forgone in patients already receiving treatment) into account, we argue that patient benefit has a complex relationship to priority setting. More specifically, it cannot be reasonably concluded that large patient benefits should be given priority if severity, cost-effectiveness, and opportunity costs are held constant. Since we cannot find general support for taking patient benefit into account as an independent criterion from any of the most discussed theories about distributive justice: utilitarianism, prioritarianism, telic egalitarianism and sufficientarianism, it is reasonable to avoid doing so. Hence, given the complexity of the role of patient benefit, we conclude that in priority practice, a large patient benefit should not be considered as an independent criterion, on top of considerations of severity and cost-effectiveness.

Analyses of quality of life in cancer drug trials - a review of measurements and analytical choices in post-reimbursement studies

OBJECTIVES

For drugs reimbursed with limited evidence of patient benefits, confirmatory evidence of overall survival (OS) and quality of life (QoL) benefits is important. For QoL data to serve as valuable input to patients and decision-makers, it must be measured and analyzed using appropriate methods. We aimed to assess the measurement and analyses of post-reimbursement QoL data for cancer drugs introduced in Swedish healthcare with limited evidence at the time of reimbursement.

METHODS

We reviewed any published post-reimbursement trial data on QoL for cancer drugs reimbursed in Sweden between 2010 and 2020 with limited evidence of improvement in QoL and OS benefits at the time of reimbursement. We extracted information on the instruments used, frequency of measurement, extent of missing data, statistical approaches, and the use of pre-registration and study protocols.

RESULTS

Out of 22 drugs satisfying our inclusion criteria, we identified published QoL data for 12 drugs in 22 studies covering multiple cancer types. The most frequently used QoL instruments were EORTC QLQ-C30 and EQ-5D-3/5L. We identified three areas needing improvement in QoL measurement and analysis: (i) motivation for the frequency of measurements, (ii) handling of the substantial missing data problem, and (iii) inclusion and adherence to QoL analyses in clinical trial pre-registration and study protocols.

CONCLUSIONS

Our review shows that the measurements and analysis of QoL data in our sample of cancer trials covering drugs initially reimbursed without any confirmed QoL or OS evidence have significant room for improvement. The increasing use of QoL assessments must be accompanied by a stricter adherence to best-practice guidelines to provide valuable input to patients and decision-makers.

The value of a QALY towards the end of life and its determinants: Experimental evidence

OBJECTIVES

Individual and societal willingness to pay (WTP) for end-of-life medical interventions continue to be subject to considerable uncertainty. This study aims at deriving both types of WTP estimates for an extension of survival time and an improvement of quality of life amounting to a QALY.

METHODS

A discrete choice experiment (DCE) involving a hypothetical novel drug for the treatment of terminal cancer involving 1529 Swiss residents was performed in 2014. In its individual setting, respondents choose between the status quo and a hypothetical drug with varying characteristics and out-of-pocket payments, adopting the perspective of a terminal cancer patient. In the societal setting, participants are asked to choose between the status quo and a social health insurance contract with and without coverage of the novel drug and a varying insurance contribution.

RESULTS

In the individual setting, respondents put a higher value on their quality of life than on their survival time whereas in the societal setting, they put a higher value on extra survival time. The combination of the two extensions results in a mean individual WTP per QALY of CHF 96,150 (1 CHF = 1 USD as of 2014). Mean societal WTP for a QALY even amounts to CHF 213,500 in favor of an adult patient, CHF 255,600 for a child, and CHF 153,600 for a person aged over 70 years, respectively. While estimated societal values consistently exceed their individual counterparts, they vary considerably with respondents' socioeconomic characteristics in both settings.

CONCLUSIONS

This research finds that individual WTP for an extension of survival time to one year is dominated by WTP for health-related quality of life whereas for societal WTP, it is the other way round. Both individual and societal WTP values exhibit a great deal of heterogeneity, with the latter depending on the type of beneficiary.

The health cost of reducing hospital bed capacity

In the past two decades, most high-income countries have reduced their hospital bed capacity. This could be a sign of increased efficiency but could also reflect a degradation in quality of care. In this paper, we use repeated cross-sections on mortality and staffed hospital beds per capita in all 21 Swedish regions to estimate the potential death toll from reduced bed capacity. Between 2001 and 2019, mortality and beds decreased across all regions, but regions making smaller bed reductions experienced on average greater decreases in mortality, equivalent to one less death per three beds retained. This estimate is stable to a wide range of specifications and to adjustment for potential confounders, which supports a causal interpretation. Our results imply that by providing one more bed, Swedish health care could produce about three quality-adjusted life years (QALYs) at a cost of SEK 400,000 (∼US$40,000) per QALY. These findings could be informative about the marginal productivity of health care and support the credibility of empirical work attempting to estimate the opportunity cost of funding new healthcare interventions subject to a constrained budget.

Supply-Side Cost-Effectiveness Thresholds: Questions for Evidence-Based Policy

There is growing interest in cost-effectiveness thresholds as a tool to inform resource allocation decisions in health care. Studies from several countries have sought to estimate health system opportunity costs, which supply-side cost-effectiveness thresholds are intended to represent. In this paper, we consider the role of empirical estimates of supply-side thresholds in policy-making. Recent studies estimate the cost per unit of health based on average displacement or outcome elasticity. We distinguish the types of point estimates reported in empirical work, including marginal productivity, average displacement, and outcome elasticity. Using this classification, we summarise the limitations of current approaches to threshold estimation in terms of theory, methods, and data. We highlight the questions that arise from alternative interpretations of thresholds and provide recommendations to policymakers seeking to use a supply-side threshold where the evidence base is emerging or incomplete. We recommend that: (1) policymakers must clearly define the scope of the application of a threshold, and the theoretical basis for empirical estimates should be consistent with that scope; (2) a process for the assessment of new evidence and for determining changes in the threshold to be applied in policy-making should be created; (3) decision-making processes should retain flexibility in the application of a threshold; and (4) policymakers should provide support for decision-makers relating to the use of thresholds and the implementation of decisions stemming from their application.

Empirical Estimates of the Marginal Cost of Health Produced by a Healthcare System: Methodological Considerations from Country-Level Estimates

Many health technology assessment committees have an explicit or implicit reference value (often referred to as a 'threshold') below which new health technologies or interventions are considered value for money. The basis for these reference values is unclear but one argument is that it should be based on the health opportunity costs of funding decisions. Empirical estimates of the marginal cost per unit of health produced by a healthcare system have been proposed to capture the health opportunity costs of new funding decisions. Based on a systematic search, we identified eight studies that have sought to estimate a reference value through empirical estimation of the marginal cost per unit of health produced by a healthcare system for England, Spain, Australia, The Netherlands, Sweden, South Africa and China. We review these eight studies to provide an overview of the key methodological approaches taken to estimate the marginal cost per unit of health produced by the healthcare system with the aim to help inform future estimates for additional countries. The lead author for each of these papers was invited to contribute to the current paper to ensure all the key methodological issues encountered were appropriately captured. These included consideration of the key variables required and their measurement, accounting for endogeneity of spending to health outcomes, the inclusion of lagged spending, discounting and future costs, the use of analytical weights, level of disease aggregation, expected duration of health gains, and modelling approaches to estimating mortality and morbidity effects of health spending. Subsequent research estimates for additional countries should (1) carefully consider the specific context and data available, (2) clearly and transparently report the assumptions made and include stakeholder perspectives on their appropriateness and acceptability, and (3) assess the sensitivity of the preferred central estimate to these assumptions.

Avoiding Opportunity Cost Neglect in Cost-Effectiveness Analysis for Health Technology Assessment

Despite being a fundamental tenet of economic analysis there is a lack of clarity regarding the relevance of opportunity costs to cost-effectiveness analysis for health technology assessment. We argue that this is due, in part, to the importance of the decision context in understanding the nature of opportunity costs. Taking the example of the National Institute of Health and Care Excellence (NICE) on behalf of the National Health Service (NHS) in England and Wales, we explore the implications of existing discrepancies between policy thresholds and emerging empirical evidence of health opportunity costs. In particular, we consider analysts communicating the results of cost-effectiveness analysis, and recommend that analysts provide analysis according to both the policy threshold and the latest empirical evidence until the discrepancies are better understood or resolved. A number of conceptually related, but distinct, issues are discussed and clarified.