Presenter: Chris Cameron CANNeCTIN November 8, 2013 A Primer on Health Economics & Integrating Findings from Clinical Trials into Health Technology Assessments and Decision Making
Acknowledgements Vanier Canada Graduate Scholarships (Vanier CGS) Canadian Institutes of Health Research (CIHR) CANNeCTIN University of Ottawa Dr. George Wells, Dr. Doug Coyle, and Dr. Tammy Clifford Drug Safety and Effectiveness Network (DSEN) University of Ottawa Heart Institute
Health Economics General Concepts Economics is the study of unlimited needs/wants constrained by a limited number of resources (scarcity) Choices need to be made For each choice that is made there is an opportunity cost associated with it
Opportunity Cost in Health Care Similar principles apply when considering health technologies Since we are not able to pay for all health technologies, we need to make choices In doing so, we need to know whether a health technology is worth the cost
Health Economic Evaluation Provide a measure of value for money Comprised of two concepts: 1. Cost 2. Clinical / health effects Systematic way to compare health technologies
Decrease in total costs(-) 0 Increase in total costs (+) Comparing Health Technologies Status quo better than Health Technology A? Consider cost effectiveness O? Consider cost effectiveness Health Technology A Better than status quo Reduced clinical benefit (-) 0 Improved clinical benefits (+) O =what health technology is compared to (e.g., status quo)
Health Economic Evaluations Typically reported as a ratio (cost effectiveness): Incremental Cost Effectiveness of Health Technology A versus Health Technology B = Total Cost A Total Cost B Effect A Effect B
Cost-Effectiveness Analysis Incremental Cost Effectiveness of Health Technology A versus Health Technology B = Total Cost A Total Cost B Effect A - Effect B -In terms of clinically meaningful outcomes e.g., survival, fracture, infection avoided.
Cost-Utility Analysis Incremental Cost Effectiveness of Drug A versus Drug B = Total Cost A Total Cost B QALY A - QALY B Drug impacts patients quality of life or meaningful outcomes that in turn affect quality of life
What is a Quality Adjusted Life Year (QALY)? Outcome measure that incorporates both quantity of life (mortality) and health-related quality of life (morbidity) Quantity how long person lives Quality factor that represents a preference for a health state one year of perfect health = one QALY one year less than perfect health < one QALY death = zero
Cost-Utility Analysis Incremental Cost Effectiveness of Drug A versus Drug B = $50,000 $37,500 0.9 QALYs-0.8 QALYs = $125,000 per QALY gained
What Constitutes Good Value for Money? Cost-effectiveness threshold: maximum that a decision maker is willing to pay for one qualityadjusted life Cost-effectiveness threshold is not empirically estimated in Canada range of $20,000-$100,000 per QALY (Canada) range of 20,000 to 30,000 per QALY (United Kingdom) Not a cost-effectiveness threshold per se but rather a range of threshold values that may be considered acceptable depending on the context
Value for Money? Incremental Cost $12,500 ICUR= $125,000 per QALY Cost-effectiveness threshold of $50,000 per QALY gained $5,000 ICUR= $25,000 per QALY $2,500 0.05 0.1 0.25 QALYs gained Net Health Benefit 0.05 QALYs Net Health Benefit -0.15 QALYs
Other Issues to Consider when interpreting Cost per QALY Disease severity (e.g., terminally ill) Benefits in compliance with treatment (difficult to capture) Unmet need Treatment for which limited options are currently available Benefits beyond those to the health care payer (lost productivity, caregiver time) A QALY Is a QALY Is a QALY Or is it?
Health Technology Assessment Technology assessment in health care is a multidisciplinary field of policy analysis. It studies the medical, social, ethical, and economic implications of development, diffusion, and use of health technology (International Network of Agencies for Health Technology Assessment)
Terminology - HTA, EBM, & CER
HTA Products in Canada Single HTA Multi-HTA Time & Effort
Health Economic Components Review of Published Economic Studies Critical Appraisal of Manufacturer s Pharmacoeconomic Submission Primary Health Economic Evaluation Budget Impact Analysis
Review of Published Economic Studies
Review of Submitted Pharmacoeconomic Evaluation Model & Pharmacoeconomic Report
Decision Modeling & Primary Economic Evaluation
Introduction Self-monitoring of blood glucose (SMBG) has unclear benefits in patients with type 2 diabetes who do not use insulin Significant expenditure on blood glucose test strips Blood glucose test strips are among the top five classes in terms of total expenditure, with costs exceeding those for all oral antidiabetes drugs combined Over 50% is expended on patients who are not using insulin Decisions regarding the prescribing and reimbursement of blood glucose test strips require consideration of both clinical and cost-effectiveness information
Methods Incremental cost-utility analysis using United Kingdom Prospective Diabetes Study (UKPDS) Outcome Model Clinical inputs were obtained from a systematic review and meta-analysis of RCTs comparing SMBG with no self-monitoring Costs and utilities were obtained from published sources The perspective of this analysis was that of a Canadian publicly-funded Ministry of Health. Sensitivity analyses were performed to examine robustness of cost-effectiveness results.
Clinical Trial Data
Clinical Trial Data
Base Case Results Cumulative incidence(%) in no selfmonitoring of blood glucose arm Cumulative incidence(%) in self-monitoring of blood glucose arm ARR (%) NNT Myocardial infarction 36.58% 36.21% 0.38% 266 Ischemic heart disease 13.12% 13.04% 0.09% 1,136 Heart Failure 17.64% 17.20% 0.44% 228 Stroke 16.34% 16.14% 0.20% 500 Amputation 3.55% 3.34% 0.21% 467 Blindness 8.69% 8.49% 0.19% 518 End-stage renal disease 2.29% 2.21% 0.08% 1,299
Base Case Results (continued) No SMBG SMBG Difference Between SMBG and No SMBG Quality-adjusted life-years gained* 7.298 7.322 0.02385 Total direct costs [C$]* $27,997 $30,708 $2,711 Incremental cost per QALY gained (ICUR)* $113,643 = difference; ICER = incremental cost-effectiveness ratio; ICUR = incremental cost-utility ratio; QALY = quality-adjusted life-year; SMBG = self-monitoring of blood glucose. *Discounted at 5% per year. Cost in $C per incremental life-year gained. Cost in $C per incremental quality-adjusted life-year gained.
Sensitivity Analysis Reference Case Lower limit of 95% CI for WMD in A1c from 7 RCTs ( A1c=-0.39%) Upper limit of 95% CI for WMD in A1c from 7 RCTs ( A1c=-0.15%) Price per test strip reduced by 25% (C$0.55/strip) Price per test strip reduced by 50% (C$0.36/strip) Price per test strip reduced by 75% (C$0.18/strip) History of diabetes-related complications reflective of patients in DICE study and Canadian diabetes atlases SMBG <1/day, ( A1C=-0.20%; frequency= 0.77 SMBG/day) SMBG 1-2/day, ( A1C=-0.26%; frequency= 1.46 SMBG/day) SMBG >2/day, ( A1C=-0.47%; frequency= 3.5 SMBG/day) Baseline A1c< 8.0% (WMD in A1C%=0.16%, Baseline A1C=7.5%) Baseline A1c, 8.0 to 10.5% (WMD in A1C%=0.30%, Baseline A1C=8.7%) Patients using OAD(s) Patients using diet only therapy ICUR (C$/QALY) $113,643/QALY $77,706/QALY $189,376/QALY $86,129/QALY $58,615/QALY $31,101/QALY $89,656/QALY $81,654/QALY $122,416/QALY $169,120/QALY $213,503/QALY $94,443/QALY $91,724/QALY $292,144/QALY
Primary Economic Evaluation Blood Glucose Test Strips Over $330 million expended annually 50% is for patients not using insulin Top five class in terms of total expenditure in drug plans ~ $1/day in patients not using insulin Modest clinical benefits in patients not using insulin in non-industry sponsored RCTs Frequent use (>1 per day) not cost-effective in patients not using insulin - incremental cost per QALY of $113,643 per QALY Reduced price of strips or frequency (e.g., 1 or 2 per week) would improve cost-effectiveness
Cost effectiveness vs Budget Impact Analysis Cost effectiveness helps us assess whether a health technology is worth the cost provides good value for money Cost effectiveness does not provide information on affordability, i.e., can we afford it A health technology might be cost effective but the financial impact to a drug plan may be such that it cannot list the health technology Affordability decisions are made by the participating decision makers based on their budgets and priorities
Cost effectiveness vs Budget Impact Analysis BIA CEA Question Is it affordable? Is it good value for money? Goal Plan financial impact Economic efficiency (cost containment) (max. health with resources) Unit Entire Population Individual Scope of Costs Narrow perspective (decision-maker costs) Usually broader (health system costs) Health Excluded Outcomes Included Measure Total expenditure ($) Incr. cost per unit of outcome Market dynamics Usually included Time Horizon Usually short (1 5 years) Usually not modeled Usually longer (lifetime?)
Budget Impact Analysis: Can we afford not to?
Rising Costs of Test Strips
Budget Impact of Test Strips
Could the money be better spent? 2,200 nurses OR The >$150 million spent annually on blood glucose test strips among patients with type 2 diabetes who are not using insulin could be used to pay for 2,800 dieticians/ nutritionists OR Universal coverage of insulin for all patients with type 1 diabetes in Canada.. and then some. OR All oral Diabetes medication
Primary Economic Evaluation & Budget Impact Example
Opportunities for enhancing the role of Health Economic Evaluation and HTA in Canada Proximity to Decision Application of payer-specific data Opportunity to integrate HTAs Larger role for sub-group analysis Measure impact of HTAs
Proximity to Decision Evidence Generation & Synthesis Decision Making globalize the evidence, localize the decision HTA Report & Decision HTA Report & Recommendation HTA Report
Payer-specific Data Payer specific prices Incorporate local clinical/epidemiological data into HTA More accurate estimates of budget impact Contextual issues
# of disease areas considered simultaneously Integrating Health Technology Assessment(s) vs. One-off HTA(s) # of health technologies considered simultaneously Assessment of one technology in one disease area Assessment of multiple technologies in one disease area Assessment of one technology in multiple disease areas Assessment of multiple technologies in multiple disease areas
More seamless integration of evidence along the continuum Seamless integration of network metaanalysis with economic analysis Value-based pricing Managed entry agreements Research Prioritization
Enhanced role of sub-group analysis Studies typically report mean or average effect estimates. However, there are individuals on both sides on the mean those who benefit more and those who benefit less (in some cases those who don t benefit at all).
Conveying Opportunity Costs of Decisions 2,200 nurses OR The >$150 million spent annually on blood glucose test strips among patients with type 2 diabetes who are not using insulin could be used to pay for 2,800 dieticians/ nutritionists OR Universal coverage of insulin for all patients with type 1 diabetes in Canada.. and then some. OR All oral Diabetes medication
Current Challenges with applying Health Economic Evaluation and HTA in Canada Health economics capacity in Canada Issues not captured in a QALY Prioritization of HTA Topics & Level of effort of Health Economic Evaluation Perspective of HTA Coordination of HTA & Health Economic Evaluations in Canada
Decision Modeling & Health Economics Capacity in Canada Expertise in Decision Modeling & Health economics limited in Canada Government & Quasi- Government Recruitment and retention is a challenge in Canada Capacity within HTA units often requires a blend of internal health economist(s) expertise and external contractors Universities Healthcare Consulting Pharmaceutical & Biotech Sector Insurance Industry
Time & Effort Prioritization of HTA s and level of effort devoted to Health Economic component Devices Drugs Big Ticket Health Technologies Primary Economic Evaluation & Budget Impact Analysis Procedures Prioritization Criteria Small Ticket Health Technologies Critical Appraisal of Pharmacoeconomic Submission (if applicable) Review of Published Economic Studies and/or rapid budget impact analysis
Incorporating items not captured in a QALY Disease severity (e.g., terminally ill) Benefits in compliance with treatment (difficult to capture) Unmet need Treatment for which limited options are currently available Benefits beyond those to the health care payer (lost productivity, caregiver time) A QALY Is a QALY Is a QALY Or is it?
Incorporating elements not captured in QALYs
Emerging Approaches for formally incorporating these elements
Breaking the silos- Enhanced Pan-Canadian Coordination - Budget impact/affordability - Price Negotiation - Managed Entry Agreements - Efficacy versus Tx - Cost-effectiveness versus Tx Other Health Technologies? - Efficacy versus placebo - Safety
Purchasing & Price Negotiation Power
Perspective of Evaluation Payer Considerations Health System or Societal Considerations - 2,000 new taxi cabs licences In New York City - Generate one time $ 1 Billion US - Catch taxi quicker but in taxi longer - $500 million a year in lost time
Summary & Conclusions Clinical trial and epidemiological data form the foundation for health economic evaluations Health economics is an essential component of HTA There are several health economic methodologies that are applicable for decision making There are opportunities for improving the application of health economic evaluation and HTA in Canada There are also challenges but these challenges are not insurmountable
Questions? cgcamero@gmail.com
What is a network meta-analysis?