Practical Evaluation of a Pharmacoeconomic Paper

Practical Evaluation of a Pharmacoeconomic Paper

Dr J Miot

Wits University

May 2011

What is “Health”?

World Health Organisation:Health is a “state of complete physical, mental and social well-being”

HEA PTP: M207 Health Economics

Everyone wants it!

Why do we need Health Economics?

“All effective health technologies should be free” Archie Cochrane

But The introduction of new effective technology is

faster than the increase in our ability to pay for them

Uncertainty about both effects and resource use for new technologies

Economic Drivers of Healthcare Costs

• Increasing population• Changing population• Increase in pace and price of new technology• Patient choice and expectation• Economies of scale (pvt vs public)• Tensions between different fund options• Lack of legislative bodies to control price and quality of

new health treatments • Role of country’s economic well being

Its all about choices

Resources are scarce

What we “want” is unlimited

Therefore involves “choice”

How do we choose?


Unrestricted Access Spending scarce healthcare resources on technologies that

provide little if any benefit or may even harm

Restricted Access Delaying benefits which could be accrued whilst generating

further evidence on effectiveness

Need to explore ways to take into account uncertainty while also offering chance for earlier/increased access to novel treatments

Trueman P. ISPOR SA 3rd Annual Conference 2010

Balancing Uncertainty and Access

Health Economics and Choices

“Assessment of the overall value of a healthcare intervention for the allocation of resources in a given environment”

•Maximise the benefits from available resources

•Provides tools to make consistent decisions

•Provides value for money based on cost-effectiveness and not on the basis of cost alone

Uses of Health Economics Studies

Submission for Re-imbursementSubmission for Regulatory approvalAcademic and EducationalPublication for informationNational GuidancePolicy DeterminationCost-Benefit Analysis

Lets start with an example....

This workshop is giving you a headache! You need treatment for immediate relief.

Your treatment options are:

Which is the most cost-effective option?

Treatment Dose

Paracetamol 1000mg

Ibuprofen 400mg

Tramadol 50mg

Lavender essence 1 drop

Which is the most cost-effective option?What do you look at first?

Clinical Evidence! • Which products have proven clinical benefits?• Are they all the same or are there differences in outcome?• Paracetamol = ibuprofen > tramadol• Now look at the costs• Which is the most cost-effective option?

Sachs C. Oral analgesics for acute non-specific pain. Am Fam Physician 2005;71:913-18.

What are the costs....

The costs for your treatment options are:

Which is the most cost-effective option?

Treatment Dose Cost/dose

Paracetamol 1000mg R 1 (Panado)

Ibuprofen 400mg R 2.54 (Nurofen)

Tramadol 50mg R4.11 (Tramal)

Lavender essence 1 drop R0.02

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The COMPARATIVE analysis of alternate treatments in terms of COSTS and CONSEQUENCES ( can be more than one alternative).

What are the components of Health Economics?

CHOICECHOICE

A

B

Costs A

Costs B

Drug

Comparator

Consequences A

Consequences B

Incremental benefits and costs

Generally going to spend more money so have to ask

“Is the increased benefit worth the increased cost?”

Incremental Cost Effectiveness Ratio = (Costs B – Costs A)

ICER (Effects B- Effects A)

The Cost-effectiveness PlaneMore Costly

Less Costly

More Benefit

Less Benefit

TX is less effective and more costly

TX is more effective and less costly

Upper T

hresh

old

Moderate

WeakModerate

Strong

Weak

StrongUpper

Thr

esho

ldLower Threshold

Lower Threshold

DOMINANT

DOMINANT

Part of a Decision-making Process

Clinical Evidence

Epidemiology

Health Economics

Financial Costs

Patient AccessBudget Impact

Communication and Implementation

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Type of HE Study Design:

• Similar to CUA but the output measure expressed in monetary units.

• Measured in terms of “Willingness to pay”• e.g. cost of diabetic counselling

• Multiple outcomes, different costs• ‘soft’ measures - pain, suffering and disability• ‘hard’ measures - years of reduced life,

restenosis• Combined into a single outcome measure:

Quality Adjusted Life Year (QALY)• e.g. biologics in Rheumatoid Arthritis

Cost Benefit Analysis (CBA)Cost Utility Analysis (CUA)

• Different outcome, different costs• Usually measured in events prevented, lives

saved• e.g. Open vs. laparoscopic surgery

• Same outcome, different costs• e.g. antibiotics, generics• “the cheapest option”

Cost Effectiveness Analysis (CEA)Cost Minimisation Analysis (CMA)

Cost Minimisation Analysis

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Bradley J et al. NEJM, 1991;325(2):87-91

Amoxicillin/Clavulanic acid

Levofloxacin

Acute Sinusitis 1000mg bd 500mg daily

Cure within 21 days 86% 86%

10 day course Augmentin BD Tavanic

Cost per pt

Cost per pt

• Meta-analysis flouroquinolones vs beta-lactam antibiotics in acute bacterial sinusitis. OR 1.09 (0.85-1.39)

• Canadian Medical Association Journal 2008;178(7):845-854

402.09255.62

268.56224.45

Forcid Tavaloxx 500

Cost-minimisation analysisRx 1 Cost Rx 2 Cost Rx 3 Cost

Nasonex 229.50 Beclate Aquanase

65.68 Salex 39.03

Myprodol 95.29 Mybulen 47.19 Betagesic 25.26

Tavanic 402.09 Tavaloxx 268.56 Forcid 224.45

Total

Now add:

GP consult R211.30 – R332.00

And maybe even;

CT Sinus R534 – R3044

MRI Sinus R4474 – R7171

726.88 381.43 288.54

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• Different outcome, different costs• Usually measured in events prevented, lives

saved• e.g. Open vs. laparoscopic surgery


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Cost-effectiveness Analysis

Intervention Outcomes/100pts Drug Costs/pt

No treatment 15 deaths -

Thrombase 10 deaths R 2000

Klotgon 7 deaths R10 000

What is the ICER? (C1-C2)/(E1-E2)

Cost/Lives saved = (10 000 – 2 000)/ (0.07 – 0.1)

= R266 666/additional deaths prevented

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• Multiple outcomes, different costs• ‘soft’ measures - pain, suffering and disability• ‘hard’ measures - years of reduced life,

restenosis• Combined into a single outcome measure:

Quality Adjusted Life Year (QALY)• e.g. biologics in Rheumatoid Arthritis



QALYs are generally considered the standard unit of comparison for measuring quality of life outcomes in health economic evaluations

QALYs = time (years) x quality (utilities)

e.g after amputation above the knee – LE is 40 years but utility is 0.875

40 x 0.875 = 35 QALYs

Quality Adjusted Life Years (QALYs)

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Years of Life at Full QualityU

tility

Years of Life

24

Loss of years and quality of lifeU

tilit

y Catastrophic illness starts

Years of Life

Reduced Quality of Life

Reduced Years of Life

25

Current Treatment A

*Quality Adjusted Life Year

Uti

lity

QALY’s* gained withtreatment A = 3.5

Cost: R200,000

No treatment

Years of Life

Improved Quality of Life

Improved Years

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 1 2 3 4 5 6 7 8 9


Improved Years of Life

26

New Treatment B


QALY’s* gained withtreatment B = 3.65

Cost: R290,000

No treatment



U

tilit

y

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Years of Life

0 1 2 3 4 5 6 7 8 9

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Choice of Treatment:

Treatment A = R200,000 per 3.5 QALY’s*

Treatment B = R290,000 per 3.65 QALY’s*

Incremental Cost/QALY* = R600,000/QALY*

Incremental Cost-Effectiveness Ratio

= (290,000-200,000)/(3.65-3.5)


QALY’s* gained withtreatment B = 3.65Cost: R290,000

No treatment

Uti

lity

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Years of Life

0 1 2 3 4 5 6 7 8 9

QALY’s* gained withtreatment B = 3.65Cost: R290,000

No treatment

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Years of Life

0 1 2 3 4 5 6 7 8 9

QALY’s* gained withtreatment A = 3.5Cost: R200,000

No treatment

Years of Life



0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 1 2 3 4 5 6 7 8 9

Uti

lity

QALY’s* gained withtreatment A = 3.5Cost: R200,000

No treatment

Years of Life



0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 1 2 3 4 5 6 7 8 9

Is it a health economics study?

Are both costs and consequences examined?

No No Yes

Examines only consequences

Examines only costs

PARTIAL EVALUATION PARTIAL EVALUATION

Outcome description

Cost description

Cost-outcome description

Yes PARTIAL EVALUATION FULL ECONOMIC EVALUATION

Efficacy or effectiveness evaluation

Cost analysis

Cost -minimisation

Cost-effectiveness

Cost-utility

Cost-benefitCo

mp

ari

so

n o

f tw

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r m

ore

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M. Drummond et al, Methods for Economic Evaluation of Health Care Programmes. 2nd Ed. 1997

Steps to Evaluating Health Economics

1. What is the question being answered?

Was a well-defined question posed in answerable formLook in the introduction and methodology for this info

Drummond et al, 1996. Methods for the Economic Evaluation of Health Care Programmes. Chap 3.

2. Are these results useful to me in my setting?

• Only if methodology is appropriate and results are valid

• Not every study will answer every question• Will reveal weaknesses and strengths of the

study

Study Perspective

Societal : all costs and outcomes

Third party payer : public or private

Health care provider : hospital

Benefits manager in private industry : direct medical costs to employees, productivity of employee

Patients : out of pocket expenses, travel and waiting time

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Time horizon

Depends on the intervention and the associated harm or benefit

Days

Weeks

Months

Years

Lifetime

3. What are the Clinical Comparators?

• Are they properly described?• Were any important alternatives omitted?• Was (should) a do-nothing alternative be

considered?• Was an appropriate alternative chosen?

4. Is there evidence of effectiveness?

• Is it from randomized clinical trials, meta-analysis or expert opinion?

• Is it effective in clinical practice?• Were observational data or assumptions used to

establish effectiveness? What about potential biases?• Is the appropriate patient population being evaluated?

If the treatment is not safe or effective – don’t go any further!

5. What are the Clinical Measures?

• Hard endpoints – survival, events, cures• Surrogate markers – BP, TC, Viral load etc

• Are they relevant and appropriate?• How are they presented? OR, RRR, AR etc

6. What costs were measured?

• Depends on Perspective

• Direct medical costs: drug acquisition costs, pharmacy dispensing costs, lab costs, physician visits for monitoring, treatment of side-effects etc

• Indirect cost: decreased productivity, absenteeism, income lost, forgone leisure time, time spent by pt seeking medical services, time spent by family and friends attending the pt

• Intangible cost: psychosocial costs, apprehension, anxiety, grief, loss of well-being, social isolation, family conflict, pain, changes in social functioning and activities of daily living

What costs were measured?

Cost = price x utilisation

• Were the costs measured correctly in appropriate physical units

• What measures were used? Were they appropriate? • What was omitted from measurement – why?• Any special circumstances that make measurement

difficult?

Were the costs and consequences adjusted for differential timing

• Were costs and outcomes occurring in the future “discounted” to present value

• Was there any justification of discount rate used?• Were all cost brought to a fixed time period?

7. What are the Health Economic Measures?

Was an incremental analysis performed?

Incremental Cost/Life year gained (LYG)Incremental Cost/QALYIncremental Cost/event preventedIncremental Cost/procedure

8. How confident are you that this is a valid outcome?

• Was a sensitivity analysis performed?• Was justification provided for the range of values?• Which parameters were sensitive to change and reasons

given for why?• Has a statistical analysis been done?

9. Presentation and Discussion

• Did the presentation and discussion of study results include all issues of concern to users?

• Interpreted intelligently or mechanistically?

• Results compared with other similar studies? What were differences/similarities

• Discussion on generalisability of results to other settings or pt groups?

• Account for other important factors?

• Discuss impact and feasibility of implementation?

• Conflict of Interests?

Pessimist: bottle ½ empty

Optimist: bottle ½ full

Economist: bottle ½ wasted

inefficient!


What is your perspective?

Lack of direct comparisons to relevant alternative Head-to-head trials often not available Comparator in trials may not be relevant in our setting

Measuring relevant costs and benefits Vary from country to country ( transferability) Value of surrogate endpoints

Lack of long-term follow-up – extrapolation beyond clinical trials Especially important in chronic disease Some modelling is required Decision needed now - can’t wait until long-term data is available

Relevance to local settings – adapting from other settings Local costs and resource utilisation

Reducing uncertainty to improve confidence in outcome Sensitivity analysis Cost-effectiveness acceptability curves plotted from probabilistic models

Challenges in HE Analysis

•Using EBM and Health Economics leads to;

•Better clinical outcomes

•More efficient use of resources

•Reduce over-utilisation

•Reduce perverse incentives

•Improved re-imbursement structures

•Improved training and skills

Challenges are Opportunities

What Levels of Training are needed?

Level of Competency Level of Training

CPD Certificate Fellowship Formal Degree

Awareness;• Industrial field force• Healthcare practitioners• Healthcare administrators•Clinical & marketing industry team•Patient groups•Benefits managers

√√√√√√

Application;• Decision-makers for populations• Applied researchers

√√

√√ √

Conceptualise;• Academic/faculty•Senior industry scientists•Senior research consultants

√√√

√√√

Education and Skills needed to conduct, interpret and use economic evaluations in healthcare. ISPOR Panel 4. Value in Health, 1999. 2 (2):88-91

Websites and other useful info

ISPOR www.ispor.orgNICE www.nice.org.ukCochrane Databasehttp://www.healtheconomics.com/

Guidelines for authors and peer reviewers of economic submissions to the BMJ. Drummond M and Jefferson TO. BMJ, 1996:313:275-283 - Notes in file

Challenges in systematic reviews of economic analyses. Pignone et al. Ann Intern Med, 2005:142:1073-1079

Methods for Economic Evaluation of Health Care Programmes. Second Edition. Drummond et al. Oxford Medical Publications

Questions?

Documents

Practical Evaluation of a Pharmacoeconomic Paper