Bonny Parkinson

Disinvestment and value-based purchasing strategies for pharmaceuticals : an international review

Pharmaceutical expenditure has increased rapidly across many Organisation for Economic Cooperation and Development (OECD) countries over the past three decades. This growth is an increasing concern for governments and other third-party payers seeking to provide equitable and comprehensive healthcare within sustainable budgets. In order to create headroom for increasing utilisation, and to fund new high-cost therapies, there is an active push to ‘disinvest’ from low-value drugs. The aim of this article is to review how reimbursement policy decision makers have sought to partially or completely disinvest from drugs in a range of OECD countries (UK, France, Canada, Australia and New Zealand) where they are publicly funded or subsidised. We employed a systematic literature search strategy and the incorporation of grey literature known to the authorship team. We canvass key policy instruments from each country to outline key approaches to the identification of candidate drugs for disinvestment assessment (passive approaches vs. more active approaches); methods of disinvestment and value-based purchasing (de-listing, restricting treatment, price or reimbursement rate reductions, encouraging generic prescribing); lessons learnt from the various approaches; the potential role of coverage with evidence development; and the need for careful stakeholder management. Dedicated sections are provided with detailed coverage of policy approaches (with drug examples) from each country. Historically, countries have relied on ‘passive disinvestment’; however, due to (1) the availability of new cost-effectiveness evidence, or (2) ‘leakage’ in drug utilisation, or (3) market failure in terms of price competition, there is an increasing focus towards ‘active disinvestment’. Isolating low-value drugs that would create headroom for innovative new products to enter the market is also motivating disinvestment efforts by multiple parties, including industry. Historically, disinvestment has mainly taken the form of price reductions, especially when market failures are perceived to exist, and restricting treatment to subpopulations, particularly when a drug is no longer considered value for money. There is considerable experimentation internationally in mechanisms for disinvestment and the opportunity for countries to learn from each other. Ongoing evaluation of disinvestment strategies is essential, and ought to be reported in the peer-reviewed literature.

Integrating Health Economics Into the Product Development Cycle A Case Study of Absorbable Pins for Treating Hallux Valgus

Background. The probability of reimbursement is a key factor in determining whether to proceed with or abandon a product during its development. The purpose of this article is to illustrate how the methods of iterative Bayesian economic evaluation proposed in the literature can be incorporated into the development process of new medical devices, adapting them to face the relative scarcity of data and time that characterizes the process. Methods. A 3-stage economic evaluation was applied: an early phase in which simple methods allow for a quick prioritization of competing products; a mid-stage in which developers synthesize the data into a decision model, identify the parameters for which more information is most valuable, and explore uncertainty; and a late stage, in which all relevant information is synthesized. A retrospective analysis was conducted of the case study of absorbable pins, compared with metallic fixation, in osteotomy to treat hallux valgus. Results. The results from the early analysis suggest absorbable pins to be cost-effective under the beliefs and assumptions applied. The outputs from the models at the mid-stage analyses show the device to be cost-effective with a high probability. Late-stage analysis synthesizes evidence from a randomized controlled trial and informative priors, which are based on previous evidence. It also suggests that absorbable pins are the most cost-effective strategy, although the uncertainty in the model output increased considerably. Conclusions. This example illustrates how the method proposed allows decisions in the product development cycle to be based on the best knowledge that is available at each stage.

Economic evaluations of trastuzumab in HER2-positive metastatic breast cancer: a systematic review and critique

BackgroundPublished economic evaluations of trastuzumab for the treatment of HER2-positive metastatic breast cancer have arrived at different conclusions regarding the cost-effectiveness of trastuzumab, despite comparative efficacy being demonstrated by a small set of randomised controlled trials (RCTs).ObjectivesThis article aims to provide insight into the quality of the evaluations and explore the possible drivers of the conflicting conclusions.MethodsA systematic literature review was conducted to identify all published economic evaluations that compared the incremental costs and outcomes of trastuzumab versus a comparator.ResultsFifteen economic evaluations were identified. In the evaluations that estimated efficacy using an RCT, the key drivers of the conclusions regarding cost-effectiveness were: the approach used to estimate overall survival in the control group given crossover to trastuzumab following progression in the trials; the inclusion of treatment beyond progression; inclusion of wastage due to unused vial portions, adverse events, and the cost of HER2 testing. Four evaluations used non-randomised approaches to estimate efficacy, thus introducing the potential for confounding. As a result these evaluations reported relatively optimistic estimates of comparative effectiveness. Finally the evaluations used different thresholds to determine whether treatment with trastuzumab was cost-effective.ConclusionThere were numerous drivers of the different conclusions regarding the cost-effectiveness of trastuzumab, many of which are due to judgements made by the authors when translating data from RCTs. Many of the potential drivers were not identified by the published systematic reviews of economic evaluations and perhaps more remain unidentified because of inconsistent and limited reporting.

The Cost-Effectiveness of Mandatory Folic Acid Fortification in Australia

The Australian government recently introduced mandatory folic acid fortification of bread to reduce the incidence of neural tube defects (NTDs). The economic evaluation of this policy contained a number of limitations. This study aimed to address the limitations and to reconsider the findings. Cost-effectiveness analysis was used to assess the cost and benefits of mandatory versus voluntary folic acid fortification. Outcomes measures were quality-adjusted life-years (QALYs), life-years gained (LYG), avoided NTD cases, and additional severe neuropathy cases. Costs considered included industry costs and regulatory costs to the government. It was estimated that mandatory fortification would prevent 31 NTDs, whereas an additional 14 cases of severe neuropathy would be incurred. Overall, 539 LYG and 503 QALYs would be gained per year of mandatory compared with voluntary fortification. Mandatory fortification was cost-effective at A

Cost‐effectiveness of lumbar artificial intervertebral disc replacement: driven by the choice of comparator

10,723 per LYG and at A

Financial cost of lymphedema borne by women with breast cancer

11,485 per QALY. Probabilistic sensitivity analysis showed that at A

Resource use, costs and quality of end-of-life care: observations in a cohort of elderly Australian cancer decedents

60,000 and A

Long-term health care costs for patients with prostate cancer: a population-wide longitudinal study in New South Wales, Australia

151,000 per QALY, the probability that mandatory fortification was the most cost-effective strategy was 79% and 85%, respectively. Threshold analysis of loss of consumer choice indicated that with a compensation value above A

Authors’ Reply to Palozzo and Messori: ‘‘Disinvestment and Value-Based Purchasing Strategies for Pharmaceuticals: An International Review’’

1.21 [assuming a willingness to pay (WTP) threshold of A

Cost Effectiveness of a Community-Delivered Consultation to Improve Infant Sleep Problems and Maternal Well-Being

60,000 per QALY] or A