Economic evaluation of health programmes Department of Epidemiology, Biostatistics and Occupational Health Class no. 23: Nov 17, 2008

Plan of class  Difficulties with league tables and CE thresholds  Role of uncertainty  Transferability to other settings

Role of the comparator in league tables  A2 compared to nothing has ICER of $9,100/QALY;  Compared to A1 $5,000/QALY, but A1 compared to nothing $50,000/QALY  A1 is dominated through extended dominance and should never be considered – A2 compared to A1 is misleading Source: Drummond et al. 2005, p. 329

Some difficulties with a cost- effectiveness threshold  QALY may not capture all relevant benefits  Externalities, altruism  Transferability to different setting?  Size of program matters  Think in terms of opportunity cost

Role of size of program  New (hypothetical!) antidepressant costs $1,000 per year but has an ICER of only $10,000/QALY  If 600k Quebeckers take it and it costs $600 million, what is the opportunity cost of $600 million?  Is it necessarily optimal to fund this?

NICE 2 guidelines £20,000/QALY £30,000/QALY Adopt Don’t adopt May or may not adopt

Role of uncertainty (1)  Modern cost-effectiveness analyses pay more attention to uncertainty  CEACs, Probabilistic sensitivity analysis  Clinical decision-making: approve if new Tx more effective (p<0.05)  Arbitrary and can lead to excessively costly new interventions being approved (role of insurance)  Policy analysis: decision based on expected measure of value, such as ICER  Risk distributed on many people

Role of uncertainty (2)  CEACs represent move away from decision rule based on fixed error probabilities (such as 0.05 – which are also embedded in confidence intervals). Decision-maker can decide whether to base decision on expected value (here, £26,571 per QALY) or consider probability that ICER falls below threshold Source: Drummond et al. 2005, p. 266

Issue of transferability  Effectiveness of meds clearly transferable  Effectiveness of surgical interventions may not be  Differences in surgical skill?  Clinical endpoints related to service system (e.g., % unplanned surgical revascularization) may not transfer well e.g., U.S. to Canada  Economic data may not transfer well:  Different available treatments (choice of comparator)  Different practice patterns – may arise from differences in incentives  Different relative prices

Variability in cost-effectiveness across countries  Source: Barbieri, Drummond et al. 05, p. 15 In Table below we see that drugs tend to appear to tend to be less cost- effective in UK and Germany, than in France, Italy and Spain. But there are many exceptions and the authors conclude that CE is one country cannot be used to infer it in another

Other factors that can influence cost-effectiveness  Demography and epidemiology of disease  Ex: Prevention more cost-effective where incidence is higher  How complex intervention implemented  Idiosyncratic factors for certain interventions:  Local unemployment rate for supported employment

Adapting results from one setting to another: 3 situations 1.Only clinical data from other country available  Use modelling to combine data from various sources 2.Clinical data + resource use/economic data from other country available  Use modelling, may or may not use resource use data 3.Clinical data + economic data from several countries available – need results for each country: several options  May or may not pool clinical data – common to pool  May or may not pool resource use data, pricing separately by country in each case If no pooling, calculate separate ICER for each country

Example:Expected cost of 3 more months of misoprostol prophylaxis (Drummond et al. 92)  To prevent gastric ulcers in patients on NSAIDs with abdominal pain  US trial (Graham et al. 88): Patients with OA, 400 micrograms daily for 3 months: 5.6% endoscopically determined lesions vs 21.7% with placebo  800 micrograms: 1.7%  Fewer lesions: lower expected HC costs  Evaluate CE in US but also UK, France and Belgium

Decision tree assumptions  No misoprostol: ulcer rate as in placebo arm, less 40% to account for silent ulcers  Tx arm: non-compliers assigned trial placebo ulcer rate  Diagnostic workup and ambulatory care patterns in each country ascertained by local expert panels  Hospital admission rates from epidemiological surveys  Surgical rates and LOS from routine hospital statistics  Free-standing surveys of costs in some countries

Source: Drummond et al. 2005, p. 337

Results by country Misoprostol more expensive in US yet more cost- effective also: Why?