European experience in conducting pharmacoeconomic studies

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European experience in conducting
pharmacoeconomic studies

• Bengt Jönsson
• Stockholm School of Economics

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Some important concepts

• Evidenced Based Medicine
• Focus on what is best for the patient?
• Aimed to assist clinical decisions
• Health Technology Assessment (HTA)
• Medical, economic and social effects
• Aimed at assisting policy decisions
• Economic evaluation
• Cost-benefit and Cost-effectiveness
• Pharmacoeconomic studies

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HTA- Invented in the US

• Congressional Office of Technology Assessment
  1972-1995
• Between 1975 and 1980, an OTA group set the
  stage for today's booming industry in the
  technology assessment of health care by
  demonstrating the inadequacy of information on
  which decisions about technology were made
  laying out the strengths and weaknesses of
  methods to evaluate technology and crystallizing
  the process by which economic tradeoffs could be
  incorporated in decisions.

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The Development in Europe

• Establishment of HTA agencies in Europe
• SBU in Sweden 1987
• Nice in UK, 1999
• IQWiG, Germany, 2005
• Today about 40 HTA agencies in Europe
• Different types of agencies
• National agencies
• Reimbursement agencies for pharmaceuticals
• Other (regional, linked to universities)

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The Swedish Institutions

• Three independent government authorities
• SBU, the HTA agency
• LFN, reimbursement of drugs
• NBHW, national treatment guidelines
• Separated from Ministry of Health
• Not part of the regionalized health care system
• Financed and managed by 21 county councils

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HTA and 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

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Need for assessing cost-effectiveness as part of
the HTA

• Cost-effectiveness look at the balance between
  cost and effectiveness
• Aims at selecting cost-effective use of
  technologies
• Two decision criteria
• Maximize the health benefit from a given budget
• Define optimal spending from a given threshold
  value for cost-effectiveness

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Two major issues

• How define the budget?
• Payer perspective (which payer?)
• What about resource consequences that fall
  outside the payer? (included in the benefit
  measure?)
• How define the threshold value for cost per QALY
• Only relevant from a social perspective?
• How make the budget allocation

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and a dilemma

• The two approaches are not consistent if applied
  independently
• A possible solution
• threshold seeking
• But he definition of cost still determines where
  you end up
• A social perspective on cost is to be preferred

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Focus have shifted from other technologies to
drugs

• Drugs are the most important health technology
• Advances in cardiology and asthma
• Lately in MS and RA
• Cancer the field to come (40 evaluations by NICE)
• Increasing public finance of drugs
• Drugs were in the 1970s the only technology that
  was formally assessed
• Thus mainly excluded in the early development of
  HTA
• RCT in surgery and radiotherapy are now common
• NICE include an assessment of safety and efficacy
  of procedures
• NICE have made a shift to include public health
  measures in appraisals and guidance

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Role of cost-effectiveness

• Was minor and controversial at start
• Was given a boost by the establishment of NICE
• National Institute of Cost Effectiveness?
• Has gain further in importance by the link
  between HTA and reimbursement
• Establishment of LFN in Sweden 2002
• C/E is an explicit criteria for reimbursement

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Cost per QALY

• Use by SBU, LFN and SoS
• Cost defined from a social perspective in LFN
  guidelines
• Limited budget perspective by SBU and SoS
• No explicit threshold value, but the aim is to
  identify technologies/indications that gives good
  value for money

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LFN The Pharmaceutical Benefit Board

• Decision about reimbursement based on a defined
  price
• What is the value in relation to price?
• Product oriented system
• But restricted reimbursement to a defined
  indication can be used
• Compulsory for all new prescription drugs
• Retrospective review of classes of drugs

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LFN The first two years

• 45 granted reimbursement without restrictions
• 8 with restrictions
• 10 refused
• 2 under review

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LFN 2003-2005
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Results of the first review

• Imigran taken out of the reimbursement system due
  to higher price than competitors, without
  documented advantage
• Imigran Novo introduced by GSK at about half the
  price (similar to other products in the market).

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LFN second review of drug classesAnti-ulcer drugs

• Reimbursement for generic omeprazole
• Generic substitution at pharmacy
• Reimbursement for Nexium (patent)
• In erosive GERD
• For HP eradication
• No reimbursement for other products unless they
  reduce price to that of generic omeprazole

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Responses from the industry

• Acceptance after initial critique
• Acceptable guidelines for submissions but
  difficult to understand how they will be applied
• What is an acceptable cost per QALY?
• Takes time and resources to provide the data

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Impact on decision making

• European reviews conclude the economic evaluation
  has a small but growing impact on health care
  decision making
• Evidence that HTA studies have a limited impact
  on clinical decisions
• Seen as a problem by all HTA agencies
• An increasing amount of resources are spent on
  marketing the results
• The limited response from doctors have
  consequences
• Denial of reimbursement (Viagra)
• Generic substitution

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The problems are still there

• Continuous growth of health care expenditures and
  need for cost-containment policies
• Large variations in clinical practice both within
  and between countries
• Quality of care not up to expectations from
  patients and the general public
• Management of market access for innovations

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The Swedish experience?

• SBU is a very respected institution
• Cost-effectiveness important within HTA, but
  problem with relevant local data for such studies
• Assessment of impact a key factor for the future
• LFN has in a short time gained a strong influence
  in pharmaceutical policy
• Has today the most qualified staff for assessing
  cost-effectiveness
• Tensions between central and regional decision
  making
• NBHW National guidelines group
• Strong influence from health economics in
  development of guidelines
• Still limited experience with the impact of
  guidelines

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Where is Sweden moving?

• Need for a rationalization and more efficient use
  of resources for HTA and cost-effectiveness
  assessments at the national level
• Relations to the county councils
• Expected to be reduced to 6 regions in the near
  future
• Increased international co-operation and division
  of labor