Transcript Costs Outcomes

ACCES AU MEDICAMENT
EFFICIENCE ET
CRISE ECONOMIQUE
Marc Czarka, MD, FBCPM
Collaborateur Scientifique
Département d’économie de la Santé
ESP-ULB
AGENDA
1. INTRODUCTION
2. THE FOURTH HURDLE
3. EFFICIENCY AND PHARMACOECONOMICS
4. FINANCIAL CRISIS IMPACT ON
HEALTHCARE AND MEDICINES
5. CONCLUSION
CHANGING HEALTHCARE
ENVIRONMENT
+ Advances in technology
+ Political forces (growing public
expectations vs. budget control)
+ Economical forces (competition
through innovation)
+ Aging population
= Raising health care expenditures
THE FOURTH HURDLE
• To get a marketing authorization, a
drug has to show:
– Quality
– Safety
– Efficacy
– (Risk/benefit ratio)
THE FOURTH HURDLE
• Four widely accepted “global
principles” governing the
planning, funding and provision
of healthcare services:
–
–
–
–
fair access,
efficiency,
responsiveness to society and
innovation.
EFFICIENCY?
HEALTH ECONOMICS
• Health economics is applying economic
principles and economic theories to health
and health care
• Or, the comparative analysis of alternative
courses of action in terms of both costs and
outcomes
PHARMACO-ECONOMICS
• Pharmaco-economics
– Is health economics applied to drugs
– Viewed by pharma as the 4th hurdle to
get the product on the market
– Now requested by authorities all
around the world before granting
reimbursement
EFFICIENCY
• The different steps of evidence
– Can it work ? = Efficacy (“Efficacité”)
– Does it work in reality ? =
Effectiveness (“Effectivité”)
– Is it worth doing it, compared to other
things we could do with the same
money = Efficiency (“Efficience”)
EFFICIENCY
• Budgets are limited, needs are
unlimited
• Safety, efficacy and quality are not
enough anymore
• In a world with scare resources,
efficiency becomes important
EFFICIENCY
• So authorities
– request pharmaco-economic
evaluation to be added to
reimbursement file
– to allocate budgets to interventions
that offers most health gain per unit
of money
EFFICIENCY
“Give us more
The evidence dilemma…
evidence that your
drug is efficient
and leads to
savings in real life”
Allow us first to the
market (reimbursed) and
then we will be able to
show real life evidence
Adapted from Annemans L.
EFFICIENCY
Other dilemma’s
• “According to your study, you are
cost-effective. Now, lower your price
by 20%, and you will even be more
cost-effective”
• “You claim that you can save money
elsewhere (hospitals…). But a
hospital bed is filled anyway. So, you
don’t really save”
WHAT IS THE RELATIONSHIP BETWEEN
COSTS AND OUTCOMES?
Outcomes
Is it worth spending
that much money ???
?
Costs
ECONOMIC EVALUATION
Costs
Outcomes
ECONOMIC EVALUATION
Type of Costs :
• Direct medical costs
(hospital, drugs, labs,
doctors, …)
• Direct non medical
costs (transportation,
diet, …)
• Indirect costs
(premature death, time
lost from work)
• Intangible costs (pain,
suffering)
Costs
Outcomes
ECONOMIC EVALUATION
Type of outcomes:
• clinical parameters
(reduction in blood pressure,
normalization of cholesterol
level, …)
• morbidity / mortality
endpoints (events avoided,
survival)
• quality of life improvements
• patient satisfaction or
preferences
Costs
Outcomes
ECONOMIC EVALUATION
Outcome is
• Longer Life
Costs
• Better Life
Outcomes
WHICH YARDSTICK?
• Multiple yardsticks:
– Perinatal or neonatal mortality
– Life expectancy at birth, later
– Disease or handicap free years expectancy
– Do the best you can with a certain
percentage of GDP
– Contribution to GDP growth
• Alphabet soup of LYG, LOS, NNT, NNH,
DALY, QALY…
• Let’s use QALY as an example
QUANTITY AND QUALITY
OF LIFE AS OUTCOME
Basic idea underlying the QALY?
(Quality-Adjusted Life Years)
• Combination of quality of life and length
of life into one measure - a kind of index
• Facilitates comparisons between
different kind of treatments and
diagnoses
QUANTITY AND QUALITY
OF LIFE AS OUTCOME
The concept of the QALY
• If the health state “blind” gives a quality
weight of 0.4, then one year as blind gives
0.4 QALY
• …or 0.4 years in full health gives the same
number of QALYs (0.4) as 1 year as blind
Adapted from Jonsson B.
LET’S COMPARE
Utility (Weights)
New Medical Treatment
1
QALY gained,
adding life to years
0
Existing Medical Treatment
Quantity of Life (Years)
COMPARING COSTS
AND CONSEQUENCES
additional
costs
additional
effects
COMPARING COSTS
AND CONSEQUENCES
additional
costs
1%
Innovative products
most often cost
more and do more
95%
additional
effects
1%
3%
Innovative products
are rarely cost-saving
IS THIS DRUG
COST-EFFECTIVE ?
Unaffordable?
additional
costs
Bargain?
E
D
C
B
A
additional
effects
THRESHOLD
RECOMMENDATIONS
Country
Threshold/QALY
Reference
Australia
AUD 42-76,000
George et al
Canada
CAD 20-100,000
Laupacis
Netherlands
EUR 20,000
Rutten
New Zealand
NZD 20,000
Pritchard
UK
GBP 30,000
Nice
US
USD 50-100,000
Earle
Sweden
SEK 500,000
Johannesson
QALYs in Decision-Making:
Issues and Prospects
• The use of measures, such as the
QALY, relate to social decisions
• An improvement in health outcomes
might not be the only reason to use the
QALY
• Other reasons are
– overall improvement of societal welfare
– indicator of society’s care and
compassion.
Smith MD, Drummond M, Brixner D. Moving the QALY Forward: Rationale for Change. Value in Health, 2009; 12,S1-4
QALYs in Decision-Making:
Issues and Prospects
• In the conventional concept of QALYs,
a health state that is more desirable is
more valuable.
• Value is equated with preference or
desirability.
• A critical question is: desirable to
whom, self and/or community?
Weinstein MC, Torrance G, McGuire A. QALYs: The Basics. Value in Health, 2009; 12,S5-9
QALYs :
UNDERLYING ASSUMPTIONS
Weinstein MC, Torrance G, McGuire A. QALYs: The Basics. Value in Health, 2009; 12,S5-9
MERITS?
• There are merits in the use of the QALY within the
mainstream of decision-making concerned with
questions of resource allocation within patient
populations
Kind P et al. The Use of QALYs in Clinical and Patient Decision-Making: Issues and Prospects. Value in Health, 2009; 12,S27-30
• To conclude, it is important to recognize that, at either
pole, we have to make social decisions -implicit, if not
explicit- about resource allocation. In my view, the use of
cost-utility models that use the QALY can be a pragmatic
and necessary tool to improve these complex decisions
often made under conditions of considerable uncertainty
and bias.
Garrison LP Jr, Editorial: Using QALYs for Societal Resource Allocation. Value in Health, 2009; 12,S36-37
WELL KNOWN
MEDICAL THRESHOLDS
Reference
Intervention
€/LYG (1999)
Lombaert ,1997
Pneumococcal
vaccination 65+
Cost saving
Deltenre, 1997
H pylori eradication in
patients with GD ulcer
Cost saving
Beutels et al., 1996
Universal hepatitis B
vaccination
500 €/LYG
1,500 €/LYG
Lombaert ,1997
Influenza vaccination
65+
Muls et al., 1994
Secondary prevention
of CHD with statins vs.
no treatment
9,700-19,700 €/LYG
Annemans, 1998
Primary prevention of
CHD with statins vs.
no treatment (hi-risk
patients)
21,000-26,000 €/LYG
Van Doorslaer, 1994
Hepatitis A vaccination
of travelers
27,000 €/LYG
COST PER LYG WITH
VARIOUS INTERVENTIONS
Treatment
Cost per LYG (USD)
Smoking cessation physician counseling
1,300 – 3,900
B-blocker post-MI, high-risk
5,900
Statins (4S)
9,800
AIDS drug cocktails
15,000-20,000
B-blocker post-MI, low-risk
20,200
Driver’s-side air bag
27,000
Kidney dialysis
50,000
Source: J Probstfield, Am J Cardiol 2003: 91 (suppl): 22G – 27G Johannesson et al.
N Engl J Med 1997; 336: 332–336; T O Tengs, Risk Analysis 1995: 15, 3, 369-389;
COST PER LYG WITH
VARIOUS INTERVENTIONS
Treatment
Cost per LYG (USD)
Annual mammography
for women aged 55-64
110,000
Exercise ECG for
asymptomatic man
aged 40 years
124,000
Cox-2 inhibitors Celebrex or
Vioxx for arthritis patients at
average risk for ulcers
185,000
Annual helical CT scan of
former heavy smokers to
detect lung cancer
2,300,000
Source: J Probstfield, Am J Cardiol 2003: 91 (suppl): 22G – 27G Johannesson et al.
N Engl J Med 1997; 336: 332–336; T O Tengs, Risk Analysis 1995: 15, 3, 369-389;
SELECTED RISK REGULATIONS
AND THEIR COST PER LIFE SAVED
Regulation (year issued)
Cost per life saved (USD)
Child-proof lighters (1993)
100,000
Respiratory protection (1998)
100,000
Logging safety rules (1998)
100,000
Electrical safety rules (1990)
100,000
Steering-column standard (1967)
200,000
Hazardous-waste disposal (1998)
1,100,000,000
Hazardous-waste disposal (1994)
2,600,000,000
Drinking-water quality (1992)
19,000,000,000
Formaldehyde exposure (1987)
78,000,000,000
Landfill restrictions (1991)
100,000,000,000
The price of prudence, The Economist, January 22, 2004
VIAGRA CAN BE SHOWN TO
BE VERY COST-EFFECTIVE …
Incremental
Cost/QALY (GBP)
25,000
20,000
‘appropriate’ for NHS
funding < £25,000
15,000
10,000
5,000
£3,369
£3,017
£2,803
£2,695
£2,329
Year 1
Year 2
Year 3
Year 4
Year 5
0
Time Horizon
Source: Stolk et al, BMJ 2000:320
… BUT WHAT IS THE SOCIAL
AND THERAPEUTIC NEED?
Incremental
Cost/QALY (GBP)
25,000
20,000
15,000
‘appropriate’ for NHS
funding < £25,000
10,000
5,000
£3,369
£3,017
£2,803
£2,695
£2,329
Year 1
Year 2
Year 3
Year 4
Year 5
0
Time Horizon
Source: Stolk et al, BMJ 2000:320
EFFICIENCY
So, is it an efficient drug ?
• Not a Yes / No answer
• Depends on many factors :
– compared to what ?
– health care system
– cost structure
– population considered
EFFICIENCY
• Other factors are also important to
consider in resource allocation :
– are there alternatives ?
– budget impact ?
– affordability ?
PHARMACO-ECONOMIC
EVALUATION
• A tool for efficient resource allocation
– Value for money
• Does not replace decision making
• Other goals also important
CRISIS IMPACT ON
HEALTHCARE
• The drivers of the sector are relatively independent
of the wider economy :
– prevalence of the disease
– unmet medical needs
– population growth and aging population
• Demand
– continues to grow over time and
– is relatively inelastic compared to demand of other goods
like cars, holidays…
• However, tougher economic conditions will have an
impact on society’s ability and willingness to pay
• Hence, impact will be a collateral damage
The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008
PRESSURE FACTORS
• As GDP growth slows, consumer spending will fall
and unemployment will rise, leading to
– decrease in tax revenues
– increase in demand on social services budgets
– significant increase in pressure on public finance
• The cost of various government bailing out the
financial sector will
• exacerbate these pressures.
• As the gap between growth of health care
expenditures and growth of GDP widens, the specific
pressure for cut in health care spending will grow.
The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008
PRICE PRESSURE
• Increasing use of generic drugs
• Higher rebates in tender business
• The Oslo conference « Health in times of
global economic crisis: implications for the
WHO European Region (February 2009) »:
Get all stakeholders ready to rationalize and
do better with less money. More specifically,
explore options and implement measures to
reduce the cost of medicines and medical
devices.
The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008
INCREASING REQUIREMENT
FOR EVIDENCE
• Health Technology Assessment (HTA)
Bodies will assess more rigorously efficiency
which will likely lead to more restrictive
reimbursement
• Site of Care and Local Payers may require
more formal data (« mini HTA ») before paying
or covering for a new technology
Increasing Importance of
Non Clinicians Stakeholders
CONSUMERS’ BEHAVIOUR
• Consumers themselves may limit their
access to treatment
• Patients in the US start skipping doses,
cutting pills in half and falling to fill
prescription
• The effect are even more apparent where
spending is more discretionary in
cosmetic-related medicine and surgery for
instance.
The Boston Consulting Group : Implications of the Financial Crisis for the Bio-Pharmaceutical Sector. November 2008
IMPACT ON
HEALTH OUTCOMES?
• Impact on mortality
– Russian Federation in the early 1990s : major
increase in adult male mortality
– Thailand 1996-1999 : increase in adult mortality
• No Impact on mortality
– Data from the US and Europe show that recession
have been accompanied by falling mortality rate
• reduction of smoking
• Reduction in alcohol use
• more time available for child care
The Financial Crisis and Global Health WHO – 21 January 2009 Report of a high-level Consultation
CONCLUSION
• Substantial uncertainty still exist but some
fundamental drivers will remain :
– Industry’s innovative drive
– Demographic shock
– Downward pressure on prices and more
restrictive reimbursement decisions :
• Cost-containment measures
• Cost-utility evaluations