Transcript Part 3 - Guild of Healthcare Pharmacists

European countries with formal cost-effectiveness
approval
Adapted and modified from Zentner et al, 2005
European countries - with budget
impact or formal cost-effectiveness
approval
Adapted and modified from Zentner et al, 2005
European countries - with clinical
effectiveness approval
Adapted and modified from Zentner et al, 2005
Economic evaluation - methodology
• Simplistic model – apply cost
constraints on “expensive” drugs
• Fails because some treatments
that are initially expensive are
highly effective and save money
elsewhere in the health system
– e.g. by increasing cures
– or by saving money from other
healthcare budgets
• Fails because “cheap” high volume
drugs may be relatively ineffective
Economics for the uninitiated –
the key pints in 5 minutes!
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say “cheap”or “expensive” they say “cost-effective” or “not cost effective”
You know more economics than you think
You know more economics than you
think
Economics or Οἰκονομία – is a Greek word
Oikos = “the household”
+ Nomos = “wise rules”
Economics - “wise rules for managing the household”
“Health economics” =
Wise rules for managing the hospital
The 2 “E”s of pharmacology:
efficacy, effectiveness,
Can it work?
Does it work in reality?
Efficacy
Effectiveness
The 3 “E”s of pharmaco-economics:
efficacy, effectiveness, efficiency
Can it work?
Efficacy
Does it work in reality?
Effectiveness
Is it worth doing
compared to other
things we could do with
the same money?
Cost-effectiveness
= Efficiency
Is it worth doing compared to other
things we could do with the same
A Poundmoney?
can only be spent once
Once money has been spent on one thing – it is a lost “opportunity” to spend it on
something else
economists call this the “opportunity cost” of spending
The power of health economic
thinking
• Assuming we worry about costs, and that some public
funded health care is essential: could we perform better?
• 185 publicly-funded interventions in the United States cost
about $21.4 billion per year, for an estimated saving of 592
000 years of life (considering only premature deaths
prevented).
• Re-allocating those funds to the most cost-effective
interventions could save an additional 638 000 life years if
all potential beneficiaries were reached.
– Tengs TO. Dying too soon: how cost-effectiveness analysis can save lives.
Irvine, California, University of California, National Center for Policy Analysis,
1997 (Policy Report No. 204)
“Cheap” and “expensive” are not
terms used in economic
assessments
• Which is the most cost-effective option?
We make economic decisions all the time – but some are very well informed
– buying a car for example
“Cheap” and “expensive” are not
terms used in economic
assessments
• Which is the most cost-effective option?
The rise in cost/QALY studies over
time
We make economic decisions all the time –
in medicine the metric is the increasingly
popular cost-QALY study
‘Cost–effectiveness’

To understand ‘cost-effectiveness’, we need to know:
A single metric
of costs
QALY
€£$
Costs
– The costs of treating

– The costs of not treating
– The costs of alternate
treatments
A single metric
of
risks/benefits
to length and
Quality of life
Effect
– Benefits seen

• Magnitude of those benefits
• Duration of those benefits
– Side-effects seen
• Magnitude of those side-effects
• Duration of those side-effects
•
Economists use the cost-QALY
model to assess the benefits of
treatment
Quality of life and length of life is described by the Quality
Adjusted Life Year “QALY”
Time (in years) x % of full Quality of Life = QALY
• Quality Adjusted Life Year
– One year lived at full quality scores = 1x1 = 1 QALY
– Two years lived at 70% QOL scores = 2 x 0.7= 1.4
QALY
Question: 3 years at 50% of full QOL = ?
– Six months lived at 50% QOL scores =0.5 x 0.5 =
Answer:
3 x QALY
0.5 = 1.5 QALYs
0.25
•
Economists use the cost-QALY
model to assess the benefits of
treatment
Quality of life and length of life is described by the Quality
Adjusted Life Year “QALY”
Question 2: If this treatment
costs 15,000 Euros the
cost/QALY would be?
Question: 3 years at 50% of full QOL = ?
Answer: 3 x 0.5 = 1.5 QALYs
Answer: 1.5 QALYs/15,000 =
10,000 Euros/QALY
QALY = Quality Adjusted Life Years
Treatment A increases length and quality
of life over control
Quality
of Life
Scale
(0 – 1)
Intervention A
No Intervention
QALY
Time ( Years)
adapted from a diagram by Alastair Gray - Oxford Healtrh Economics Research Center
QALY = Quality Adjusted Life Years
Treatment A increases length and quality
of life over control
Treatment B increases only quality of life
over treatment A
Intervention B
Quality
of Life
Scale
(0 – 1)
QALY
No Intervention
Treatment B is better than
treatment A but is it a
cost-effective option?
QALY
Time ( Years)
adapted from a diagram by Alastair Gray - Oxford Healtrh Economics Research Center
“Expensive” drugs can be costeffective
• Trastuzumab (a monoclonal antibody) costs
about US$70,000 for a full course of
treatment
– Fleck L (2006). "The costs of caring: Who pays? Who profits?
Who panders?". Hastings Cent Rep 36 (3): 13–7.
• Is associated with a 52% reduction in disease
recurrence and 33% reduction in death
• Romond EH, et al. NEJM. 2005;353:1673-1684
• Over a lifetime, cost per QALY is $27,800
(range $18-39,000)
• Garrison LP et al. J Clin Oncology. 2006;24(18S):6023
“Expensive” drugs can be costeffective
• Trastuzumab (a monoclonal antibody) costs
about US$70,000 for a full course of
treatment
– Fleck L (2006). "The costs of caring: Who pays? Who profits?
Who panders?". Hastings Cent Rep 36 (3): 13–7.
• Is associated with a 52% reduction in disease
“value
money”
is the new in
metric
recurrence
andfor33%
reduction
death
• Romond EH, et al. NEJM. 2005;353:1673-1684
High cost drugs may have significant health gains – and so give
excellent
money
• Over a lifetime,
costvalue
per for
QALY
is $27,800
(range
$18-39,000)
Only high value
drug makers are rewarded with guaranteed sales and
• Garrison LP et al.reimbursements
J Clin Oncology. 2006;24(18S):6023
Cost constraints in cancer
treatment:
What can nations do?
Countries can set costeffectiveness limits to
reimbursement for
new treatments
Lichtenberg FR. Despite steep costs, payments for new cancer drugs make economic sense. Nat Med. 2011 Mar;17(3):244.
Published reimbursement limits
• Aim is to reimburse in proportion to the
medical value of a treatment
– More effective treatments are considered more
valuable
– They gain a higher “QALY” score
Published reimbursement limits
• Aim is to reimburse in proportion to the
medical value of a treatment
– More effective treatments are considered more
valuable
– They gain a higher “QALY” score
• UK NICE
W.H.O. advises countries not to spend
more thanhealth
2-3 x per capita annual income
general
per QALY
– £30 000 / QALY
– £45 000 / QALY in terminal phase of illness
Cornes P. Cost-effectiveness of treating cancer anaemia in recombinant human erythropoietin (rhEPO) in Clinical Oncology –
Scientific and Clinical Aspects of Anemia in Cancer . 2nd Edition. Springer-Verlag, Wien, New York, Edited by M. R. Nowrousian, Essen, Germany
UK NICE: value of a treatment and
probability of approval for
reimbursement
Good value – costs less
than £30,000 to add
one extra year of good
quality of life – about
$50,000
Value –
measured as
the cost to
add one extra
year of good
quality of life
Probably
approve
Probably do not
approve
Close
scrutiny
Drug makers have to
demonstrate high value
to get reimbursed or
drop the price of
treatment
Drugs in the good value group
guarantee rapid market uptake to all
hospitals within 3 months
Presentation by Andrew Dillon, the head of the National Institute for Clinical Excellence (NICE), the UK’s technology assessment agency August 04, 2008
NICE probability of approval
Probably do not
approve
Close
scrutiny
Probably
approve
Imatinib
approved,
60K USD/QALY
Presentation by Andrew Dillon, the head of the National Institute for Clinical Excellence (NICE), the UK’s technology assessment agency August 04, 2008
NICE probability of approval
97% approved
25% approved
for some
indication
3% rejected
72% fully
approved
Presentation by Andrew Dillon, the head of the National Institute for Clinical Excellence (NICE), the UK’s technology assessment agency August 04, 2008
Reviewed: 11 NICE rejections of
cancer drugs at final appraisal
• 8 of 11 had no proven Overall Survival
benefit
– Cost/QALY; >30 to 171 thousand pounds/QALY
– (>45 to 257 k$/QALY)
• 3 of 11 have proven Overall Survival benefit
but do not cure:
– They extend life by only 2 to 5 months (1.8, 3.6,
4.7 months)
– and have a high Cost/QALY; 47 to 94 thousand
NICE and the challenge of cancer drugs. BMJ338 doi 10.1136/bmj.b67
Cost constraints in cancer
treatment:
What can we do as individuals?
1. Evidence based treatment
– Best clinical outcome
– Includes economic
evidence from costeffectiveness studies
Focus care to where it helps us live
longer and live better
“Estimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes.
They occur
because we pay for
more care rather
than better care”
•
Response to cost constraints in
cancer treatment: 1. Evidence
By focusingbased
on high treatment
cost interventions we may
divert resources from treatments with the
chance to relieve more symptoms or buy more
life
Using
the MASCC
score
directtotal
treatment
of febrileUS
neutropaenia:
can speed
• About
30%
oftothe
annual
expenditure
discharge, reduce drug and nursing costs
on health care is spent on ineffective or
Eachredundant
10% increase in care
Health Information technology to access Evidence Based
Medicine in a hospital saves 15% fewer deaths and 16% fewer complications
• US Senate Finance
Committee Roundtable Proceedings
per admission and cuts costs
on Healthcare Delivery System Reform, Allan Korn,
M.D., Senior Vice President and Chief Medical Officer
1. Oniline MASCC Febrile Neuropenia risk calculator - available at http://www.qxmd.com/calculate-online/hematology/febrile-neutropenia-mascc
2. How Providers Can Lower Costs and Improve Patient Care Using Evidence Based Medicine. An Oracle White Paper, July 2009. Available at http://www.oracle.com/us/industries/018896.pdf.
3. David W. Bates, MD, MSc, “The Effects of Health Information Technology on Inpatient Care,” Archives Internal Medicine 2009;169(2):105-107
Response to cost constraints in
cancer treatment: 1. Evidence
based treatment
Role of patient education
• 51% of women don’t
complete adjuvant
hormone therapy for
breast cancer
Non-compliance reduces survival by
9%
– Increased risk in younger
1.3 million women in the USA are
women
prescribed hormone therapy for
breast cancer
RFS Tamoxifen 5y vs control in women
<50y - EBCTG
1. Hershman DL. J Clin Oncol.. 2010; 28: 4120-4128. 2. http://onlinelibrary.wiley.com/doi/10.1002/cncr.25781/pdf 3. EBCTG
http://www.ctsu.ox.ac.uk/pressreleases/1998-05-16/fact-sheet 4. Ma AMT, American Journal of Surgery. 2008;196:500-504.
Response to cost constraints in
cancer treatment: 1. Evidence
based treatment
Role of patient education
• The use of oral cancer therapies to
manage disease is likely to increase
dramatically in the coming years
• Only 30% of oral cancer medications are
taken correctly
– right dose, at the right time, on the right day, in
the right way
$100 Billion a
year in USA
alone
• Five percent of all hospital visits are due
to drug non-compliance,
69 % of hospital visits for adverse drug reactions are caused by not taking
medication as prescribed
http://www.talkaboutrx.org/documents/HCP_Fact_Sheet_Handout.pdf
Response to cost constraints in
cancer treatment: 1 - Clinical
guidelines save money
91% of guidelines
save money
Kosimbei et al. Health Research Policy and Systems 2011, 9:24 http://www.health-policy-systems.com/content/9/1/24
Response to cost constraints in
cancer treatment: 1 - Clinical
guidelines save money
• In a landmark study, eight practices in the US
Oncology network introduced a single
guideline for non-small cell lung cancer
treatment.
• Overall, outpatient costs were 35% lower for
patients on clinical pathways, with an average
12-month cost of $18,042 for pathway versus
$27,737 for individualised non-pathway
treatment.
Response to cost constraints in
cancer treatment: 1 - Dose banding
• Dose banding offers a further chance to
minimise drug waste, reduce pharmacist time
and maximise cost avoidance.
• In a 3-month study, one pharmacy
department processed 126 prescriptions for
biologic anticancer agents.
• Dose banding could reduce drug wastage for
42% of these orders.
Winger BJ, Cost savings from dose rounding of biologic anticancer agents in adults. Oncol Pharm Pract. 2011
Sep;17(3):246-51.
• Potential cost savings from dose banding in
Response to cost constraints in
cancer treatment: 1 - Test dosing
• Test dosing may save waste if reactions occur.
• Expensive biologic medications may have
significant reactions. After this, the unused
infusion is discarded.
• These tend to occur most frequently on the
earlier cycles of treatment.
• A study from Boston Medical Center, USA,
Melton C. Cost-Containment Strategies. The oncology pharmacist. http://www.theoncologypharmacist.com/article/costcontainment-strategies
Cost constraints in cancer
treatment:
What can we do 1.asEvidence
individuals?
based treatment
– Best clinical outcome
– Includes economic
evidence from costeffectiveness studies
2. Generic substitution
Response to cost constraints in
cancer treatment: 2. Generic
Substitution
• In the USA, each 1% increase in generic
prescribing reduces drug costs by $1.32 billion
annually
• UK, the average cost of a generic is a quarter
of the original brand
– £4.83 and £19.33 respectively
Privitera MD. Generic antiepileptic drugs: current controversies and future directions Epilepsy Curr 2008; 8: 113–7
www.britishgenerics. co.uk/marketkeyfacts.htm
USA – annual savings from generics
in Billions USD
Response to cost constraints in
cancer treatment: 2. Generic
Substitution
RFS Tamoxifen 5y vs control in women
<50y - EBCTG
1. . EBCTG http://www.ctsu.ox.ac.uk/pressreleases/1998-05-16/fact-sheet 2. http://breastcancer.about.com/od/whattoexpect/a/CompareCost-Of-Tamoxifen-And-Aromatase-Inhibitors.htm