Introduction to Economic evaluation & its application · Defining the scope of the study ......

HTA workshop:

Introduction to Economic evaluation &

its application

ดร.ภญ.ศิตาพร ยังคง คณะเภสัชศาสตร์ มหาวิทยาลัยมหิดล

3 พฤษภาคม 2560

Outline

What is economic evaluation?

Understanding economic evaluation studies and its

application

Faculty of Pharmacy Mahidol University

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3

A 2007 survey amongst decision makers on Issues to Consider for New Health Technology Adoption

Source: Chaikledkaew et al. Value Health 2009;12(Suppl 3):S31-S35.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Safety

Efficacy/Effectiveness

Quality of life

Cost-effectiveness

Disease severity

Equity/Equality

Public demand

Budget impact

Price

Other available choices

Political issue

Least important Slightly important ImportantVery important Most important


4

Application of PE/EE in Policy Decision Making in Thailand

Source: Chaikledkaew et al. Value Health 2009;12(Suppl 3):S31-S35.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

National drug formulary

Hospital drug formulary

Clinical practice guidelines

Comunication toprescribers

other resource allocation

Most useful Very useful Useful Slightly useful Least useful


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Value for money (efficiency)

“... the comparative analysis of alternative courses of action in terms of both their costs and consequences.”

Drummond, Stoddart & Torrance, 1987

New treatment

Current treatment

Costs value of extra

resources used (loss to other

patients)

Consequences


Economic evaluation

Outcome Analysis

Full Economic evaluation

Source: Drummond et al, 2005 6

Methods Cost Outcomes Results

Cost-minimization analysis (CMA)

-

(assume to be equal)

Cost per case

Cost-benefit analysis (CBA)

Net benefit

Benefit-to-cost ratio

Return on investment (ROI)

Cost-effectiveness analysis (CEA)

health outcome in natural unit

Life year gained

ICER (cost per LYG)

Cost-utility analysis (CUA)

Outcome in a common unit e.g. QALY

ICER (cost per QALY)


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Pharmacoeconomics methods


The components of economic evaluation

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1. Defining the scope of the study – perspective, target population

2. Selection of comparator(s)

3. Defining the type of economic evaluation

4. Measurement of costs

5. Measurement of outcomes: Effectiveness/Efficacy, Utility, Benefits

6. Modeling techniques

7. Handling time in the economic evaluation studies

8. Handling uncertainty and sensitivity analysis

9. Presentation of data and results

1. Defining the scope of the study


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o Background

o Perspective

o Target population

o The description of the intervention or program of interest

2. Selection of Comparator(s)


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o Should be clearly specified in the context of the analysis.

o If the aim of study is to replace the most commonly used intervention with the intervention of interest, the comparator should be the most widely used one.

o If the aim of study is to replace the standard therapy, the comparator should be the most effective alternative.

o In some circumstances where do-nothing is current practice or standard of care, no treatment can be a viable alternative.

3. Defining the type of economic evaluation


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o CMA and CBA are not recommended in the Thai guideline.

o CUA is recommended when data and resources are available or when possible since it provided more complete picture of the compared alternatives.

o However, CEA is more appropriate in case only intermediate outcomes of the compared alternatives are available.

4. Measurement of costs (1)


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o Economic or opportunity cost

o Cost components to be included are depended on study perspective

Patient Provider Purchaser or payer Employer or other sponsor Government Societal

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Cost Valuation by perspective Category Subcategory Patient Provider 3rd -party

payer Health system

Public/ government

Societal

Direct medical

Treatment/ health care: Study setting

charge cost Reimburse Copay premium

- cost cost

Other health facilities charge - -/+ reimburse

charge charge charge

Direct non medical

Personal facilities charge - - - - charge

Travel charge - - - - charge Food charge - - - - charge House charge - - - - charge Time loss income loss - - - - Productivity cost Informal care income loss - - - - Productivity cost Personal care charge - - - - charge Indirect Morbidity cost income loss - - - - Productivity cost

Mortality cost income loss - - - Productivity cost

Other sectors

Welfare travel/food/ fee/material

- -/+ reimburse - cost cost

Education travel/food/ fee/material

- -/+ reimburse - cost cost



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o The source of cost data used: Rank 1: Prospective data collection or analysis of reliable

administrative data for specific study Rank 2: Recently published results of prospective data collection or

recent analysis of reliable administrative data – same jurisdiction Rank 3: Unsourced data from previous economic evaluation – same

jurisdiction Rank 4: Recently published results of prospective data collection or

recent analysis of reliable administrative data – different jurisdiction Rank 5: Unsourced data from previous economic evaluation –

different jurisdiction Rank 6: Expert opinion



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o Estimating the value of resources Direct measurement

• Gross or top-down approach • Micro-costing or bottom-up approach

Valuing productivity costs • Human capital approach • Friction cost method • Non-market items • Willingness to pay (WTP)

5. Measurement of outcomes


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Outcomes: The outputs or any end results of a particular treatment and/or intervention

Clinical • blood pressure • HBA1c • Cure rate for infectious disease • Number of recurrence • Number of fracture • Mortality

Economic • Cost (baht)

Humanistic • Health Related Quality of Life • Patient Satisfaction

5. Measurement of outcomes Efficacy/Effectiveness (1)


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o Clinical efficacy VS Clinical effectiveness

o The use of surrogate indicators should be avoided

o The inclusion of the grey literature such as research reports, master dissertations or Ph.D. theses is also considered to be very important in the Thai context

5. Measurement of outcomes Efficacy/Effectiveness (2)


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1++ High-quality meta-analyses, systematic reviews of RCTs, or RCTs with a very low risk of bias.

1+ Well-conducted meta-analyses, systematic reviews of RCTs, or RCTs with a low risk of bias.

1- Meta-analyses, systematic reviews of RCTs, or RCTs with a high risk of bias.

2++ High-quality systematic reviews of case control or cohort studies. High-quality case control or cohort studies with a very low risk of confounding, bias, or chance and a high probability that the relationship is causal.

2+ Well-conducted case control or cohort studies with a low risk of confounding, bias, or chance and a moderate probability that the relationship is causal.

2- Case control or cohort studies with a high risk of confounding, bias, or chance and a significant risk that the relationship is not causal.

3 Non-analytic studies: for example, case reports, case series. 4 Expert opinion.

(Killoran A, Kelly MP. Evidence-based public health : effectiveness and efficiency. Oxford : Oxford University Press, 2010)

Levels of clinical evidence

5. Measurement of outcomes: Utility (1)


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Effects of intervention Quality • Pain reduction • Less side effect • Ability to perform self care • etc.

Quantity • Life years gained



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Quality-adjusted life years

Short life – Full health

Long life – Reduced health



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*Utility can be ranged from 0 (worst health state) to 1 (best health state/healthy)

Patient 1: • Utility = 0.9 • Number of years = 10 • QALYs = 0.9 x 10 = 9

Patient 2: • Utility = 0.5 • Number of years = 10 • QALYs = 0.5 x 10 = 5

QALYs = number of years lived x utility*

Quality weight that represents HRQOL



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Valuation techniques o Single (comprehensive) measurement

Visual Analogue Scale

Standard Gamble

Time Trade-Off

o Multi-attribute utility measurement

e.g. EuroQol(EQ-5D), Health Utility Index (HUI), Quality of Well-being (QWB), Short Form 6D (SF-6D)

Visual Analogue Scale (VAS)


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100

0

80

60

40

20

U = X / D = X/100

X D

Death

Perfect health

Standard Gamble


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Alternative b

Alternative a

Chronic health state A (t years)

Perfect health (t years)

Death

(p)

(1-p)

Utility (of chronic health state A) = p

Time Trade Off


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healthy

Dead

state i

Choice 2

Choice 1

x t TIME

uti

lity

Ui = x/t

EQ-5D-5L


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5. Measurement of outcomes: Benefits (1)


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Valuing the benefits

- Direct Benefits

The amount of saving ($) from “expenditures for prevention, detection, treatment, rehabilitation, training, drug, medical supplies, professional services”

Cost Savings - Benefits realized by eliminating a planned expenditure or expenses

Cost Avoidance - Benefits realized by avoiding a relatively certain future expenditure, although the projected expenditure has not been budgeted or obligated.



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Valuing the benefits (cont.)

- Indirect Benefits Potential increased earning or productivity gains ($) they would not have been possible without the particular healthcare program The human capital approach - Intangible Benefits Psychological benefits of health such as satisfaction with life or health ($)

The stated preferences of willingness to pay (or contingent valuation)



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The human capital approach Most frequently applied Quantification of lost earnings or output due to morbidity

or premature mortality - If the patients could avoid being admitted into hospitals after providing pharmacy intervention, they were able to work - It is assumed that they would have the same employment experience as the general population - 2 days X 500 baht = 1,000 baht



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Willingness To Pay (WTP) The amount measured in

monetary terms, that an individual would be willing to sacrifice to obtain the benefits from the program

Estimated directly via questionnaires asking individuals how much they are willing to pay to reduce their risk of death or illness

Ask how much they would pay to receive pharmacy intervention?

Example

6. Modeling techniques (1)


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o Why do the study need modeling??

Consideration of all relevant comparators

Appropriate time horizon

Handling uncertainty used in the evaluation

o Type of models commonly used in economic evaluation

1. Decision analysis -- decision trees

2. State-transitional models -- Markov models



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• Identify the available options when faced with a decision

• Predict the outcomes of each option

• Select the decision that will yield the best pay-off

Decision tree

Choice A Choice B

Decision Tree

Outcomes of

Choice A

Outcomes of

Choice B

Choice nodes

Terminal nodes

Example of decision tree


33 Source: Spiegel et al, 2003.



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Markov model

Source: Inadomi JM. Eur J Gastroenterol Hepatol. 2004, 16:535–542

Absorbing state

Transient state

Temporary state

Example

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All DM patients will enter Markov models

7. Handling Time in the EE studies


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o Time horizon should be long enough to capture the full costs and effects of the intervention.

o If a time horizon > 1 year, the opportunity costs of investments and their health consequences should be taken into account through discounting.

PV = FVn / (1+r)n

PV = present value FV = future value r = discount rate n = year from start of program

8. Handling Uncertainty & Sensitivity Analysis (1)


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o Methodological uncertainty - Methodological disagreement among analysts e.g. rate of discounting, method for costing

o Parameter uncertainty - The uncertainty in parameter inputs to a study that includes sampling variation

o Modeling uncertainty - The uncertainty due to the model ‘structure’ relating to the function form of the model

o Generalizability/Transferability - Using economic evaluation results conducted in one setting in other settings



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o A mathematical and analytical technique designed to improve the quality and usefulness of analyses. Because many of estimates used in economic evaluation are uncertain, we need to test the sensitivity of the results.

Deterministic sensitivity analysis

Probabilistic sensitivity analysis



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o A mathematical and analytical technique designed to improve the quality and usefulness of analyses. Because many of estimates used in economic evaluation are uncertain, we need to test the sensitivity of the results.

- Deterministic sensitivity analysis

Tornado diagram

Threshold sensitivity analysis

- Probabilistic sensitivity analysis

Cost-Effectiveness Acceptability Curve

One-way sensitivity analysis: Tornado diagram

(Leerahavarong P, 2009) 40

One-way sensitivity analysis: Threshold SA

41 (Spiegel et al., 2003)


42 (Spiegel et al., 2003)

If a third party payer was willing to pay $50,000 per QALY gained for COX-2 therapy, only 0% of the patents in this simulation would fall within the budget.

Cost-effectiveness plane


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Cost-effectiveness acceptability curve Cost-effectiveness acceptability curve

-

0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

1.000

0 100,000 200,000 300,000 400,000 500,000 600,000

Value of ceiling ratio

Pro

babili

ty t

hat

LC

is b

ein

g c

ost-

eff

ective

(Teerawattananon Y., 2005)

9. Presentation of Data and Results (1)


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Clearly state all key elements Parameter and model assumptions Transitional probabilistic used in the model Source of costs and outcomes data Breakdown of costs and effects Base-cases estimates and probabilistic distribution ICER and Cost-effectiveness acceptability curve Discussion

• Limitations of the study • Comparing results to relevant results from other studies • Potential impact on healthcare expenditure • Equity alongside policy recommendations

9. Presentation of Data and Results (2)


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Incremental cost-effectiveness ratio (ICER) Compares a specific (new) intervention to a stated alternative (std) intervention

Costnew – Costold / Benefitnew - Benefitold

Incremental resources required by the

intervention

Incremental health effects gained by using

the intervention

Cost-effectiveness threshold


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UK: Less than £30,000 per QALY gained

USA: Less than $50,000 per QALY gained

Countries in the World: Less than 3 x GDP per capita per DALY averted

Thailand ICER < 160,000 THB per QALY gained (about 1.2 GNI per

capita in 2013)

Source: (1) Devlin, N. and Parkin, D. Health Economics, 2004; 13: 437-452; (2) Towse, A., Devlin, N., Pritchard, C (eds) (2002) Cost effectiveness thresholds: economic and ethical issues. London: Office for Health Economics/King's Fund; (3) National List of Essential Medicines. Appropriate Threshold in Thailand. Meeting of National List of Essential Medicines 9/2007, December 20, 2007; Chaiyanardnarentorn meeting room. Thai Food and Drug Administration; (4) Thavorncharoensap et al, 2013.

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9. Presentation of Data and Results: Example

(Leelahavarong P et al., 2010)

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HTA workshop:

Application of HTA or EE results

Application of HTA results in Thailand


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UHC health benefit package

Drug reimbursement list

Drug price negotiation

The Thai UC benefit package development


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Health interventions

Universal Coverage Benefit package

National List of Essential Medicines (NLEM) Development Process

The Thai UC health

benefit package

development

Secretariat (IHPP & HITAP)

Working group on health topic selection

Subcommittee on development of health

benefit package & services system of the

National Health Security Office (NHSO)

NHSO board

7 groups of stakeholders

Submitted topics

Preliminary assessment of each submitted topic

Prioritized topics

Recommendations

HTA researchers (IHPP & HITAP)

HTA results/ Preliminary recommendations

Topic nomination

Topic

prioritization

for assessment

Technology assessment

Appraisal

Decision making

• No. of people affected

• Disease/health problem

severity

• Effectiveness of

technologies

• Variation in practice

• Financial impact to the

households

• Equity/ethical

implications (affecting

the poor & rare diseases)

• Cost-effectiveness

• Budget impact

Subcommittee on health financing NHSO board 55

56 NLEM development process

Coverage decision platforms


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Non-pharmaceutical products Pharmaceutical products

Subcommittee on development of

health benefit package & services

system of NHSO

National Health Security Office (NHSO) board

Working group on health topic selection

Working group on health topic nomination

Recommendations

HTA results

Submitted topics

National List of Essential Medicines (NLEM) Committee

NLEM Sub-committee

Recommendations

Working group on price negotiation

Working group on economic evaluation

21 working groups based on specialty

EE results

Submitted medicines

Medicines Indications Baht/QALY Decision Year

Peg-interferon alpha 2b chronic hepatitis C subtype 2, 3 cost-saving Yes 2011

Peg-interferon alpha 2a chronic hepatitis C subtype 2, 3 cost-saving Yes 2011

lamivudine or tenofovir chronic hepatitis B cost-saving Yes 2011

bevacizumab Age-related macular degeneration, diabetic macular edema

cost-saving Yes 2012

intravenous immunoglobulin Dermatomyositis cost-saving Yes 2013

intravenous immunoglobulin chronic inflammatory demyelinating polyneuropathy (CIDP)

57,000 Yes 2013

intravenous immunoglobulin idiopathic thrombocytopenic purpura (ITP) 87,000 Yes 2013

oxaliplatin (FOLFOX) advance colorectal cancer 126,000 Yes* 2012

sidenafil pulmonary arterial hypertension 168,000 Yes 2013

Galantamine, donepezil or rivastigmine

mild-to-moderate Alzheimer's disease 157,000-240,000 No 2010

alendronate, risedronate, raloxifene

osteoporosis 300,000-800,000 No 2008

rituximab + CHOP regimen diffused large B-cell lymphoma 600,000 No 2013

bosentan or iloprost pulmonary arterial hypertension after failing sidenafil 1,023,000-4,462,000

No 2013

sunitinib metastasis renal cell carcinoma 2,400,000 No 2013

rituximab rheumatoid arthritis 1,100,000 No 2013

gefitinib or erlotinib Second-line treatment for non-small cell lung cancer 1,500,000-2,000,000

No 2013

ustekinumab chronic plaque psoriasis 3,500,000 No 2013

imiglucerase Gaucher disease type 1 6,300,000 Yes* 2012 58

Example: Cost-effectiveness on the national drug reimbursement list development Thailand: ICER threshold around 160,000 THB per QALY gained (1.2 GNI per capita) (2013)

Appraisal results and decision making


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Imiglucerase for Gaucher Type I

PD-first policy for ESRD

Sourch: Youngkong S et al. Multi-criteria decision analysis for including health interventions in the universal health coverage benefit package in Thailand. Value in Health 2012; 15(6): 961-970.


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Examples of using economic evaluation info. in coverage decision

0

3 , 0 0 0

6 , 0 0 0

9 , 0 0 0

1 2 , 0 0 0

1 5 , 0 0 0

1 8 , 0 0 0

Vaccination at the

age of 15 years

Vaccination at the

age of 20 years

Vaccination at the

age of 25 years

Vaccination at the

age of 30 years

HPV price threshold at 1X GDPHPV price threshold at 3X GDP

48%

55%61%

26%

86%

74%

37%

97%

The analysis of pricing threshold of the HPV vaccine against the WTP threshold

0

2,000

4,000

6,000

8,000

10,000

original price negotiated price

Threshold analysis for price of oxaliplatin


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Examples of using economic evaluation info. in price negotiations

Medicine Original price

(THB) Reduced price

(THB) Potential saving (THB per year)

Tenofovir 43 12 375 million

Pegylate interferon alpha-2a (180 mcg) 9,241 3,150 600 million

Oxaliplatin (injection 50 mg/25 ml) 8,000 2,500 152 million

Threshold price that makes oxaliplatin cost-effective in the Thai health care setting

Source: Teerawattananon et al, Z. Evid. Fortbild. Qual. Gesundh. wesen (ZEFQ) (2014) 108, 397—404

Universal Health Coverage Benefit package development

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Challenges


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Excessive demand for EE with limited supply

Inadequate infrastructures e.g. lack of local data related

to technology used especially clinical data

Lack of knowledge and understanding related to EE

amongst decision makers

[email protected]

Introduction to Economic evaluation & its application · Defining the scope of the study ......

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