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Introduction: Utility values offer a quantitative means to evaluate the impact of novel cancer treatments on patients' quality of life (QoL). However, the multiple methods available for valuing QoL present challenges in selecting the most appropriate method across different contexts. Areas covered: This review provides cancer clinicians and researchers with an overview of methods to value QoL for economic evaluations, including standalone and derived preference-based measures (PBMs) and direct preference elicitation methods. Recent developments are described, including the comparative performance of cancer-specific PBMs versus generic PBMs, measurement of outcomes beyond health-related QoL, and increased use of discrete choice experiments to elicit preferences. Recommendations and considerations are provided to guide the choice of method for cancer research. Expert opinion: We foresee continued adoption of the QLU-C10D and FACT-8D in cancer clinical trials given the extensive use of the EORTC QLQ-C30 and FACT-G in cancer research. While these cancer-specific PBMs offer the convenience of eliciting utility values without needing a standalone PBM, researchers should consider potential limitations if they intend to substitute them for generic PBMs. As the field advances, there is a greater need for consensus on the approach to selection and integration of various methods in cancer clinical trials. [ABSTRACT FROM AUTHOR]

ORIENT-16, a phase III clinical trial conducted at 62 hospitals in China, reported that add-on sintilimab (Sin) to chemotherapy (Chemo) had favorable efficacy (p < 0.05) for patients with advanced HER2-negative gastric or gastroesophageal junction cancer (GC/GEJC). This study aimed to evaluate the cost-utility of the Sin+Chemo based on results of ORIENT-16 from the perspective of Chinese healthcare payers. A three-state partitioned survival model was developed to simulate the 10-year life expectancy and total healthcare costs for patients with advanced HER2-negative GC/GEJC. Primary measure outcomes were: cost, quality-adjusted life-years (QALYs), and incremental cost-utility ratios (ICURs). Sensitivity/scenario analyses were conducted to assess the model robustness. In all patients, Sin+Chemo vs Chemo increased costs by $6,472, additionally providing 0.61 QALYs, resulting in an ICUR of $10,610/QALY. While, in PD-L1 combined positive score ≥ 5 cohort, the ICUR was $9,738/QALYs. The ICUR was most sensitive to the utility of progression-free survival. The probabilistic sensitivity analysis showed that add-on Sin had a 100% probability of being cost-effective at a willingness-to-pay threshold of $18,625/QALY gained. Sin+Chemo is a cost-effective first-line treatment option for advanced HER2-negative GC/GEJC in China. ORIENT-16, , identifier is NCT03745170. [ABSTRACT FROM AUTHOR]

Antineutrophil cytoplasmic antibody-associated vasculitis (AAV) are rare autoimmune diseases characterized by inflammation of blood vessels. This study aimed to assess the cost-utility of avacopan in combination with rituximab (RTX) or cyclophosphamide (CYC) compared with glucocorticoids (GC) for the treatment of severe, active AAV in Spain. A 9-state Markov model was designed to reflect the induction of remission and sustained remission of AAV over a lifetime horizon. Clinical data and utility values were mainly obtained from the ADVOCATE trial, and costs (€ 2022) were sourced from national databases. Quality-adjusted life years (QALYs), and incremental cost-utility ratio (ICUR) were evaluated. An annual discount rate of 3% was applied. Sensitivity analyses were performed to examine the robustness of the results. Avacopan yielded an increase in effectiveness (6.52 vs. 6.17 QALYs) and costs (€16,009) compared to GC, resulting in an ICUR of €45,638 per additional QALY gained. Avacopan was associated with a lower incidence of end-stage renal disease (ESRD), relapse and hospitalization-related adverse events. Sensitivity analyses suggested that the model outputs were robust and that the progression to ESRD was a driver of ICUR. Avacopan is a cost-effective option for patients with severe, active AAV compared to GC in Spain. [ABSTRACT FROM AUTHOR]

Clinical outcomes in chronic lymphocytic leukemia (CLL) have improved with targeted therapy, including Bruton tyrosine kinase inhibitors such as acalabrutinib. A semi-Markov model with three health states (progression-free, progressed disease, and death) estimated cost per quality-adjusted life-year (QALY) gained for acalabrutinib ± obinutuzumab vs chlorambucil + obinutuzumab in treatment-naive CLL (based on ELEVATE-TN). The model used direct costs and resource utilization from the US Medicare perspective and utility values sourced from literature. Sensitivity analyses tested the robustness of the model. Over a 30-year lifetime horizon, the model base case analysis suggested that acalabrutinib monotherapy had an incremental cost of $206,329 and 2.52 QALYs gained versus chlorambucil + obinutuzumab, resulting in an incremental cost-effectiveness ratio (ICER) of $81,960/QALY. Acalabrutinib + obinutuzumab had an incremental cost of $423,747 and 2.79 QALYs gained (ICER: $152,153/QALY). Probabilistic sensitivity analysis showed the probability of acalabrutinib monotherapy being cost-effective as 59% to 73% at a $100,000-to-150,000/QALY willingness-to-pay threshold; the probability of acalabrutinib + obinutuzumab being cost-effective ranged from 34% to 51%. Although the analysis is limited by uncertainty in postprogression survival outcomes, acalabrutinib monotherapy is likely cost-effective vs chlorambucil + obinutuzumab in treatment-naive CLL in the US Medicare setting. [ABSTRACT FROM AUTHOR]

STN1013001 is an innovative latanoprost cationic emulsion for open-angle glaucoma/ocular hypertension (OAG/OHT) and ocular surface disease (OSD). A 5-year, 7 health states, 1-year cycle early Markov model-supported cost-utility analysis (CUA) of STN1013001 vs. other latanoprost formulations (Latanoprost) followed the Italian National Health Service (INHS) perspective. One-way, probabilistic and scenario sensitivity analyses tested the uncertainty of the baseline results. Value of information analysis (VOIA) investigated the potential cost-effectiveness of collecting further evidence. Over 5 years, the Markov model-supported CUA predicts STN1013001 to be potentially highly cost-effective vs. Latanoprost (+€57.60 cost at €2020 values; +0.089 Quality-Adjusted Life Years). The Incremental Cost-Utility Ratio (€647.65) falls well below the lower limit of the acceptability range proposed for Italy (€25,000-€40,000). Sensitivity analyses confirmed the robustness of the baseline findings. VOIA highlighted that further information might only be cost-effective for OAG/OHT utilities and OSD-related disutility. STN1013001 is potentially highly cost-effective and strongly dominant vs. Latanoprost for OAG/OHT+OSD patients from the INHS perspective. These findings should be re-assessed using the data from the ongoing Phase III trial (NCT04133311) comparing the efficacy and safety of STN1013001 vs. Latanoprost and with future real-world CUAs upon the availability of STN1013001 on the Italian market. [ABSTRACT FROM AUTHOR]

The advantage of tenecteplase (TNK) over alteplase (ALT) in managing acute ischemic stroke (AIS) has been reported, but the cost-effectiveness of these two strategies has not received as much attention. The objective of this study was to compare TNK and ALT for the management of AIS patients in Iran in terms of cost-effectiveness. This study was carried out from the payer's perspective in Iran, with a lifetime horizon. A full economic evaluation model was designed as a decision tree and a Markov model. After defining different Markov states, each health state was assigned a utility value, and quality-adjusted life year (QALY) was estimated using that value. The incremental cost-effectiveness ratio (ICER) was ultimately used for evaluating the comparative cost-effectiveness. Both deterministic and probabilistic sensitivity analyses were carried out. Compared to ALT, TNK can save approximately 4333.81 USD, and is able to increase one unit of QALY while saving approximately 17,450.29 USD. So, Base-case results showed that TNK strongly dominates ALT. Moreover, the base case results were strongly confirmed by deterministic and probabilistic sensitivity analysis. Base-case and sensitivity analysis showed that TNK is the dominant strategy compared to ALT for the management of AIS patients. [ABSTRACT FROM AUTHOR]

Despite the availability of several commercial rapid diagnostic tests (RDTs) developed to detect typhoid fever, the cost-effectiveness in resource-limited settings is unclear. This review aimed to explore the literature on typhoid economic evaluations in order to assess the cost-effectiveness of using typhoid RDTs in resource-limited settings. A systematic review was conducted focusing on the identification of economic evaluations of typhoid RDTs to diagnose patients with suspected typhoid fever. Two studies were identified and included for narrative synthesis. Whilst highlighting a gap in the published literature, this review shows the use of typhoid RDTs to potentially be cost-effective in resource-limited settings. Factors that appeared as significant in determining cost-effectiveness related to test characteristics (such as sensitivity, specificity, and cost) and the prevalence of typhoid fever and should factor into any future evaluations. Concerted effort is needed in resource-limited settings with regard to medical device regulation to ensure that clinically effective and cost-effective typhoid RDTs are widely available and introduced into clinical practice. Typhoid modeling (with respect to typhoid testing and treatment strategies) represents an understudied area and further work is needed. [ABSTRACT FROM AUTHOR]

Background: TNF inhibitors are costly drugs supplied generally on health systems or private insurances. Performance analysis is essential to verify the results achieved by health technologies in these systems. The objective of the study was to compare the two most used biological drugs for the treatment of psoriatic arthritis (PsA) in Brazil. Methods: A cost-utility analysis was built using a Markov model, with a five-year time horizon, a discount rate of 5%, and from the perspective of the Unified Health System. Deterministic and probabilistic sensitivity analyses were performed. Results: Etanercept was the most cost-effective drug. Adalimumab became the most cost-effective drug in one of the four analysis scenarios with a willingness to pay from one gross domestic product per capita. The deterministic sensitivity analysis identified that the cost parameters had the greatest impact on the most effective drug. The probabilistic sensitivity analysis indicated that etanercept is the drug most likely to be cost-effective. Conclusion: The difference between the drugs in terms of utility was minimal and the costs were the main factor that impacted the cost-utility ratio, which points to the benefits of price renegotiation for the efficient allocation of resources in the health system. [ABSTRACT FROM AUTHOR]

Background: Spending on drugs provided by the Brazilian Public Health System (BPHS) for the treatment of rheumatoid arthritis (RA) increased substantially with the beginning of the supply of biological disease-modifying anti-rheumatic drugs (bDMARD). This study aims to perform a cost-utility analysis of the most used biological drugs for the treatment of RA in Brazil.Methods: a Markov model was used to carry out the cost-utility analysis. The data were obtained from a prospective cohort of RA patients using adalimumab, etanercept, and golimumab in Brazil. The BPHS perspective was adopted and the time horizon was five years. Deterministic and probabilistic sensitivity analyses were performed to evaluate the uncertainty.Results: golimumab was the most cost-effective drug. Etanercept was dominated by golimumab. Adalimumab presented an incremental cost-utility ratio (ICUR) of $95,095.37 compared to golimumab in five years of follow-up. These results were confirmed by sensitivity analyses.Conclusion: the utility among adalimumab, etanercept, and golimumab was similar and the cost was the component that most impacted the economic model. Therefore, depending on the agreed price with the drug manufacturers, the incremental cost-utility ratio may vary among them. [ABSTRACT FROM AUTHOR]

Background: This study aimed to estimate the cost-utility of stereotactic body radiotherapy (SBRT) plus cetuximab for patients with previously irradiated recurrent squamous cell carcinoma of the head and neck.Methods: We constructed a Markov health-state transition model to simulate costs and clinical outcomes of recurrent squamous cell carcinoma of the head and neck. Model parameters were derived from the published literature and the National Health Insurance Administration reimbursement price list. Incremental cost-effectiveness ratio and the net monetary benefit were calculated from a health payer perspective. The impact of uncertainty was modeled with one-way and probabilistic sensitivity analyses.Results: In the base-case, SBRT plus cetuximab compared to SBRT alone resulted in an ICER of NT$ 840,455 per QALY gained. In the one-way sensitivity analysis, the utility of progression-free state for patients treated with SBRT plus cetuximab or SBRT alone and the cost of progression-free survival for SBRT+Cet were the most sensitive parameters in the model. Probabilistic sensitivity analysis showed that the probability of cost-effectiveness at a willingness-to-pay threshold of NT$ 2,252,340 per QALY was 100% for SBRT plus cetuximab but 0% for SBRT alone.Conclusions: This study showed that SBRT+Cet was cost-effective and benefited patients with previously irradiated rSCCHN. [ABSTRACT FROM AUTHOR]

Introduction: Early biological treatment of rheumatoid arthritis (RA) may reverse the autoimmune response in some patients resulting in favorable long-term outcomes. Although the cost-effectiveness of this strategy has been questioned, biosimilar entries warrant the revision of clinical and pharmaco-economic evidence. Areas covered: We conducted a systematic review of randomized controlled trials (RCTs) published up to 24 May 2018 in Pubmed, EMBASE and Cochrane CENTRAL, comparing infliximab with non-biological therapy in patients with RA naïve to methotrexate. We performed meta-analyses for efficacy outcomes at month 6 and years 1 and 2. Six RCTs were identified, involving 1832 patients. At month 6 ACR70 response and remission, and at year 1 ACR20/ACR70 responses and remission were improved significantly with first-line infliximab versus control. The differences were not significant at year 2. We reviewed cost-utility studies, up to 31 October 2018 in PubMed, Cochrane CENTRAL and the CRD HTA databases. Four studies indicated that first-line use of originator infliximab calculated at 2005–2008 prices was not cost-effective. Expert opinion: We demonstrated the efficacy benefits of first-line infliximab therapy up to 1 year in methotrexate-naïve RA. We highlighted the need for standardized reporting of outcomes and conducting cost-effectiveness analyses of first-line biosimilar therapy in RA. [ABSTRACT FROM AUTHOR]

Introduction: Innovative drugs have been approved in ophthalmology. Thus, the number and importance of economic evaluation studies of ophthalmic drugs have been growing. This study aims to assess the methodological quality of pharmacoeconomic studies of ophthalmic drugs.Areas Covered: A systematic search was conducted in Pubmed/Embase until November 2018 to identify full pharmacoeconomic studies evaluating ophthalmic drugs. The quality of studies was evaluated using the British Medical Journal (BMJ) checklist. Quality indicators were evaluated by Fisher's exact test. Ninety-five studies were included, 50 (52.6%) cost-utility analysis, 28 (29.5%) cost-effectiveness and 17 (17.9%) cost-effectiveness/cost-utility. All studies presented, at least, three methodological limitations. Cost-utility studies, studies conducted from a health system perspective, with time horizons longer than one-year and that rely on observational or observational and experimental data simultaneously are associated with higher quality. Only eight (8.4%) studies considered two eyes in the economic analysis and only 13 (13.7%) considered the natural history of the disease when extrapolating results for long-term analysis.Expert Opinion: The majority of the pharmacoeconomic studies were assessed as having good methodological quality, however, the methodological quality scores were sensitive to several indicators. Therefore, improving the quality of studies would enhance their usefulness in the decision-making processes. [ABSTRACT FROM AUTHOR]

Background: Outpatient parenteral antimicrobial therapy (OPAT) has been used for decades in different countries to reduce hospitalization rates, with favorable clinical and economic outcomes. This study assesses the cost-utility of OPAT compared to inpatient parenteral antimicrobial therapy (IPAT) from the perspective of a public university hospital and the Brazilian National Health System (Unified Health System -SUS).Methods: Prospective study with adult patients undergoing OPAT at an infusion center, compared to IPAT. Clinical outcomes and quality-adjusted life year (QALY) were assessed, as well as a micro-costing. Cost-utility analysis from the hospital and SUS perspectives were conducted by means of a decision tree, within a 30-day horizon time.Results: Forty cases of OPAT (1112 days) were included and monitored, with a favorable outcome in 97.50%. OPAT compared to IPAT generated overall savings of 31.86% from the hospital perspective and 26.53% from the SUS perspective. The intervention reduced costs, with an incremental cost-utility ratio of -44,395.68/QALY for the hospital and -48,466.70/QALY for the SUS, with better cost-utility for treatment times greater than 14 days. Sensitivity analysis confirmed the stability of the model.Conclusion: Our economic assessment demonstrated that, in the Brazilian context, OPAT is a cost-saving strategy both for hospitals and for the SUS. [ABSTRACT FROM AUTHOR]

Introduction: To evaluate the potential economic value and likely impact of a hypothetical rapid test in its early stages of development requires the use of models. The model structure and the type of model (dynamic/static) to employ are key considerations. The aim of the review was to explore the literature on typhoid economic evaluations and to explore the types of models that have been previously adopted in this setting for test-treat evaluations and to capture data on model inputs that may be useful for a de novo model.Areas Covered: A systematic review was conducted to identify economic evaluations focused on typhoid in established literature databases. Eight studies were identified and included for narrative synthesis. The review has revealed that there have been relatively few economic evaluations that have focused on typhoid fever, all of which have focused on the impact of interventions at the population level (vaccination) but not the individual level (test-treat strategies).Expert Commentary: Under certain circumstances, either a static model or a transmission dynamic model may be appropriate in the evaluation of an intervention for typhoid fever. Typhoid test-treat modeling represents a gray area where further work is needed. [ABSTRACT FROM AUTHOR]

Background: To assess the cost-utility of vortioxetine versus relevant comparators (agomelatine, bupropion SR, sertraline, and venlafaxine XR) in the finnish setting in major depressive disorder (MDD) patients with inadequate response to selective serotonin- /serotonin-norepinephrine reuptake inhibitors.Methods: A one-year analysis was conducted using a decision tree with a Markov state transition component. The health states were remission, relapse and recovery. A Finnish healthcare payer perspective was adopted.Results: Vortioxetine was less costly and more effective versus all comparators in both direct and societal perspectives. Vortioxetine reduced the average annual direct costs by 4% versus venlafaxine XR and 8% versus sertraline. The greater efficacy associated with vortioxetine was translated into a higher percentage of patients in remission and recovery. The model was most sensitive to changes in remission rates at 8 weeks.Conclusion: This cost-utility analysis showed vortioxetine to be a good alternative for MDD patients switching therapy in Finland. [ABSTRACT FROM AUTHOR]

Introduction: Economic evaluations conducted in children have unique features compared to adults. Important developments in pediatric economic evaluation in recent years include new options for valuing health states for cost-utility analysis (CUA) and shifting child health priorities. The Pediatric Economic Database Evaluation (PEDE) project includes a comprehensive database of pediatric health economic evaluations published since 1980. The objective of this scoping review was to identify trends over time in the use of CUA and other analytic techniques, and the therapeutic areas chosen for study. Areas covered: Medical and grey literature were searched, key characteristics were extracted, frequencies were tabulated and cross-tabulations were performed. Differences between early (1980 and 1999) and late (2000 and 2014) periods were assessed using a chi-squared statistic. Of the 2,776 pediatric economic evaluations published between 1980 and 2014, substantially more were cost-effectiveness analyses (CEAs) and CUAs than cost benefit analyses and cost minimization analyses (63.9 and 24.9% versus 7.6 and 3.6%, respectively). This pattern was consistent regardless of the type of intervention, disease or age group studied. A trend toward higher proportions of CUAs and CEAs was evident in the later period (X2 p < 0.0001). Other significant trends included a higher proportion of studies of preventive interventions (X2 p < 0.0001), and more studies in children aged 1 to 12 years and fewer in perinates in the later period (X2 p < 0.0001). Overall the most common disease class studied was infectious diseases (29.2%). Expert commentary: Pediatric economic evaluation continues to grow in volume and methodologic complexity. While CUAs have increased, whether their quality has improved remains unknown. Although most studies are in infectious disease, the volume of publications may not align with emerging child health priorities such as adolescent health, injury, developmental disabilities, mental health, and the use of personalized medicine. Increasing economic evaluations in these areas will enhance pediatric decision-making. [ABSTRACT FROM AUTHOR]

Introduction: For patients with late-stage (metastatic) breast cancer, the impact of treatment on health-related quality of life is a key factor in decision-making. A systematic review was conducted to identify health state utility values (HSUVs) for late-stage breast cancer, derived using methods preferred by health technology assessment (HTA) agencies, by treatment line. The aim was to generate a list of HSUVs, that could help to justify the values used to populate cost-utility models. Areas covered: Ten electronic databases, international congress websites and online HSUV databases were searched (January 1995-May 2014) for HSUVs for adults with late-stage breast cancer that had been derived from methods favoured by HTA agencies. Publications were included only if they reported studies that originated HSUVs. Expert commentary: Large numbers of HSUVs are available for late-stage breast cancer in the published literature. Contrary to expectations, the HSUVs reported in the literature vary greatly for some health states. As a result, the choice of HSUV can have considerable implications for the outcomes of economic evaluations. Standardization of HSUV methodology is expected to reduce variability; however, further research is recommended for assessing the sensitivity of generic preference-based measures in late-stage (metastatic) breast cancer. [ABSTRACT FROM AUTHOR]

Objective: This study aims to compare the lifetime costs and health outcomes of both first-line and sequential combination treatments with standard treatment for pulmonary arterial hypertension (PAH) associated with congenital heart disease (CHD) (PAH-CHD) patients.Methods: A cost-utility analysis was performed using a Markov model based on a societal perspective. One-way and probabilistic sensitivity analyses were performed to investigate the effect of parameter uncertainty.Results: As first-line treatments, both beraprost (incremental cost-effectiveness ratio (ICER) = 192,752 and 201,308 Thai baht (THB) per quality-adjusted life year (QALY) gained) and sildenafil (ICER = 249,770 and 226,802 THB per QALY gained) seemed cost-effective for PAH-CHD patients aged ≤30 years in functional classes II and III, respectively, while no treatment was cost-effective for the sequential combination therapy.Conclusions: Sildenafil should be included in the National Drug List of Essential Medicines as the first-line treatment for PAH-CHD, and its price per dose should be negotiated to be reduced by 43-57%. [ABSTRACT FROM AUTHOR]

Children are not mini-adults, and thus require studies to be conducted in the population of interest to inform decisions about their care. The paucity of such studies for clinical efficacy lead them to be termed ‘therapeutic orphans’. Following the introduction of the ‘fourth hurdle’ of reimbursement approval on the basis of cost-utility analysis, utility data is now a key requirement for patients to access treatments in England and many other countries. This special report considers whether a paucity of utility valuation studies in children may have made them ‘economic orphans’ as well and presents results of a review of NICE appraisals as a window on this problem over time. [ABSTRACT FROM PUBLISHER]

Although economic evaluations have been performed alongside factorial trials, there seems to be limited guidance/consensus on appropriate methods of analysis. Following Centre for Review and Dissemination guidance, a systematic review of published literature for all years was performed to explore how economic evaluation alongside factorial trials have been conducted and only full economic evaluations conducted alongside factorial trials were included. A total of 16 relevant studies were identified, and an assessment of these indicated that two methods: within-the-table and at-the-margins approaches were used for the analysis. With the exception of one study, all others did not consider interactions in costs and outcomes or give a detailed explanation of why a particular approach was adopted. The authors recommend that additional guidance is needed, and further research is required to evaluate the impact of alternative methods on policy recommendations and establish good practice methods for the economic analysis of factorial trials. [ABSTRACT FROM AUTHOR]

Background: In Thailand, there has been no economic evaluation study of adjuvant chemotherapy for stage III colon cancer patients after resection. Objective: This study aims to evaluate the cost-utility of all chemotherapy regimens currently used in Thailand compared with the adjuvant 5-fluorouracil/leucovorin (5-FU/LV) plus capecitabine as the first-line therapy for metastatic disease in patients with stage III colon cancer after resection. Methods: A cost-utility analysis was performed to estimate the relevant lifetime costs and health outcomes of chemotherapy regimens based on a societal perspective using a Markov model. Results: The results suggested that the adjuvant 5-FU/LV plus capecitabine as the first-line therapy for metastatic disease would be the most cost-effective chemotherapy. Conclusions: The adjuvant FOLFOX and FOLFIRI as the first-line treatment for metastatic disease would be cost-effective with an incremental cost-effectiveness ratio of 299,365 Thai baht per QALY gained based on a societal perspective if both prices of FOLFOX and FOLFIRI were decreased by 40%. [ABSTRACT FROM AUTHOR]

Conventional coronary angiography (CCA) is the standard diagnostic for coronary artery disease (CAD), but multi-detector computed tomography coronary angiography (CTCA) is a non-invasive alternative. Methods: A multi-center coverage with evidence development study was undertaken and combined with an economic model to estimate the cost-effectiveness of CTCA followed by CCA vs CCA alone. Alternative assumptions were tested in patient scenario and sensitivity analyses. Results: CCA was found to dominate CTCA, however, CTCA was relatively more cost-effective in females, in advancing age, in patients with lower pre-test probabilities of CAD, the higher the sensitivity of CTCA and the lower the probability of undergoing a confirmatory CCA following a positive CTCA. Conclusions: Results were very sensitive to alternative patient populations and modeling assumptions. Careful consideration of patient characteristics, procedures to improve the diagnostic yield of CTCA and selective use of CCA following CTCA will impact whether CTCA is cost-effective or dominates CCA. [ABSTRACT FROM AUTHOR]

The Pharmaceutical Management Agency in New Zealand, PHARMAC, was established in 1993 at a time when growth in pharmaceutical expenditure was very high and arguably unsustainable. PHARMAC was charged with finding new and effective ways to manage expenditure growth, while also obtaining the best health outcomes for the New Zealand population. In order to help achieve this goal, PHARMAC has used Programme Budgeting Marginal Analysis. The use of Programme Budgeting Marginal Analysis, together with a capped budget and tools to generate savings, has significantly contributed to PHARMAC achieving its objective. However, there are implications of using Programme Budgeting Marginal Analysis with a capped budget. In particular, a different approach is required when undertaking and using cost--utility analysis (focused strongly on relative cost--effectiveness), and the opportunity cost of poor decisions is magnified significantly. As the demand on pharmaceutical expenditure continues to rise, the opportunity cost of not having a capped budget and tools for controlling pharmaceutical subsidies will only increase. [ABSTRACT FROM AUTHOR]

Cost—effectiveness analyses, particularly in the USA, commonly use a figure of $50,000 per life-year or quality-adjusted life-year gained as a threshold for assessing the cost-effectiveness of an intervention. The history of this practice is ill defined, although it has been linked to the end-stage renal disease kidney dialysis cost-effectiveness literature from the 1980s. The use of $50,000 as a benchmark for assessing the cost-effectiveness of an intervention first emerged in 1992 and became widely used after 1996. The appeal of the $50,000 figure appears to lie in the convenience of a round number rather than in the value of renal dialysis. Rather than arbitrary thresholds, estimates of willingness to pay and the opportunity cost of healthcare resources are needed. [ABSTRACT FROM AUTHOR]