The Interaction between Price Negotiations and Heterogeneity: Implications for Economic Evaluations

2020 ◽  
Vol 40 (2) ◽  
pp. 144-155
Author(s):  
Helen O’Donnell ◽  
Laura McCullagh ◽  
Michael Barry ◽  
Cathal Walsh
Keyword(s):  
Decision Making ◽  
Cost Effectiveness ◽  
Incremental Cost ◽  
Hybrid Approach ◽  
Cost Effective ◽  
Worked Examples ◽  
Population Heterogeneity ◽  
Medical Decision ◽  
Economic Evaluations ◽  
Price Negotiations

Economic evaluation is an important element of the decision making process for the reimbursement of drugs. Heterogeneity can be considered an explained variation in clinical or economic outcomes based on the clinical and sociodemographic characteristics of patients. However, to our knowledge, the relationship between price negotiations and population heterogeneity has not been considered in the literature to date. If a company offers a conditional discount that is dependent on obtaining reimbursement in 2 subgroups or indications, an interaction is generated between groups that should be accounted for in economic evaluations. Critically, where the drug has 2 indications but is only cost-effective in 1 indication at the full price (herein “indication 1”), the cost savings realized from implementation of the discount in indication 1 can be used to offset the incremental cost of extending reimbursement to indication 2 at the discounted price. This reduces the incremental cost-effectiveness ratio and increases the probability of positive reimbursement compared to a stratified approach. Given the additional complexity that this introduces, we introduce a framework deemed the “hybrid approach” to guide the economic assessment. We present 2 worked examples. We show that failure to account for the interaction can lead to inaccurate conclusions regarding a drug’s cost effectiveness and that adoption of strategic behavior could theoretically increase the reimbursement price of drugs. By adopting this framework, cost-effective interventions are identified that may have been previously misclassified as not being cost-effective and vice versa. Recognition of the interaction in the literature by pharmaceutical companies may influence the forms of discounts offered to decision makers. Therefore, we expect this research to have far-reaching effects on medical decision making.

scholarly journals An Economic Evaluation of a Comprehensive School-Based Caries Prevention Program

2019 ◽  
Vol 4 (4) ◽  
pp. 378-387 ◽  
Author(s):  
S.S. Huang ◽  
R.R. Ruff ◽  
R. Niederman
Keyword(s):  
Cost Effectiveness ◽  
Incremental Cost ◽  
Cost Effective ◽  
Prevention Programs ◽  
Caries Prevention ◽  
Health Impacts ◽  
Economic Evaluations ◽  
Posterior Teeth ◽  
School Based ◽  
The Cost

Introduction: Current economic evaluations of school-based caries prevention programs (SCPPs) do not compare multiple types of SCPPs against each other and do not consider teeth beyond permanent first molars. Objectives: To assess the cost-effectiveness of a comprehensive SCPP relative to an SCPP focused on delivering sealants for permanent first molars only and to a default of no SCPP. Based on a societal perspective, a simulation model was used that compared the health and cost impacts on 1) permanent first molars only and 2) all posterior teeth. Methods: To calibrate the model, we used data from CariedAway, a comprehensive SCPP that used glass ionomer to prevent and arrest active decay among children. We then evaluated the incremental cost-effectiveness of implementing 3 alternate school-based approaches (comprehensive, sealant only, and no program) on only first molars and all posterior teeth. Probabilistic, 1-, and 2-way sensitivity analyses are included for robustness. Cost-effectiveness is assessed with a threshold of $54,639 per averted disability-adjusted life year (DALY). Results: We first compared the 3 programs under the assumption of treating only first molars. This assessment indicated that CariedAway was less cost-effective than school-based sealant programs (SSPs): the resulting incremental cost-effectiveness ratio (ICER) for CariedAway versus SSPs was $283,455 per averted DALY. However, when the model was extended to include CariedAway’s treatment of all posterior teeth, CariedAway was not only cost-effective but also cost-saving relative to SSPs (ICER, –$943,460.88 per averted DALY; net cost, –$261.45) and no SCPP (ICER, –$400,645.52 per averted DALY; net cost, –$239.77). Conclusions: This study finds that economic evaluations assessing only cost and health impacts on permanent first molars may underestimate the cost-effectiveness of comprehensive SCPPs 1) preventing and arresting decay and 2) treating all teeth. Hence, there is an urgent need for economic evaluations of SCPPs to assess cost and health impacts across teeth beyond only permanent first molars. Knowledge Transfer Statement: The results of this study can be used by policy makers to understand how to evaluate economic evaluations of school-based caries prevention programs and what factors to consider when deciding on what types of programs to implement.

Economic evaluation of laparoscopic surgery for colorectal cancer

2007 ◽  
Vol 23 (4) ◽  
pp. 464-472 ◽  
Author(s):  
Robyn M. de Verteuil ◽  
Rodolfo A. Hernández ◽  
Luke Vale ◽  
Keyword(s):  
Colorectal Cancer ◽  
Systematic Review ◽  
Laparoscopic Surgery ◽  
Cost Effectiveness ◽  
Incremental Cost ◽  
Open Surgery ◽  
Disease Free Survival ◽  
Cost Effective ◽  
Economic Evaluations ◽  
Short Term

Objectives: The aim of this study was to assess the cost-effectiveness of laparoscopic surgery compared with open surgery for the treatment of colorectal cancer.Methods: A Markov model was developed to model cost-effectiveness over 25 years. Data on the clinical effectiveness of laparoscopic and open surgery for colorectal cancer were obtained from a systematic review of the literature. Data on costs came from a systematic review of economic evaluations and from published sources. The outcomes of the model were presented as the incremental cost per life-year gained and using cost-effectiveness acceptability curves to illustrate the likelihood that a treatment was cost-effective at various threshold values for society's willingness to pay for an additional life-year.Results: Laparoscopic surgery was on average £300 more costly and slightly less effective than open surgery and had a 30 percent chance of being cost-effective if society is willing to pay £30,000 for a life-year. One interpretation of the available data suggests equal survival and disease-free survival. Making this assumption, laparoscopic surgery had a greater chance of being considered cost-effective. Presenting the results as incremental cost per quality-adjusted life-year (QALY) made no difference to the results, as utility data were poor. Evidence suggests short-term benefits after laparoscopic repair. This benefit would have to be at least 0.01 of a QALY for laparoscopic surgery to be considered cost-effective.Conclusions: Laparoscopic surgery is likely to be associated with short-term quality of life benefits, similar long-term outcomes, and an additional £300 per patient. A judgment is required as to whether the short-term benefits are worth this extra cost.

scholarly journals Cost-effectiveness of exercise therapy in patients with coronary heart disease, chronic heart failure and associated risk factors: A systematic review of economic evaluations of randomized clinical trials

2019 ◽  
Vol 27 (10) ◽  
pp. 1045-1055 ◽  
Author(s):  
Neil Oldridge ◽  
Rod S Taylor
Keyword(s):  
Heart Failure ◽  
Cost Effectiveness ◽  
Incremental Cost ◽  
Intermittent Claudication ◽  
Exercise Therapy ◽  
Cost Effective ◽  
Cost Utility ◽  
Economic Evaluations ◽  
Value For Money ◽  
The Cost

Aims Prescribed exercise is effective in adults with coronary heart disease (CHD), chronic heart failure (CHF), intermittent claudication, body mass index (BMI) ≥25 kg/m2, hypertension or type 2 diabetes mellitus (T2DM), but the evidence for its cost-effectiveness is limited, shows large variations and is partly contradictory. Using World Health Organization and American Heart Association/American College of Cardiology value for money thresholds, we report the cost-effectiveness of exercise therapy, exercise training and exercise-based cardiac rehabilitation. Methods Electronic databases were searched for incremental cost-effectiveness and incremental cost–utility ratios and/or the probability of cost-effectiveness of exercise prescribed as therapy in economic evaluations conducted alongside randomized controlled trials (RCTs) published between 1 July 2008 and 28 October 2018. Results Of 19 incremental cost–utility ratios reported in 15 RCTs in patients with CHD, CHF, intermittent claudication or BMI ≥25 kg/m2, 63% met both value for money thresholds as ‘highly cost-effective’ or ‘high value’, with 26% ‘not cost-effective’ or of ‘low value’. The probability of intervention cost-effectiveness ranged from 23 to 100%, probably due to the different populations, interventions and comparators reported in the individual RCTs. Confirmation with the Consolidated Health Economic Evaluation Reporting checklist varied widely across the included studies. Conclusions The findings of this review support the cost-effectiveness of exercise therapy in patients with CHD, CHF, BMI ≥25 kg/m2 or intermittent claudication, but, with concerns about reporting standards, need further confirmation. No eligible economic evaluation based on RCTs was identified in patients with hypertension or T2DM.

scholarly journals Cost-Effectiveness Evaluations of Psychological Therapies for Schizophrenia and Bipolar Disorder: A Systematic Review

2019 ◽  
Vol 35 (4) ◽  
pp. 317-326 ◽  
Author(s):  
Gemma Elizabeth Shields ◽  
Deborah Buck ◽  
Jamie Elvidge ◽  
Karen Petra Hayhurst ◽  
Linda Mary Davies
Keyword(s):  
Bipolar Disorder ◽  
Cost Effectiveness ◽  
Incremental Cost ◽  
Data Extraction ◽  
Cost Effective ◽  
Current Evidence ◽  
Economic Evaluations ◽  
Psychological Interventions ◽  
Routine Practice ◽  
Psychological Therapies

AbstractObjectivesThis review aims to assess the cost-effectiveness of psychological interventions for schizophrenia/bipolar disorder (BD), to determine the robustness of current evidence and identify gaps in the available evidence.MethodsElectronic searches (PsycINFO, MEDLINE, Embase) identified economic evaluations relating incremental cost to outcomes in the form of an incremental cost-effectiveness ratio published in English since 2000. Searches were concluded in November 2018. Inclusion criteria were: adults with schizophrenia/BD; any psychological/psychosocial intervention (e.g., psychological therapy and integrated/collaborative care); probability of cost-effectiveness at explicitly defined thresholds reported. Comparators could be routine practice, no intervention, or alternative psychological therapies. Screening, data extraction, and critical appraisal were performed using pre-specified criteria and forms. Results were summarized qualitatively. The protocol was registered on the PROSPERO database (CRD42017056579).ResultsOf 3,864 studies identified, 12 met the criteria for data extraction. All were integrated clinical and economic randomized controlled trials. The most common intervention was cognitive behavioral therapy (CBT, 6/12 studies). The most common measure of health benefit was the quality-adjusted life-year (6/12). Follow-up ranged from 6 months to 5 years. Interventions were found to be cost-effective in most studies (9/12): the probability of cost-effectiveness ranged from 35-99.5 percent. All studies had limitations and demonstrated uncertainty (particularly related to incremental costs).ConclusionsMost studies concluded psychological interventions for schizophrenia/BD are cost-effective, including CBT, although there was notable uncertainty. Heterogeneity across studies makes it difficult to reach strong conclusions. There is a particular need for more evidence in the population with BD and for longer-term evidence across both populations.

Economic evaluation of drug-eluting stents: A systematic literature review and model-based cost–utility analysis

2007 ◽  
Vol 23 (4) ◽  
pp. 473-479 ◽  
Author(s):  
Pekka Kuukasjärvi ◽  
Pirjo Räsänen ◽  
Antti Malmivaara ◽  
Pasi Aronen ◽  
Harri Sintonen
Keyword(s):  
Cost Effectiveness ◽  
Incremental Cost ◽  
Cost Effective ◽  
Cost Utility ◽  
Drug Eluting Stents ◽  
Economic Evaluations ◽  
Model Based ◽  
Drug Eluting ◽  
The Cost

Objectives:The aim of this study was to systematically review economic analyses comparing drug-eluting stents (DES) to bare metal stents (BMS) in patients who undergo percutaneous coronary intervention to form an overall view about cost-effectiveness of DES and to construct a simple decision analysis model to evaluate the cost–utility of DES.Methods:Electronic databases searched from January 2004 to January 2006 were Cochrane Database of Systematic Reviews; DARE, HTA, EED (NHS CRD); MEDLINE(R) In-Process, Other Non-Indexed Citations, MEDLINE(R). References of the papers identified were checked. We included randomized controlled trials (RCT) or model-based cost-effectiveness analyses comparing DES to BMS in patients with coronary artery disease. The methodological quality of the papers was assessed by Drummond's criteria. Baseline characteristics and results of the studies were extracted and data synthesized descriptively. A decision tree model was constructed to evaluate the cost–utility of DES in comparison to BMS, where health-related quality of life was measured by the 15D.Results:We identified thirteen good-quality economic evaluations. In two of these based on RCTs, DES was found cost-effective. In six studies, it was concluded that DES might probably be a cost-effective strategy in some circumstances, but not as a single strategy, and four studies concluded that DES is not cost-effective. One study did not draw a clear conclusion. In our analysis, the overall incremental cost-effectiveness ratio was €98,827 per quality-adjusted life-years gained. Avoiding one revascularization with DES would cost €4,794, when revascularization with BMS costs €3,260.Conclusions:The evidence is inconsistent of whether DES would be a cost-effective treatment compared with BMS in any healthcare system where evaluated. A marked restenosis risk reduction should be achieved before use of DES is justifiable at present prices. When considering adoption of a new health technology with a high incremental cost within a fixed budget, opportunity cost in terms of untreated patients should be seriously considered as a question of collective ethics.

Community or patient preferences for cost-effectiveness of cardiac rehabilitation: does it matter?

2008 ◽  
Vol 15 (5) ◽  
pp. 608-615 ◽  
Author(s):  
Neil Oldridge ◽  
William Furlong ◽  
Anthony Perkins ◽  
David Feeny ◽  
George W. Torrance
Keyword(s):  
Cost Effectiveness ◽  
Cardiac Rehabilitation ◽  
Incremental Cost ◽  
Usual Care ◽  
Randomized Trial ◽  
Patient Preferences ◽  
Secondary Analysis ◽  
Cost Effective ◽  
Economic Evaluations ◽  
Life Years

Background Few healthcare economic evaluations, and none in cardiac rehabilitation, report results based on both community and patient preferences for health outcomes. We published the results of a randomized trial of cardiac rehabilitation after myocardial infarction in 1994 in which preferences were measured using both perspectives but only patient preferences were reported. This secondary analysis uses both types of preference measurements. Methods We collected community Quality of Well-Being (QWB) and patient Time Trade-off (TTO) preference scores from 188 patients (rehabilitation, n = 93; usual care, n = 95) on entry into the trial, at 2 months (end of the intervention) and again at 4, 8, and 12 months. Mean preference scores over the 12-month follow-up study period, estimates of quality-adjusted life years (QALYs) gained per patient, incremental cost-effectiveness ratios [costs inflated to 2006 US dollars] and probabilities of the cost-effectiveness of rehabilitation for costs per QALY up to US$100 000 are reported. Results Mean QWB preference scores were lower ( P < 0.01) than the corresponding mean TTO preference scores at each assessment point. The 12-month changes in mean QWB and TTO preference scores were large and positive ( P < 0.001) with rehabilitation patients gaining a mean of 0.011 (95% confidence interval, –0.030 to +0.052) more QWB-derived QALYs, and 0.040 (–0.026, 0.107) more TTO-derived QALYs, per patient than usual care patients. The incremental cost-effectiveness ratio for QWB-derived QALYs was estimated at $60270/QALY (about €50 600/QALY) and at $16580/QALY (about €13 900/QALY) with TTO-derived QALYs. With a willingness to spend $100 000/QALY, the probability of rehabilitation being cost-effective is 0.58 for QWB-derived QALYs and 0.83 for TTO-derived QALYs. Conclusion This secondary analysis of data from a randomized trial indicates that cardiac rehabilitation is cost-effective from a community perspective and highly cost-effective from the perspective of patients.

scholarly journals Economic evaluation of robot-assisted radical prostatectomy compared to open radical prostatectomy for prostate cancer treatment in Ontario, Canada

2020 ◽  
Vol 14 (8) ◽  
Author(s):  
Anna Parackal ◽  
Jean-Eric Tarride ◽  
Feng Xie ◽  
Gord Blackhouse ◽  
Jennifer Hoogenes ◽  
...  
Keyword(s):  
Cost Effectiveness ◽  
Radical Prostatectomy ◽  
Time Horizon ◽  
Cost Effective ◽  
Cost Utility ◽  
Economic Evaluations ◽  
Base Case ◽  
Robot Assisted ◽  
Open Radical Prostatectomy ◽  
Life Years

Introduction: Recent health technology assessments (HTAs) of robot-assisted radical prostatectomy (RARP) in Ontario and Alberta, Canada, resulted in opposite recommendations, calling into question whether benefits of RARP offset the upfront investment. Therefore, the study objectives were to conduct a cost-utility analysis from a Canadian public payer perspective to determine the cost-effectiveness of RARP. Methods: Using a 10-year time horizon, a five-state Markov model was developed to compare RARP to open radical prostatectomy (ORP). Clinical parameters were derived from Canadian observational studies and a recently published systematic review. Costs, resource utilization, and utility values from recent Canadian sources were used to populate the model. Results were presented in terms of increment costs per quality-adjusted life years (QALYs) gained. A probabilistic analysis was conducted, and uncertainty was represented using cost-effectiveness acceptability curves (CEACs). One-way sensitivity analyses were also conducted. Future costs and QALYs were discounted at 1.5%. Results: Total cost of RARP and ORP were $47 033 and $45 332, respectively. Total estimated QALYs were 7.2047 and 7.1385 for RARP and ORP, respectively. The estimated incremental cost-utility ratio (ICUR) was $25 704 in the base-case analysis. At a willingness-to-pay threshold of $50 000 and $100 000 per QALY gained, the probability of RARP being cost-effective was 0.65 and 0.85, respectively. The model was most sensitive to the time horizon. Conclusions: The results of this analysis suggest that RARP is likely to be cost-effective in this Canadian patient population. The results are consistent with Alberta’s HTA recommendation and other economic evaluations, but challenges Ontario’s reimbursement decision.

Cost-Effectiveness: Cholinesterase Inhibitors and Memantine in Vascular Dementia

2009 ◽  
Vol 36 (6) ◽  
pp. 735-739 ◽  
Author(s):  
Camilla L. Wong ◽  
Nick Bansback ◽  
Philip E. Lee ◽  
Aslam H. Anis
Keyword(s):  
Cost Effectiveness ◽  
Adverse Events ◽  
Incremental Cost ◽  
Vascular Dementia ◽  
Standard Care ◽  
Cholinesterase Inhibitors ◽  
Cost Effective ◽  
Decision Analysis Model ◽  
Physician Visits ◽  
Cost Effective Treatment

Background:Several randomized controlled trials of cholinesterase inhibitors and memantine in mild to moderate vascular dementia have demonstrated the efficacy of these treatments. However, given these drugs incur considerable cost, the economic argument for their use is less clear.Objective:To determine the incremental cost-effectiveness of cholinesterase inhibitors and memantine for mild to moderate vascular dementia.Design:A decision analysis model using a 24-28 week time horizon was developed. Outcomes of cholinesterase inhibitors and memantine and probabilities of adverse events were extracted from a systematic review. Costs of adverse events, medications, and physician visits were obtained from local estimates. Robustness was tested with probabilistic sensitivity analysis using a Monte Carlo simulation.Interventions:Donepezil 5 mg daily, donepezil 10 mg daily, galantamine 16-24 mg daily, rivastigmine flexible dosing up to 6 mg twice daily, or memantine 10 mg twice daily versus standard care.Main Outcome Measures:Incremental cost-effectiveness ratio (ICER) expressed as cost per unit decrease in the Alzheimer's Disease Assessment Scale-cognitive (ADAS-cog) subscale.Results:Donepezil 10 mg daily was found to be the most cost-effective treatment with an ICER of $400.64 (95%CI, $281.10-$596.35) per unit decline in the ADAS-cog subscale. All other treatments were dominated by donepezil 10 mg, that is, more costly and less effective.Conclusion:From a societal perspective, treatment with cholinesterase inhibitors or memantine was more effective but also more costly than standard care for mild to moderate vascular dementia. The donepezil 10 mg strategy was the most cost-effective and also dominated the other alternatives.

Principles of Cost-Effective Resource Allocation in Health Care organizations

1990 ◽  
Vol 6 (1) ◽  
pp. 93-103 ◽  
Author(s):  
Milton C. Weinstein
Keyword(s):  
Health Care ◽  
Decision Making ◽  
Cost Effectiveness ◽  
Health Care Organizations ◽  
Cost Effective ◽  
Limited Resources ◽  
Effectiveness Analysis ◽  
The Cost ◽  
Common Understanding ◽  
Analytical Errors

Cost-effectiveness analysis (CEA) is a method of economic evaluation that can be used to assess the efficiency with which health care technologies use limited resources to produce health outputs. However, inconsistencies in the way that such ratios are constructed often lead to misleading conclusions when CEAs are compared. Some of these inconsistencies, such as failure to discount or to calculate incremental ratios correctly, reflect analytical errors that, if corrected, would resolve the inconsistencies. Others reflect fundamental differences in the viewpoint of the analysis. The perspectives of different decision-making entities can properly lead to different items in the numerator and denominator of the cost-effectiveness (C/E) ratio. Producers and consumers of CEA need to be more conscious of the perspectives of analysis, so that C/E comparisons from a given perspective are based upon a common understanding of the elements that are properly included.

Cost-effectiveness of dual-mobility components in patients with displaced femoral neck fractures

2021 ◽  
Vol 103-B (12) ◽  
pp. 1783-1790
Author(s):  
Spencer Montgomery ◽  
Jonathan Bourget-Murray ◽  
Daniel Z. You ◽  
Leo Nherera ◽  
Amir Khoshbin ◽  
...  
Keyword(s):  
Sensitivity Analysis ◽  
Cost Effectiveness ◽  
Femoral Neck ◽  
Incremental Cost ◽  
Probabilistic Sensitivity Analysis ◽  
Cost Effective ◽  
Physiological Age ◽  
Base Case ◽  
Dual Mobility ◽  
Displaced Femoral Neck Fractures

Aims Total hip arthroplasty (THA) with dual-mobility components (DM-THA) has been shown to decrease the risk of dislocation in the setting of a displaced neck of femur fracture compared to conventional single-bearing THA (SB-THA). This study assesses if the clinical benefit of a reduced dislocation rate can justify the incremental cost increase of DM-THA compared to SB-THA. Methods Costs and benefits were established for patients aged 75 to 79 years over a five-year time period in the base case from the Canadian Health Payer’s perspective. One-way and probabilistic sensitivity analysis assessed the robustness of the base case model conclusions. Results DM-THA was found to be cost-effective, with an estimated incremental cost-effectiveness ratio (ICER) of CAD $46,556 (£27,074) per quality-adjusted life year (QALY). Sensitivity analysis revealed DM-THA was not cost-effective across all age groups in the first two years. DM-THA becomes cost-effective for those aged under 80 years at time periods from five to 15 years, but was not cost-effective for those aged 80 years and over at any timepoint. To be cost-effective at ten years in the base case, DM-THA must reduce the risk of dislocation compared to SB-THA by at least 62%. Probabilistic sensitivity analysis showed DM-THA was 58% likely to be cost-effective in the base case. Conclusion Treating patients with a displaced femoral neck fracture using DM-THA components may be cost-effective compared to SB-THA in patients aged under 80 years. However, future research will help determine if the modelled rates of adverse events hold true. Surgeons should continue to use clinical judgement and consider individual patients’ physiological age and risk factors for dislocation. Cite this article: Bone Joint J 2021;103-B(12):1783–1790.

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