Z. Evid. Fortbild. Qual. Gesundh. wesen (ZEFQ) (2014) 108, 367—374
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SCHWERPUNKT
Health economic evaluation in England Kosten-Nutzen-Bewertung in England James Raftery ∗ University of Southampton, Southampton, United Kingdom Submitted/eingegangen 9 May 2014; revised/überarbeitet 5 August 2014; accepted/akzeptiert 28 August 2014
KEYWORDS Health-economic evaluation; England; reimbursement; decision making
SCHLÜSSELWÖRTER Kosten-NutzenBewertung; England; Erstattung; Entscheidungsfindung
∗
Summary The 2010 National Health Service Constitution for England specified rights and responsibilities, including health economic evaluation for the National Institute for Health and Care Excellence (NICE) and the Joint Committee on Vaccinations and Immunisations. The National Screening Committee and the Health Protection Agency also provide advice to the Government based on health economic evaluation. Each agency largely follows the methods specified by NICE. To distinguish the methods from neoclassical economics they have been termed ‘‘extrawelfarist’’. Key differences include measurement and valuation of both benefits (QALYs) and costs (healthcare related). Policy on discounting has also changed over time and by agency. The debate over having NICE’s methods align more closely with neoclassical economics has been prominent in the ongoing development of ‘‘value based pricing’’. The political unacceptability of some decisions has led to special funding for technologies not recommended by NICE. These include the 2002 Multiple Sclerosis Risk Sharing Scheme and the 2010 Cancer Drugs Fund as well as special arrangements for technologies linked to the end of life and for innovation. Since 2009 Patient Access Schemes have made price reductions possible which sometimes enables drugs to meet NICE’s cost-effectiveness thresholds. As a result, the National Health Service in England has denied few technologies on grounds of cost-effectiveness. Zusammenfassung Mit der Neuverfassung des National Health Service 2010 wurden Rechte und Zuständigkeiten konkretisiert; die Kosten-Nutzen-Bewertung wurde beim National Institute for Clinical and Social Excellence (NICE) und beim Joint Committee on Vaccinations and Immunisations (JCVI) angesiedelt. Das National Screening Committe und die Health Protection Agency können die Regierung auch auf Grundlage von Kosten-Nutzen-Bewertungen beraten. Die Behörden und Einrichtungen richten sich dabei nach den Methoden des NICE. Die gesundheitsökonomischen Methoden des NICE werden allgemein unter dem Begriff des Extrawelfarismus subsumiert, um sie von der neoklassischen Wohlfahrtstheorie abzugrenzen. Im Kern schlägt sich dies in unterschiedlichen Erhebungs- und Bewertungsmethoden des Nutzens
Corresponding author: James Raftery PhD, University of Southampton, Southampton, United Kingdom. Tel.: +442380595646. E-Mail: [email protected]
http://dx.doi.org/10.1016/j.zefq.2014.08.019 1865-9217/
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J. Raftery (QALYs) und der Kosten (Perspektive des NHS) nieder. Zu erwähnen ist außerdem, dass sich die Diskontierung über die Zeit und zwischen den verschiedenen Einrichtungen unterschiedlich entwickelt. Im Zusammenhang mit der Einführung des Value Based Pricing wurde und wird in einer Ende Juni 2014 beendeten öffentlichen Debatte darüber gestritten, ob sich die Methoden des NICE nicht näher an die des britischen Finanzministeriums (UK Treasury) anlehnen sollten. Da man einige Entscheidungen des NICE zu Arzneimitteln als politisch inakzeptabel ansah, wurden besondere Budgets für Interventionen eingeführt, deren Erstattung von NICE abgelehnt wurden. Dazu gehören das Multiple Sclerosis Risk Sharing Scheme (2002) und der Cancer Drugs Fund (2010) sowie besondere Prämien für Interventionen am Ende des Lebens und für Innovationen. Seit 2009 werden über Patient Access Schemes Preissenkungen gefordert, so dass die Schwellenwerte des NICE erreicht werden. Insgesamt muss man sagen, dass der NHS in England auf der Basis von Kosteneffektivität die Erstattung von sehr wenigen Interventionen abgelehnt hat.
Introduction Health economics does not have any legal status in England, reflecting the lack of a formal constitution [1]. The National Health Service (NHS) however has a Constitution [2], which specifies patients’ rights to treatments recommended by the National Institute for Health and Care Excellence (NICE) and similar agencies. The NHS constitution, which applies only to England, lays down the objectives of the National Health Service, the rights and responsibilities of the various parties involved in health care and the guiding principles which govern the service. Published in 2009, it was part of a ten-year plan to improve quality of care and service for patients in England. Although not primarily concerned with health economics, by specifying rights and responsibilities for the National Institute for Clinical and Social Excellence (NICE) and the Joint Committee on Vaccinations and Immunisations (JCVI), the constitution has given these bodies more legal recognition than hitherto. The NHS Constitution’s guiding principles stated that the NHS should provide a comprehensive service, available to all irrespective of age, gender, disability, race, sexual orientation, religion or belief, respecting their human rights. Access to NHS services was based on clinical need, not an individual’s ability to pay. The NHS Constitution granted patient’s rights including access to treatments, medicines and screening programmes. Specifically, patients were stated to ‘‘have the right to drugs and treatments that have been recommended by NICE for use in the NHS, if their doctor says they are clinically appropriate’’ and ‘‘to receive the vaccinations the JCVI recommends’’. ‘‘The NHS also commits to provide screening programmes as recommended by the UK National Screening Committee’’ [2].
Health Economic Evaluation Health economic evaluation plays a key role in the recommendations of NICE and similar bodies. NICE is charged with: • Producing evidence-based guidance and advice for health, public health and social care practitioners; • Developing quality standards and performance metrics for those providing and commissioning health, public health and social care services;
• Providing a range of information services for commissioners, practitioners and managers across the spectrum of health and social care [3].
Economic evaluation plays a key role in guidance from NICE, specifically in technology appraisal, clinical guidelines and public health. Technology appraisal has to do with individual or closely related technologies. Clinical guidelines cover pathways of treatment which often include the results of particular technology appraisals. Public health deals with more general matters such as obesity. Three other agencies play a similar role to NICE. The National Screening Committee (NSC) advises on screening, the Joint Committee of Vaccinations and Immunizations (JCVI) on vaccinations, the Health Protection Agency (HPA) on a range of matters including infectious diseases, laboratory testing and radiological hazards. Each of these bodies considers cost effectiveness. Economists are employed in most government departments, including the Department of Health where they have played an important role in policy formation, including the establishment of NICE, as well as the development of policies for the pricing of pharmaceuticals [4]. Economists have played key roles in articulating and writing policy documents, including Working for Patients, which in 1991 separated purchasers and providers of services within the NHS (often referred to as the ‘‘internal market’’). Although aspects of these reforms have changed, the split between purchasers and providers has not only been retained but extended by payment mechanisms and other incentives. Around 50 economists are employed as economic advisors in the Department of Health [4]. They are part of the Government Economic Service, a professional body for economists working in government. Economists working in the various departments draw on common methods outlined in the Treasury’s (Finance Department’s) manual ‘‘Appraisal and Evaluation in Central Government’’ [5]. The Department of Health’s policy research programme provides a means for it to commission research to academic groups. A number of policy research centers are funded through this programme which also commissions one-off studies. The Department of Health thus has considerable influence on the role of academic health economics. It has also long funded postgraduate training in health economics.
Health economic evaluation in England As only part of their work has to do with economic evaluation, which generally remains unpublished, economists in the Department of Health are excluded from the discussion that follows.
Remit and history of NICE and similar bodies The National Institute for Health and Care Excellence (NICE) is a non-departmental public body of the Department of Health. The functions of NICE rely on the directions of the Secretary of State for Health: ‘‘Subject to and in accordance with such directions as the Secretary of State may give, the Institute shall perform such functions in connection with the promotion of clinical excellence in the health service as the Secretary of State may direct’’ [6]. NICE, established in 1999, joined with the Health Development Agency to become the new National Institute for Health and Clinical Excellence (still abbreviated as NICE) in 2005. Following the Health and Social Care Act 2012, NICE was renamed the National Institute for Health and Care Excellence in April 2013 reflecting its new responsibilities for social care. NICE was established in part to replace local NHS technology assessment groups making recommendations on new high priced technologies. In particular, the high price and poor cost effectiveness of drugs for multiple sclerosis was a hot issue for these local groups and continued to be a difficult issue for both NICE and the Department of Health. The UK National Screening Committee (NSC) is part of Public Health England, an executive agency of the Department of Health. The NSC advises Ministers about all aspects of screening and supports implementation of screening programmes. Founded in 1996, one of the first tasks of the NSC was to develop a framework for screening. This included the definition and classification of population screening programmes as well as the ethical and social issues involved. The NSC has developed policies on screening for dozens of further conditions and overseen the successful introduction of a number of national screening programmes in England. It assesses the evidence for screening programmes against a set of internationally recognised criteria covering the condition, the test, the treatment options and the effectiveness and acceptability of the screening programme. Its criteria for appraising the viability, effectiveness and appropriateness of a screening programme include cost effectiveness [7]. The JCVI plays a role in relation to vaccination and immunization. Its terms of reference include: ‘‘To advise UK health departments on immunizations for the prevention of infections and/or disease following due consideration of the evidence on the burden of disease, on vaccine safety and efficacy and on the impact and cost effectiveness of immunization strategies’’. [8] Under the implementation of the NHS Constitution: ‘‘upon request of the Secretary of State, the JCVI must make recommendations relating to new provision for vaccination..., that are based on an assessment which demonstrates cost-effectiveness.’’ [8] The Health Protection Agency is since 2013 part of Public Health England. Established in 2003 it combined public health protection against infectious diseases and against chemical and radiological hazards. It provides a scientific secretariat to various advisory committees, part of which
369 Table 1 England (NICE) Guideline for pharmacoeconomic evaluation. Study perspective: For outcomes: all direct health effects whether for patients or other people. For costs: NHS and Personal Social Services (publicly funded). Comparator: normally, established treatment or usual care. To be specified in scope. Analysis technique: cost utility (£/QALY) analysis for the reference case. Time horizon as appropriate ‘‘Long enough to reflect all important differences in costs or outcomes between the technologies being compared.’’ Costing methods: All costs within NHS and personal social services Quality of life methods: QALYs using EQ5D (preferred for adults). Based on patient health states and societal weights. All QALYs equally valued unless intervention meets End of Life criteria. Modelling techniques: these should be transparent and fully documented with justifications for structural assumptions and data inputs. Incremental methods: incremental cost effectiveness ratio Discounting; 3.5% for both costs and benefits (1.5% rate for both costs and benefits may be considered for large long term sustained benefits (normally over 30 years) Sensitivity analysis: probabilistic, scenario, Expert panels (for data parameters): Not specified. For all parameters (including effectiveness, valuation of health-related quality of life and costs) economic evaluation should systematically consider possible data sources, and avoid selection bias in the choice of sources. Source: NICE. Guide to methods of technology appraisal 2013 [11].
includes a health economics and modelling unit charged with evaluating the health and economic impact of interventions to control infectious diseases [9] (Table 1).
Acceptability of economic evaluation No legal or financial obstacles hindered the establishment of health economic evaluation. This reflects in part the culture of the NHS as a tax funded service which, from its foundation, faced economic dilemmas. The imposition of charges for prescriptions in 1952 marked, it has been suggested ‘‘the end of financial innocence [10]. As described above, in recent decades the Department of Health has supported and funded health economics as a discipline. Further, in 1993 the establishment of NHS Research and Development as a directorate within the Department of Health with a target spend of 1.5% of the health budget increased research funding. As research studies generally included economic evaluation, it led to the creation of centres for health economics, usually based in universities. Most of the academic technical support to NICE comes from these centers.
370 Culturally, the language of economics initially clashed with that of medicine but this disharmony has gradually been reduced. Economics has been accepted as playing a role in the separation of purchasing and provision of health services in England, in health research as well as in the considerations of bodies like NICE, NSC and NCVI.
Aims of Health Economic Evaluation The aim of NICE’s technology appraisal programme is to recommend for and against particular health technologies based on their clinical and cost effectiveness. NICE classifies these into four categories: • • • •
recommended optimised only in research not recommended [11].
The recommendation ‘‘Optimised’’ usually means specifying those subgroups within a drugs marketing authorization who might be treated. The recommendation ‘‘Only in Research’’ can be seen as a form of ‘‘Coverage with evidence development’’. NICE’s technology appraisal is complicated by its inability to negotiate prices as that power is reserved for the Pharmaceutical Price Regulation Scheme (PPRS) [12]. Companies however can offer price reductions under the 2009 PPRS through Patient Access Schemes. In effect, a form of price negotiation occurs with companies offering discounts to meet NICE’s cost effectiveness thresholds. 36 Patient Access Schemes are listed by NICE in 2014, almost all involving simple price discounts [13]. The processes used by NICE are clearly specified in its regularly updated guides [14]. The Institute undertakes appraisals of new and established technologies, as formally requested by the Department of Health. The ‘scoping’ process examines the appropriateness of the proposed remit and defines what the appraisal will and will not examine. Scoping thus determines the nature and content of the evidence to be included in the assessment phase of the appraisal. The scope provides a framework for the appraisal. It defines the issues of interest (for example, population, comparators, and health outcome measures) and sets the boundaries for the work undertaken by the independent academic groups and the manufacturer(s) or sponsor(s) of the technology. In 2014, the timeline for single technology appraisals is 19 weeks [15] and for multiple technology appraisals 36 weeks [16]. Multiple technology appraisals, which were the norm until 2006, have been largely replaced by the faster single technology appraisals. Within these timeframes independent academic groups analyse and critique industry submissions to NICE. A key aspect is the reliance on 9 external academic units which provide a technology assessment report for each technology appraisal. Widespread consultation marks each stage of the process, both at scoping and at decision stages with a provisional and final appraisal determination published. The distinction between (scientific) ‘assessment’ of evidence and its ‘appraisal’ (or judgment) is important. Uniquely among similar international agencies is the fact that NICE has an appeal
J. Raftery system. As will be discussed below, these NICE processes have survived repeated legal challenges. The processes are slightly different for NICE’s clinical guidelines, which receive technical support including economic evaluation from four coordinating centers. Economic evaluation plays a role in clinical guidelines similar to technology appraisal. Some clinical guidelines incorporate specific technology appraisals. However, unlike technology appraisals, clinical guidelines are not mandatory on the NHS. The NSC, the JCVI and the HPA also assess the cost effectiveness by using essentially the same approach as NICE. JCVI explicitly employs NICE’s methodology and criteria.
Methods of health economic evaluation The methods used by NICE are specified in its methods guides, which have been updated several times, in 2004 [17], 2008 [18], 2013 [11] and 2014 [19], with the 2014 review dealing with proposed amendments linked to value based pricing (renamed by NICE as ‘‘value based assessment’’). The perspective taken by NICE’s methods has been that of the NHS (including publicly funded personal social services). Cost effectiveness in the form of incremental cost per QALY is required. NICE requires health benefits to be expressed as QALYs as weighted by UK population values. NICE does not officially have a cost effectiveness threshold (or incremental cost effectiveness ratio (ICER), but it has stated: ‘‘Above a most plausible ICER of £20,000 per QALY gained, judgements about the acceptability of the technology as an effective use of NHS resources will specifically take account of the following factors. • The degree of certainty around the ICER. In particular, the Committee will be more cautious about recommending a technology when they are less certain about the ICERs presented. • Whether there are strong reasons to indicate that the assessment of the change in HRQL has been inadequately captured, and may therefore misrepresent the health utility gained. • The innovative nature of the technology, specifically if the innovation adds demonstrable and distinctive benefits of a substantial nature which may not have been adequately captured in the QALY measure. As the ICER of an intervention increases in the £20,000 to £30,000 range, the Committee’s judgement about the acceptability of the technology as an effective use of NHS resources will make explicit reference to the relevant factors listed above. Above a most plausible ICER of £30,000 per QALY gained, the Committee will need to identify an increasingly stronger case for supporting the technology as an effective use of NHS resources, with regard to the factors listed above.’’ [18] Independent analyses initially put the threshold at around £30k [20] and more recently at £40k [21]. The rationale for NICE’s apparent cost per QALY threshold has been subject to much debate. Some have tried to base it on surveys of the public [22], but the results have been variable and appear to depend on how questions are posed. Others
Health economic evaluation in England have argued that the existence of a fixed budget for the NHS implicitly sets the threshold. Attempts to estimate the de facto threshold have put it well below the levels used by NICE at £13k per QALY [23,24]. NICE’s methods deal with uncertainty by requiring probabilistic sensitivity analysis and cost effectiveness acceptability curves. Uncertainty in models is addressed by the academic review teams and NICE’s Decision Support Unit (composed of experts from some of the academic teams). The JCVI explicitly follows NICE’s approach to uncertainty. The NSC and HPA are less explicit about how they require uncertainty to be addressed, but generally use the same approach. Health economic evaluation for NICE is usually performed by independent organisations. For single technology appraisals, company submissions are critiqued by independent Technology Assessment Review teams. These reports are then appraised by appraisal committees which include industry and patient representatives as well as people who work in the NHS and methods experts. NICE’s methods, although closely derived from neo classical welfare economics, differ in ways which have been termed ‘‘extra-welfarist‘‘. The Treasury manual ‘‘Appraisal and Evaluation in Central Government’’ [5], which outlines the principles of cost benefit analysis, is based on conventional welfare economics. This requires where possible costs and benefits to be expressed in monetary terms and discounted to net present value. It does however provide scope for the measurement and valuation of non-monetary outcomes specifically the use of QALYs in health. ‘‘Extra welfarism’’ is a term used to describe how health economic evaluation differs from standard welfare economics. It has been characterised by Brouwer et al. [25,26] as involving four key differences: a) b) c) d)
the outcomes considered relevant, the sources of valuation of the outcome measures, the basis of weighting the relevant outcomes, and interpersonal comparisons.
Adopting, as NICE did, the QALY as the measure of (health) outcome involves a move to extra welfarism as did the valuation of QALYs by the public. Much of the controversy over particular NICE decisions have involved concerns over the extent to which QALYs should reflect factors such as severity if disease or closeness to end of life. The extent to which QALYs should be weighted to reflect such factors has been part of the debate on value based pricing However, other differences may be identified between the methods used by NICE and the Treasury manual, one to do with perspective, the other with discounting. NICE has taken the perspective of the NHS (including publicly funded social services) as opposed to the societal perspective advocated by the Treasury manual. This has also been part of the debate over value based pricing [12]. It suffices to note here that NICE’s proposed way forward by use of ‘‘QALY shortfalls’’ remains extra welfarist [27]. Final decisions on how NICE methods will change await the outcome of a public consultation which ended in June 2014. NICE’s attempt to apply economic evaluation in practice within the context of the tax funded fixed budget for the NHS has thrown up challenges to the methods of economic evaluation. A review
371 of the relevant literature [24] suggested that neo classical welfare economics only dealt with the realities of applying cost benefit analysis to tax funded programmes in a limited and abstract way [28]. The presence of different approaches to discounting emerged in the 2014 controversy of the finding of the JCVI that the meningitis B vaccine Bexsero was not cost effective [29]. While NICE’s technology assessment guidelines require discounting of both costs and benefits at 3.5%, its public health programme uses 1% for each [30]. The Treasury manual advocates 3.5% for periods up to 50 years and lower rates thereafter. NICE initially discounted costs and benefits at 6% and 1.5% respectively but changed this to 3.5% for both in 2004. In 2012, the NICE Technology Assessment guides were amended to allow use of a lower discount rate for benefits ‘‘when the treatment effects are both substantial in restoring health and sustained over a very long period (usually over 30 years)’’. This was criticized as ambiguous, inconsistent and unjustified [31]. The basis of the Treasury guidance on discount rates has also been subject to strong critique [32]. And the conditions under which the same discount rate should be applied to costs and benefits have been shown to be very demanding [32]. The differences between the variants of cost benefit analysis as applied by NICE and similar agencies should not be exaggerated. This is because sensitivity analyses usually explore the effects of different approaches and the decisions made on the basis of these analyses are seldom affected. Perhaps the topic most likely to lead to changes in the results is the discounting of benefits. A change in the discount rate for health benefits would have greatest effect on long term programmes such as vaccination and screening.
Real world impact of health economic evaluation The real world impact of health economic evaluation on NICE is well established. Health economic evaluation has a major influence on technology appraisal committee decisions. Each guidance discusses cost effectiveness, rejecting some technologies purely on that basis. A study of NICE’s technology appraisal committees found: ‘‘attitudes to economic evaluation varied between committee members with some significant disagreement and extraneous factors diluting the health economics analysis available to the committee......Committee members raised concerns about lack of understanding of the economic analysis but felt that a single measure of benefit, e.g. the quality-adjusted life-year, was useful in allowing comparison of disparate health interventions and in providing a benchmark for later decisions.’’ [33] Several early studies [34,35] showed slow take up or implementation of NICE’s guidance on technologies. This led in 2002 to the Department of Health directing local health trusts to fund those technologies (but not clinical guidelines) recommended by NICE. These funding arrangements plus monitoring (both by the NHS and medical charities) and more recently the NHS constitution have almost certainly increased the take up of NICE’s guidance on technologies. The political unacceptability of some of these decisions has led to special funding by the Department of Health for
372 technologies not recommended by NICE. These include the 2002 Multiple Sclerosis Risk Sharing Scheme [36] and the 2010 Cancer Drugs Fund [37] as well as to changes in how NICE quantifies benefits (end of life premium [38,39] and innovation [38]). Economic evaluation also plays a key role in the Patient Access Schemes in that companies sometimes revise their offered price reductions to meet cost effectiveness thresholds. Commenting on NICE, Klein noted that ‘‘overall the record suggested an asymmetry in the use of NICE as an independent arbiter: Ministers will always be tempted to take credit for generosity, even while seeking to avoid blame for parsimony.’’ [10] However, in practice, NICE seldom says ‘‘no’’ on grounds of cost effectiveness. Of the 529 technologies with recommendations listed on the NICE website [40] 16% or 83 were not ‘‘recommended’’. All but 37 of the 83 technologies not recommended were made available later. 36 were available under the Cancer Drugs Fund and other Department of Health initiatives, 10 under later NICE reviews mainly linked to Patient Access Schemes. These changes reduced the ‘‘not recommended’’ rate from 16% to 7%.
Other criteria included in health economic evaluation Other criteria considered by NICE include ethical and social values, in which it is advised by its Citizens Council. The Citizens Council is a panel of 30 members of the public that largely reflect the demographic characteristics of the UK. Councillors are recruited by an independent organisation and serve for up to three years. 17 reports dealing with a wide variety of social and ethical issues have been published by the Council [41], including one on social value judgements [42].
Challenges and obstacles to use of health economic evaluation NICE has largely been successful when its procedures have been in the form of judicial reviews [41,43]. One such judicial review when challenged in the Appeal Court led to minor changes to do with full release of cost effectiveness models. The biggest challenge to NICE was the testing of its powers in a High Court case in 2007, in which those powers were largely affirmed. The High Court found in favor of NICE on five of the six grounds brought against it. NICE’s procedures were deemed fair and its decision making flexible and not irrational. It was judged to have failed on one duty: not offering advice regarding people with learning difficulty or whose English was not the first language. [44,45] All subsequent guidance addresses this duty. Obstacles to NICE achieving its aims include an ongoing debate on the appropriate methods for economic evaluation and their application to topics such as diagnostics and ultra orphan drugs. Reservations include the political unacceptability of some of its decisions, particularly those not recommending drugs of proven clinical efficacy due to their poor cost effectiveness
J. Raftery
Discussion This review has shown that health economic evaluation is embedded in four healthcare agencies, NICE, NSC, JCVI and HPA, covering a wide range of health technologies. The methods have been highly specified, mainly by NICE and developed with leading academic health economists, many of whom serve on NICE committees or in the independent academic centers that provide technology assessments for NICE. To distinguish the methods from neo classical welfare economic, they have been termed extra welfarist. Key differences include valuation of benefits (QALYs) and which costs to include (NHS perspective) and discounting of benefits. The debate over how closely NICE’s methods should align with the Treasury guidance on economic evaluation has underpinned the ongoing development of value based pricing/assessment. The widespread adoption of economic evaluation has not prevented that some decisions were proven to be politically unacceptable. Firstly the drugs for multiple sclerosis and then secondly those for cancer were funded by the Department of Health after having been rejected by NICE on grounds of cost effectiveness. Adjustments were also made to allow NICE to recommend in favour of drugs for patients near the end of life. Patient access schemes have been introduced to allow companies to reduce prices to meet cost effectiveness thresholds. The biggest effect of the use of economic evaluation may have to do with the language that is used to discuss these matters. Such language permeates the briefs of the relevant agencies, committees and discussions in the medical journals. Klein suggested that ‘‘the international language of policy discourse...is heavily accented by economic theory...with a strong American accent’’ [10]. Extra welfarism may have added an English accent. Health economics as a discipline has been thriving for the reasons discussed above. However, when controversy erupts in the popular press over NICE denying of a new high priced drug, health economics tends to be overruled.
Acknowledgements Thanks to Richard Murray, former senior economic advisor in the Department of Health, and to three very thorough reviews by anonymous reviewers.
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373 [20] Devlin N, Parkin D. Does NICE have a cost-effectiveness threshold and what other factors influence its decisions? A binary choice analysis. Health Econ 2004;13(5):437—52. [21] Dakin H, Devlin N, Feng Y, Rice N, ONeil P, Parkin D. The influence of cost effectiveness and other factors on NICE decisions. OHE [online]. 30.04.2014. Available: http://news.ohe. org/2013/04/30/nice-decisions-exploring-the-influence-ofcost-effectiveness-and-other-factors/, accessed: 15.04.2014. [22] Donaldson C, Baker R, Mason H, Jones-Lee M, Lancsar E, Wildman J, et al. The social value of a QALY: raising the bar or barring the raise? BMC Health Serv Res 2011;11:8. [23] Claxton K, Martin S, Soares M, Rice N, Spackman E, Hinde S, et al. Methods for the estimation of the NICE cost effectiveness threshold. CHE Research Paper 81. Revised report following referees’ comments. [online]. 2013. accessed: 13.08.2014. [24] Barnsley P, Towse A, Schaffer SK, Sussex J. Critique of CHE Research Paper 81: Methods for the Estimation of the NICE Cost Effectiveness Threshold. [online]. [25] Brouwer WB, Culyer AJ, van Exel NJ, Rutten FF. Welfarism vs. extra-welfarism. J Health Econ 2008;27(2):325—38. [26] Richard Cookson, Karl Claxton, editors. The Humble Economist: Tony Culyer on Health, Health Care and Social Decision Making. York: University of York Centre for Health Economics; 2012. [27] James R. NICE proposes alternative for value based pricing. James Raftery’s NICE blogs: BMJ Group Blogs. (volume 15.04.2014). URL: http://blogs.bmj.com/bmj/2014/02/25/ james-raftery-nice-proposes-alternative-for-value-basedpricing/ [28] Karl C, Simon W, Steven P, Mark S. Appropriate Perspectives for Health Care Decisions [online]. Jan 2010. (volume 054cherp). Available: http://ideas.repec.org/p/chy/ respap/54cherp.html, accessed: 16.04.2014. [29] Joint Committee on Vaccination and Immunisation. JCVI position statement on use of Bexsero® meningococcal B vaccine in the UK March 2014 [online]. 21.03.2014. Available: https://www.gov.uk/government/uploads/system/uploads/ attachment data/file/294245/JCVI Statement on MenB.pdf, accessed: 25.08.2014. [30] James R. Should the NHS use the new meningitis B vaccine? James Raftery’s NICE blogs: BMJ Group Blog. URL: http://blogs.bmj.com/bmj/2014/03/28/james-rafteryshould-the-nhs-use-the-new-meningitis-b-vaccine/ [31] O’Mahony JF, Paulden M. NICE’s Selective Application of Differential Discounting: Ambiguous, Inconsistent, and Unjustified. Value in Health 2014;17(5):493—6. [32] Paulden M. Some problems with the UK Treasury’s discount rate - discussion paper [online]. March 2010. Available: http:// theta.utoronto.ca/content.php?pid=411861&sid=3717164, accessed: 16.04.2014. [33] Williams I, McIver S, Moore D, Bryan S. The use of economic evaluations in NHS decision-making: a review and empirical investigation. Health Technol Assess 2008;12(7):iii, ix-x, 1-175. [34] Sheldon TA, Cullum N, Dawson D, Lankshear A, Lowson K, Watt I, et al. What’s the evidence that NICE guidance has been implemented? Results from a national evaluation using time series analysis, audit of patients’ notes, and interviews. BMJ 2004;329(7473):999—1003. [35] National Audit Commission. Managing the financial implications of NICE guidance. London: Audit Commission; 2005. Available: http://archive.audit-commission.gov.uk/auditcommission/ SiteCollectionDocuments/AuditCommissionReports/ NationalStudies/ManagingTheFinancialImplicationsOfNice Guidance08Sep05REP.pdf [36] Raftery J. Multiple sclerosis risk sharing scheme: a costly failure. BMJ 2010;340:c1672. [37] Raftery J. NICE and the challenge of cancer drugs. Bmj 2009;338:b67.
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[38] Raftery J. End of life drugs - what premium? James Raftery’s NICE blogs: BMJ Group Blog; 2009. URL: http://blogs.bmj.com/ bmj/2009/02/20/james-raftery-end-of-life-drugs%E2%80% 94what-premium-pt-1/ [39] James R. Bypassing NICE for the sake of innovation? James Raftery’s NICE blogs: BMJ Group Blogs. URL: http://blogs.bmj. com/bmj/2009/08/04/james-raftery-bypassing-nice-for-thesake-of-innovation/ [40] National Institute for Health and Care Excellence. Technology appraisal decisions: full table of recommendations [online]. 2014. Available: https://www.nice.org.uk/News/ NICE-statistics, accessed: 25.08.2014. [41] National Institute for Health and Care Excellence. Citizens Council [online]. 2014. Available: https://www.nice.org.uk/ Get-Involved/Citizens-Council, accessed: 25.08.2014.
[42] National Institute for Health and Clinical Excellence. Social Value Judgements [online]. 06/09/2013. (Principles for the development of NICE guidance; volume 2). Available: http:// www.nice.org.uk/media/C18/30/SVJ2PUBLICATION2008.pdf, accessed: 15/04/2014. [43] Syrett K. Health technology appraisal and the courts: accountability for reasonableness and the judicial model of procedural justice. Health Econ Policy Law 2011;6(4):469—88. [44] Horton R. NICE vindicated in UK’s High Court. Lancet 2007;370(9587):547—8. [45] EISAI Limited, NICE, The Alzheimer’s Society, Shire Pharmaceuticals Limited. Judgment [online]. 10.08.2007. (volume Case No: CO/85/2007). Available: http://www.nice. org.uk/nicemedia/live/11599/44574/44574.pdf, accessed: 16.04.2014.
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SCHWERPUNKT
Health economic evaluation in England Kosten-Nutzen-Bewertung in England James Raftery ∗ University of Southampton, Southampton, United Kingdom Submitted/eingegangen 9 May 2014; revised/überarbeitet 5 August 2014; accepted/akzeptiert 28 August 2014
KEYWORDS Health-economic evaluation; England; reimbursement; decision making
SCHLÜSSELWÖRTER Kosten-NutzenBewertung; England; Erstattung; Entscheidungsfindung
∗
Summary The 2010 National Health Service Constitution for England specified rights and responsibilities, including health economic evaluation for the National Institute for Health and Care Excellence (NICE) and the Joint Committee on Vaccinations and Immunisations. The National Screening Committee and the Health Protection Agency also provide advice to the Government based on health economic evaluation. Each agency largely follows the methods specified by NICE. To distinguish the methods from neoclassical economics they have been termed ‘‘extrawelfarist’’. Key differences include measurement and valuation of both benefits (QALYs) and costs (healthcare related). Policy on discounting has also changed over time and by agency. The debate over having NICE’s methods align more closely with neoclassical economics has been prominent in the ongoing development of ‘‘value based pricing’’. The political unacceptability of some decisions has led to special funding for technologies not recommended by NICE. These include the 2002 Multiple Sclerosis Risk Sharing Scheme and the 2010 Cancer Drugs Fund as well as special arrangements for technologies linked to the end of life and for innovation. Since 2009 Patient Access Schemes have made price reductions possible which sometimes enables drugs to meet NICE’s cost-effectiveness thresholds. As a result, the National Health Service in England has denied few technologies on grounds of cost-effectiveness. Zusammenfassung Mit der Neuverfassung des National Health Service 2010 wurden Rechte und Zuständigkeiten konkretisiert; die Kosten-Nutzen-Bewertung wurde beim National Institute for Clinical and Social Excellence (NICE) und beim Joint Committee on Vaccinations and Immunisations (JCVI) angesiedelt. Das National Screening Committe und die Health Protection Agency können die Regierung auch auf Grundlage von Kosten-Nutzen-Bewertungen beraten. Die Behörden und Einrichtungen richten sich dabei nach den Methoden des NICE. Die gesundheitsökonomischen Methoden des NICE werden allgemein unter dem Begriff des Extrawelfarismus subsumiert, um sie von der neoklassischen Wohlfahrtstheorie abzugrenzen. Im Kern schlägt sich dies in unterschiedlichen Erhebungs- und Bewertungsmethoden des Nutzens
Corresponding author: James Raftery PhD, University of Southampton, Southampton, United Kingdom. Tel.: +442380595646. E-Mail: [email protected]
http://dx.doi.org/10.1016/j.zefq.2014.08.019 1865-9217/
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J. Raftery (QALYs) und der Kosten (Perspektive des NHS) nieder. Zu erwähnen ist außerdem, dass sich die Diskontierung über die Zeit und zwischen den verschiedenen Einrichtungen unterschiedlich entwickelt. Im Zusammenhang mit der Einführung des Value Based Pricing wurde und wird in einer Ende Juni 2014 beendeten öffentlichen Debatte darüber gestritten, ob sich die Methoden des NICE nicht näher an die des britischen Finanzministeriums (UK Treasury) anlehnen sollten. Da man einige Entscheidungen des NICE zu Arzneimitteln als politisch inakzeptabel ansah, wurden besondere Budgets für Interventionen eingeführt, deren Erstattung von NICE abgelehnt wurden. Dazu gehören das Multiple Sclerosis Risk Sharing Scheme (2002) und der Cancer Drugs Fund (2010) sowie besondere Prämien für Interventionen am Ende des Lebens und für Innovationen. Seit 2009 werden über Patient Access Schemes Preissenkungen gefordert, so dass die Schwellenwerte des NICE erreicht werden. Insgesamt muss man sagen, dass der NHS in England auf der Basis von Kosteneffektivität die Erstattung von sehr wenigen Interventionen abgelehnt hat.
Introduction Health economics does not have any legal status in England, reflecting the lack of a formal constitution [1]. The National Health Service (NHS) however has a Constitution [2], which specifies patients’ rights to treatments recommended by the National Institute for Health and Care Excellence (NICE) and similar agencies. The NHS constitution, which applies only to England, lays down the objectives of the National Health Service, the rights and responsibilities of the various parties involved in health care and the guiding principles which govern the service. Published in 2009, it was part of a ten-year plan to improve quality of care and service for patients in England. Although not primarily concerned with health economics, by specifying rights and responsibilities for the National Institute for Clinical and Social Excellence (NICE) and the Joint Committee on Vaccinations and Immunisations (JCVI), the constitution has given these bodies more legal recognition than hitherto. The NHS Constitution’s guiding principles stated that the NHS should provide a comprehensive service, available to all irrespective of age, gender, disability, race, sexual orientation, religion or belief, respecting their human rights. Access to NHS services was based on clinical need, not an individual’s ability to pay. The NHS Constitution granted patient’s rights including access to treatments, medicines and screening programmes. Specifically, patients were stated to ‘‘have the right to drugs and treatments that have been recommended by NICE for use in the NHS, if their doctor says they are clinically appropriate’’ and ‘‘to receive the vaccinations the JCVI recommends’’. ‘‘The NHS also commits to provide screening programmes as recommended by the UK National Screening Committee’’ [2].
Health Economic Evaluation Health economic evaluation plays a key role in the recommendations of NICE and similar bodies. NICE is charged with: • Producing evidence-based guidance and advice for health, public health and social care practitioners; • Developing quality standards and performance metrics for those providing and commissioning health, public health and social care services;
• Providing a range of information services for commissioners, practitioners and managers across the spectrum of health and social care [3].
Economic evaluation plays a key role in guidance from NICE, specifically in technology appraisal, clinical guidelines and public health. Technology appraisal has to do with individual or closely related technologies. Clinical guidelines cover pathways of treatment which often include the results of particular technology appraisals. Public health deals with more general matters such as obesity. Three other agencies play a similar role to NICE. The National Screening Committee (NSC) advises on screening, the Joint Committee of Vaccinations and Immunizations (JCVI) on vaccinations, the Health Protection Agency (HPA) on a range of matters including infectious diseases, laboratory testing and radiological hazards. Each of these bodies considers cost effectiveness. Economists are employed in most government departments, including the Department of Health where they have played an important role in policy formation, including the establishment of NICE, as well as the development of policies for the pricing of pharmaceuticals [4]. Economists have played key roles in articulating and writing policy documents, including Working for Patients, which in 1991 separated purchasers and providers of services within the NHS (often referred to as the ‘‘internal market’’). Although aspects of these reforms have changed, the split between purchasers and providers has not only been retained but extended by payment mechanisms and other incentives. Around 50 economists are employed as economic advisors in the Department of Health [4]. They are part of the Government Economic Service, a professional body for economists working in government. Economists working in the various departments draw on common methods outlined in the Treasury’s (Finance Department’s) manual ‘‘Appraisal and Evaluation in Central Government’’ [5]. The Department of Health’s policy research programme provides a means for it to commission research to academic groups. A number of policy research centers are funded through this programme which also commissions one-off studies. The Department of Health thus has considerable influence on the role of academic health economics. It has also long funded postgraduate training in health economics.
Health economic evaluation in England As only part of their work has to do with economic evaluation, which generally remains unpublished, economists in the Department of Health are excluded from the discussion that follows.
Remit and history of NICE and similar bodies The National Institute for Health and Care Excellence (NICE) is a non-departmental public body of the Department of Health. The functions of NICE rely on the directions of the Secretary of State for Health: ‘‘Subject to and in accordance with such directions as the Secretary of State may give, the Institute shall perform such functions in connection with the promotion of clinical excellence in the health service as the Secretary of State may direct’’ [6]. NICE, established in 1999, joined with the Health Development Agency to become the new National Institute for Health and Clinical Excellence (still abbreviated as NICE) in 2005. Following the Health and Social Care Act 2012, NICE was renamed the National Institute for Health and Care Excellence in April 2013 reflecting its new responsibilities for social care. NICE was established in part to replace local NHS technology assessment groups making recommendations on new high priced technologies. In particular, the high price and poor cost effectiveness of drugs for multiple sclerosis was a hot issue for these local groups and continued to be a difficult issue for both NICE and the Department of Health. The UK National Screening Committee (NSC) is part of Public Health England, an executive agency of the Department of Health. The NSC advises Ministers about all aspects of screening and supports implementation of screening programmes. Founded in 1996, one of the first tasks of the NSC was to develop a framework for screening. This included the definition and classification of population screening programmes as well as the ethical and social issues involved. The NSC has developed policies on screening for dozens of further conditions and overseen the successful introduction of a number of national screening programmes in England. It assesses the evidence for screening programmes against a set of internationally recognised criteria covering the condition, the test, the treatment options and the effectiveness and acceptability of the screening programme. Its criteria for appraising the viability, effectiveness and appropriateness of a screening programme include cost effectiveness [7]. The JCVI plays a role in relation to vaccination and immunization. Its terms of reference include: ‘‘To advise UK health departments on immunizations for the prevention of infections and/or disease following due consideration of the evidence on the burden of disease, on vaccine safety and efficacy and on the impact and cost effectiveness of immunization strategies’’. [8] Under the implementation of the NHS Constitution: ‘‘upon request of the Secretary of State, the JCVI must make recommendations relating to new provision for vaccination..., that are based on an assessment which demonstrates cost-effectiveness.’’ [8] The Health Protection Agency is since 2013 part of Public Health England. Established in 2003 it combined public health protection against infectious diseases and against chemical and radiological hazards. It provides a scientific secretariat to various advisory committees, part of which
369 Table 1 England (NICE) Guideline for pharmacoeconomic evaluation. Study perspective: For outcomes: all direct health effects whether for patients or other people. For costs: NHS and Personal Social Services (publicly funded). Comparator: normally, established treatment or usual care. To be specified in scope. Analysis technique: cost utility (£/QALY) analysis for the reference case. Time horizon as appropriate ‘‘Long enough to reflect all important differences in costs or outcomes between the technologies being compared.’’ Costing methods: All costs within NHS and personal social services Quality of life methods: QALYs using EQ5D (preferred for adults). Based on patient health states and societal weights. All QALYs equally valued unless intervention meets End of Life criteria. Modelling techniques: these should be transparent and fully documented with justifications for structural assumptions and data inputs. Incremental methods: incremental cost effectiveness ratio Discounting; 3.5% for both costs and benefits (1.5% rate for both costs and benefits may be considered for large long term sustained benefits (normally over 30 years) Sensitivity analysis: probabilistic, scenario, Expert panels (for data parameters): Not specified. For all parameters (including effectiveness, valuation of health-related quality of life and costs) economic evaluation should systematically consider possible data sources, and avoid selection bias in the choice of sources. Source: NICE. Guide to methods of technology appraisal 2013 [11].
includes a health economics and modelling unit charged with evaluating the health and economic impact of interventions to control infectious diseases [9] (Table 1).
Acceptability of economic evaluation No legal or financial obstacles hindered the establishment of health economic evaluation. This reflects in part the culture of the NHS as a tax funded service which, from its foundation, faced economic dilemmas. The imposition of charges for prescriptions in 1952 marked, it has been suggested ‘‘the end of financial innocence [10]. As described above, in recent decades the Department of Health has supported and funded health economics as a discipline. Further, in 1993 the establishment of NHS Research and Development as a directorate within the Department of Health with a target spend of 1.5% of the health budget increased research funding. As research studies generally included economic evaluation, it led to the creation of centres for health economics, usually based in universities. Most of the academic technical support to NICE comes from these centers.
370 Culturally, the language of economics initially clashed with that of medicine but this disharmony has gradually been reduced. Economics has been accepted as playing a role in the separation of purchasing and provision of health services in England, in health research as well as in the considerations of bodies like NICE, NSC and NCVI.
Aims of Health Economic Evaluation The aim of NICE’s technology appraisal programme is to recommend for and against particular health technologies based on their clinical and cost effectiveness. NICE classifies these into four categories: • • • •
recommended optimised only in research not recommended [11].
The recommendation ‘‘Optimised’’ usually means specifying those subgroups within a drugs marketing authorization who might be treated. The recommendation ‘‘Only in Research’’ can be seen as a form of ‘‘Coverage with evidence development’’. NICE’s technology appraisal is complicated by its inability to negotiate prices as that power is reserved for the Pharmaceutical Price Regulation Scheme (PPRS) [12]. Companies however can offer price reductions under the 2009 PPRS through Patient Access Schemes. In effect, a form of price negotiation occurs with companies offering discounts to meet NICE’s cost effectiveness thresholds. 36 Patient Access Schemes are listed by NICE in 2014, almost all involving simple price discounts [13]. The processes used by NICE are clearly specified in its regularly updated guides [14]. The Institute undertakes appraisals of new and established technologies, as formally requested by the Department of Health. The ‘scoping’ process examines the appropriateness of the proposed remit and defines what the appraisal will and will not examine. Scoping thus determines the nature and content of the evidence to be included in the assessment phase of the appraisal. The scope provides a framework for the appraisal. It defines the issues of interest (for example, population, comparators, and health outcome measures) and sets the boundaries for the work undertaken by the independent academic groups and the manufacturer(s) or sponsor(s) of the technology. In 2014, the timeline for single technology appraisals is 19 weeks [15] and for multiple technology appraisals 36 weeks [16]. Multiple technology appraisals, which were the norm until 2006, have been largely replaced by the faster single technology appraisals. Within these timeframes independent academic groups analyse and critique industry submissions to NICE. A key aspect is the reliance on 9 external academic units which provide a technology assessment report for each technology appraisal. Widespread consultation marks each stage of the process, both at scoping and at decision stages with a provisional and final appraisal determination published. The distinction between (scientific) ‘assessment’ of evidence and its ‘appraisal’ (or judgment) is important. Uniquely among similar international agencies is the fact that NICE has an appeal
J. Raftery system. As will be discussed below, these NICE processes have survived repeated legal challenges. The processes are slightly different for NICE’s clinical guidelines, which receive technical support including economic evaluation from four coordinating centers. Economic evaluation plays a role in clinical guidelines similar to technology appraisal. Some clinical guidelines incorporate specific technology appraisals. However, unlike technology appraisals, clinical guidelines are not mandatory on the NHS. The NSC, the JCVI and the HPA also assess the cost effectiveness by using essentially the same approach as NICE. JCVI explicitly employs NICE’s methodology and criteria.
Methods of health economic evaluation The methods used by NICE are specified in its methods guides, which have been updated several times, in 2004 [17], 2008 [18], 2013 [11] and 2014 [19], with the 2014 review dealing with proposed amendments linked to value based pricing (renamed by NICE as ‘‘value based assessment’’). The perspective taken by NICE’s methods has been that of the NHS (including publicly funded personal social services). Cost effectiveness in the form of incremental cost per QALY is required. NICE requires health benefits to be expressed as QALYs as weighted by UK population values. NICE does not officially have a cost effectiveness threshold (or incremental cost effectiveness ratio (ICER), but it has stated: ‘‘Above a most plausible ICER of £20,000 per QALY gained, judgements about the acceptability of the technology as an effective use of NHS resources will specifically take account of the following factors. • The degree of certainty around the ICER. In particular, the Committee will be more cautious about recommending a technology when they are less certain about the ICERs presented. • Whether there are strong reasons to indicate that the assessment of the change in HRQL has been inadequately captured, and may therefore misrepresent the health utility gained. • The innovative nature of the technology, specifically if the innovation adds demonstrable and distinctive benefits of a substantial nature which may not have been adequately captured in the QALY measure. As the ICER of an intervention increases in the £20,000 to £30,000 range, the Committee’s judgement about the acceptability of the technology as an effective use of NHS resources will make explicit reference to the relevant factors listed above. Above a most plausible ICER of £30,000 per QALY gained, the Committee will need to identify an increasingly stronger case for supporting the technology as an effective use of NHS resources, with regard to the factors listed above.’’ [18] Independent analyses initially put the threshold at around £30k [20] and more recently at £40k [21]. The rationale for NICE’s apparent cost per QALY threshold has been subject to much debate. Some have tried to base it on surveys of the public [22], but the results have been variable and appear to depend on how questions are posed. Others
Health economic evaluation in England have argued that the existence of a fixed budget for the NHS implicitly sets the threshold. Attempts to estimate the de facto threshold have put it well below the levels used by NICE at £13k per QALY [23,24]. NICE’s methods deal with uncertainty by requiring probabilistic sensitivity analysis and cost effectiveness acceptability curves. Uncertainty in models is addressed by the academic review teams and NICE’s Decision Support Unit (composed of experts from some of the academic teams). The JCVI explicitly follows NICE’s approach to uncertainty. The NSC and HPA are less explicit about how they require uncertainty to be addressed, but generally use the same approach. Health economic evaluation for NICE is usually performed by independent organisations. For single technology appraisals, company submissions are critiqued by independent Technology Assessment Review teams. These reports are then appraised by appraisal committees which include industry and patient representatives as well as people who work in the NHS and methods experts. NICE’s methods, although closely derived from neo classical welfare economics, differ in ways which have been termed ‘‘extra-welfarist‘‘. The Treasury manual ‘‘Appraisal and Evaluation in Central Government’’ [5], which outlines the principles of cost benefit analysis, is based on conventional welfare economics. This requires where possible costs and benefits to be expressed in monetary terms and discounted to net present value. It does however provide scope for the measurement and valuation of non-monetary outcomes specifically the use of QALYs in health. ‘‘Extra welfarism’’ is a term used to describe how health economic evaluation differs from standard welfare economics. It has been characterised by Brouwer et al. [25,26] as involving four key differences: a) b) c) d)
the outcomes considered relevant, the sources of valuation of the outcome measures, the basis of weighting the relevant outcomes, and interpersonal comparisons.
Adopting, as NICE did, the QALY as the measure of (health) outcome involves a move to extra welfarism as did the valuation of QALYs by the public. Much of the controversy over particular NICE decisions have involved concerns over the extent to which QALYs should reflect factors such as severity if disease or closeness to end of life. The extent to which QALYs should be weighted to reflect such factors has been part of the debate on value based pricing However, other differences may be identified between the methods used by NICE and the Treasury manual, one to do with perspective, the other with discounting. NICE has taken the perspective of the NHS (including publicly funded social services) as opposed to the societal perspective advocated by the Treasury manual. This has also been part of the debate over value based pricing [12]. It suffices to note here that NICE’s proposed way forward by use of ‘‘QALY shortfalls’’ remains extra welfarist [27]. Final decisions on how NICE methods will change await the outcome of a public consultation which ended in June 2014. NICE’s attempt to apply economic evaluation in practice within the context of the tax funded fixed budget for the NHS has thrown up challenges to the methods of economic evaluation. A review
371 of the relevant literature [24] suggested that neo classical welfare economics only dealt with the realities of applying cost benefit analysis to tax funded programmes in a limited and abstract way [28]. The presence of different approaches to discounting emerged in the 2014 controversy of the finding of the JCVI that the meningitis B vaccine Bexsero was not cost effective [29]. While NICE’s technology assessment guidelines require discounting of both costs and benefits at 3.5%, its public health programme uses 1% for each [30]. The Treasury manual advocates 3.5% for periods up to 50 years and lower rates thereafter. NICE initially discounted costs and benefits at 6% and 1.5% respectively but changed this to 3.5% for both in 2004. In 2012, the NICE Technology Assessment guides were amended to allow use of a lower discount rate for benefits ‘‘when the treatment effects are both substantial in restoring health and sustained over a very long period (usually over 30 years)’’. This was criticized as ambiguous, inconsistent and unjustified [31]. The basis of the Treasury guidance on discount rates has also been subject to strong critique [32]. And the conditions under which the same discount rate should be applied to costs and benefits have been shown to be very demanding [32]. The differences between the variants of cost benefit analysis as applied by NICE and similar agencies should not be exaggerated. This is because sensitivity analyses usually explore the effects of different approaches and the decisions made on the basis of these analyses are seldom affected. Perhaps the topic most likely to lead to changes in the results is the discounting of benefits. A change in the discount rate for health benefits would have greatest effect on long term programmes such as vaccination and screening.
Real world impact of health economic evaluation The real world impact of health economic evaluation on NICE is well established. Health economic evaluation has a major influence on technology appraisal committee decisions. Each guidance discusses cost effectiveness, rejecting some technologies purely on that basis. A study of NICE’s technology appraisal committees found: ‘‘attitudes to economic evaluation varied between committee members with some significant disagreement and extraneous factors diluting the health economics analysis available to the committee......Committee members raised concerns about lack of understanding of the economic analysis but felt that a single measure of benefit, e.g. the quality-adjusted life-year, was useful in allowing comparison of disparate health interventions and in providing a benchmark for later decisions.’’ [33] Several early studies [34,35] showed slow take up or implementation of NICE’s guidance on technologies. This led in 2002 to the Department of Health directing local health trusts to fund those technologies (but not clinical guidelines) recommended by NICE. These funding arrangements plus monitoring (both by the NHS and medical charities) and more recently the NHS constitution have almost certainly increased the take up of NICE’s guidance on technologies. The political unacceptability of some of these decisions has led to special funding by the Department of Health for
372 technologies not recommended by NICE. These include the 2002 Multiple Sclerosis Risk Sharing Scheme [36] and the 2010 Cancer Drugs Fund [37] as well as to changes in how NICE quantifies benefits (end of life premium [38,39] and innovation [38]). Economic evaluation also plays a key role in the Patient Access Schemes in that companies sometimes revise their offered price reductions to meet cost effectiveness thresholds. Commenting on NICE, Klein noted that ‘‘overall the record suggested an asymmetry in the use of NICE as an independent arbiter: Ministers will always be tempted to take credit for generosity, even while seeking to avoid blame for parsimony.’’ [10] However, in practice, NICE seldom says ‘‘no’’ on grounds of cost effectiveness. Of the 529 technologies with recommendations listed on the NICE website [40] 16% or 83 were not ‘‘recommended’’. All but 37 of the 83 technologies not recommended were made available later. 36 were available under the Cancer Drugs Fund and other Department of Health initiatives, 10 under later NICE reviews mainly linked to Patient Access Schemes. These changes reduced the ‘‘not recommended’’ rate from 16% to 7%.
Other criteria included in health economic evaluation Other criteria considered by NICE include ethical and social values, in which it is advised by its Citizens Council. The Citizens Council is a panel of 30 members of the public that largely reflect the demographic characteristics of the UK. Councillors are recruited by an independent organisation and serve for up to three years. 17 reports dealing with a wide variety of social and ethical issues have been published by the Council [41], including one on social value judgements [42].
Challenges and obstacles to use of health economic evaluation NICE has largely been successful when its procedures have been in the form of judicial reviews [41,43]. One such judicial review when challenged in the Appeal Court led to minor changes to do with full release of cost effectiveness models. The biggest challenge to NICE was the testing of its powers in a High Court case in 2007, in which those powers were largely affirmed. The High Court found in favor of NICE on five of the six grounds brought against it. NICE’s procedures were deemed fair and its decision making flexible and not irrational. It was judged to have failed on one duty: not offering advice regarding people with learning difficulty or whose English was not the first language. [44,45] All subsequent guidance addresses this duty. Obstacles to NICE achieving its aims include an ongoing debate on the appropriate methods for economic evaluation and their application to topics such as diagnostics and ultra orphan drugs. Reservations include the political unacceptability of some of its decisions, particularly those not recommending drugs of proven clinical efficacy due to their poor cost effectiveness
J. Raftery
Discussion This review has shown that health economic evaluation is embedded in four healthcare agencies, NICE, NSC, JCVI and HPA, covering a wide range of health technologies. The methods have been highly specified, mainly by NICE and developed with leading academic health economists, many of whom serve on NICE committees or in the independent academic centers that provide technology assessments for NICE. To distinguish the methods from neo classical welfare economic, they have been termed extra welfarist. Key differences include valuation of benefits (QALYs) and which costs to include (NHS perspective) and discounting of benefits. The debate over how closely NICE’s methods should align with the Treasury guidance on economic evaluation has underpinned the ongoing development of value based pricing/assessment. The widespread adoption of economic evaluation has not prevented that some decisions were proven to be politically unacceptable. Firstly the drugs for multiple sclerosis and then secondly those for cancer were funded by the Department of Health after having been rejected by NICE on grounds of cost effectiveness. Adjustments were also made to allow NICE to recommend in favour of drugs for patients near the end of life. Patient access schemes have been introduced to allow companies to reduce prices to meet cost effectiveness thresholds. The biggest effect of the use of economic evaluation may have to do with the language that is used to discuss these matters. Such language permeates the briefs of the relevant agencies, committees and discussions in the medical journals. Klein suggested that ‘‘the international language of policy discourse...is heavily accented by economic theory...with a strong American accent’’ [10]. Extra welfarism may have added an English accent. Health economics as a discipline has been thriving for the reasons discussed above. However, when controversy erupts in the popular press over NICE denying of a new high priced drug, health economics tends to be overruled.
Acknowledgements Thanks to Richard Murray, former senior economic advisor in the Department of Health, and to three very thorough reviews by anonymous reviewers.
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