Dangerous Omissions – the Cost of Ignoring Decision Uncertainty

1. Dangerous Omissions – the Cost of Ignoring Decision Uncertainty Mark Sculpher Susan Griffin Karl Claxton Steve Palmer Centre for Health Economics, University of York,

2. Background • Increasing demands to assess new drugs closer to launch • Inevitable uncertainty in evidence • Hence a series of linked questions • Should a technology be adopted? • How uncertain is this decision? • Is more evidence needed? • But decisions may be fragmented • Need a methods framework to handle these questions

3. What are the decisions? • Should a technology be adopted given existing information? • Which clinical strategies are worthwhile? • For which patient groups? • Is current evidence sufficient to support use in NHS? • Do we need more evidence? • What type of evidence is required? • What additional research should be conducted to provide this evidence?

4. What are the decisions? • Should a technology be adopted given existing information? • Which clinical strategies are worthwhile? • For which patient groups? • Is current evidence sufficient to support use in NHS? • Do we need more evidence? • What type of evidence is required? • What additional research should be conducted to provide this evidence?

5. Additional cost QALYs gained £20,000 2 QALYs ICER = = = 2 – £20,000 £20,000 Is it worthwhile? Is it cost-effective? Is the ICER less than the cost-effectiveness threshold? = £10,000 per QALY If the cost-effectiveness threshold is £20,000 per QALY, B is cost-effective Is net benefit positive? Net health benefit = QALYs gained – QALYs lost = 2 – 1 = 1 QALY Net money benefit = £ value of QALYs gained – additional costs = 2 x £20,000 – £20,000 = £20,000 = 1 QALY

6. 1 3 2 0 4 1 2 3 £15,000 £ 5,000 £10,000 £10,000 £40,000 £30,000 £20,000 £30,000 Additional cost QALYs gained £20,000 2 QALYs ICER = = = 2 – £20,000 £20,000 Should a technology be adopted? = £10,000 per QALY Is the ICER less than the cost-effectiveness threshold? £10,000 per QALY < £20,000 per QALY, B is cost-effective Is net benefit positive? Net health benefit = QALYs gained – QALYs lost = 2 – 1 = 1 QALY Net money benefit = £ value of QALYs gained – additional costs = 2 x £20,000 – £20,000 = £20,000 = 1 QALY

7. What are the decisions? • Should a technology be adopted given existing information? • Which clinical strategies are cost-effective? • For which patient groups? • Is current evidence sufficient to support use in NHS? • Do we need more evidence? • What type of evidence is required? • What additional research should be conducted to provide this evidence?

8. How uncertain is a decision? What’s the best we can do now? But we are not always right Choose B and expect 13 QALYs Chance that B is the best = 3/5 = 0.6 Chance that A is the best = 2/5 = 0.4 Chance that C is the best = 0/5 = 0 So if we adopt B the probability of error = 0.4

9. How uncertain is the decision? Choose A Choose B B A ICER = £25,000 per QALY C

10. Why does uncertainty matter? What’s the best we can do now? Could we do better? Choose B and expect 13 QALYs If we knew we get 13.6 QALYs Maximum benefit of more evidence is 0.6 QALYs But is it worth it?

11. Cost of research Cost of research Do we need more evidence? Choose A Choose B

12. Do we need more evidence?

13. Decisions in a joined up world? • Adopt technologies if we expect them to be cost effective based on existing evidence • But only if we simultaneously address question: Is the evidence sufficient? • Demand or commission further research to inform this choice in the future

14. A fragmented world • Separation of adoption and research decisions • Adoption decisions without accountability for impact on future research • Research decisions without accountability for relevance to adoption decisions • Dangers • Adoption decisions undermine evidence base for practice • Incentives and ethics • Commissioned research does not inform decisions • Adoption becomes the only policy instrument

15. Account for the cost of uncertainty What we loose if we reject a technology What we loose if we accept technology

16. Clear signals and incentives Provide more evidence!

17. Clear signals and incentives Reduce price

18. Why say no (or only in research)? • Clear signals • No because it is not a cost-effective use of resources • No because there is currently insufficient evidence to justify NHS use • Spell out the key evidence needed (not the research) • Clear incentives • If and when additional evidence is made available then considered for early review • Incentives to sponsors (evidence and price) • Incentives for others stakeholders to lobby for publicly funded research • Clear signals to research commissioners

19. Conclusions • All decisions about new technologies involve uncertainty • Is uncertainty being used in decision making? • Need to address adoption decision and need for further research simultaneously • But adoption decision may be only policy lever