A comparison of technology coverage decisions in the US and the UK: seeing the NICE side of cost-effectiveness analysis

1. A comparison of technology coverage decisions in the US and the UK:seeing the NICE side of cost-effectiveness analysis Stirling Bryan, PhD Harkness Fellow in Health Care Policy 2005/6 Visiting Faculty, Center for Health Policy, Stanford Professor of Health Economics, Birmingham, UK

2. Overview • The technology coverage issue • The UK position and the National Institute for Health & Clinical Excellence (NICE) • Some research findings on the use of cost-effectiveness analysis (CEA) in coverage decisions in the UK • My understanding of the US position (or my misconceptions after 2 days!) • Some research questions (for my Harkness project)

3. Technology coverage • What is it? • a decision not to ‘cover’ a technology indicates that its cost will not be reimbursed as part of the insurance package • it involves setting limits on the health care services that can be accessed or provided • Who makes coverage decisions? • private health plans and government health insurance programs both make coverage decisions

4. Coverage decisions in the UK • Local level – wide variety of primary and secondary care decision-making bodies • National level – National Institute for Health & Clinical Excellence (NICE) • one of its functions is to appraise new and existing health technologies • coverage decisions based on explicit criteria and are informed by an independent assessment of evidence, including an economic evaluation • submissions also received from the sponsor of the technology, and other expert bodies

5. Industry submissions Horizon Scanning Long-list of technologies National guidance Prioritisation NICE Appraisals Committee Short-list of topics Patient & professional input Review and economic analysis Academic HTA team

6. Examples of guidance “Donepezil, rivastigmine and galantamine are not recommended for use in the treatment of mild to moderate Alzheimer’s disease (AD).” “Riluzole is recommended for the treatment of individuals with the amyotrophic lateral sclerosis (ALS) form of Motor Neurone Disease (MND).”

7. Area of expertise Number of Committee members Medical (e.g. GP, physician, surgeon) 12 (43%) Other clinical (e.g. nurse, pharmacist) 4 (14%) Methodologists (e.g. health economist, statistician) 5 (18%) Managers 3 (11%) Patient ‘advocate’ 2 (7%) Manufacturer ‘representative’ 2 (7%) NICE Appraisal Committee membership (n=28)

8. The drug itself has no side effects … but the number of health economists needed to prove its value may cause dizziness and nausea

9. UK-based research • Research questions • To what extent, and in what ways, is cost-effectiveness information used in coverage decision-making in the UK? • How might the impact of CEAs be increased, particularly in relation to issues of accessibility and acceptability?

10. Research methods: NICE case study • Background interviews with members of NICE appraisals team • Focus on 7 technology appraisals • Documentary analysis • Observation of committee meetings • Interviews with selected members of Committee • Additional, non-technology specific interviews with Committee members

11. Area of expertise Number of Committee members interviewed Medical (e.g. GP, physician, surgeon) 13 (46%) Other clinical (e.g. nurse, pharmacist) 3 (11%) Methodologists (e.g. health economist, statistician) 6 (21%) Managers 2 (7%) Patient ‘advocate’ 3 (11%) Manufacturer ‘representative’ 1 (4%) The AC interview sample (n=28)

12. The ‘importance’ of the economic analysis People have come to accept that the economic evaluation is more crucial than they thought. I think a lot of them came along two years ago with the idea that … you had to listen to the economist say something. … they’ve moved to saying ‘this is all so complicated, just tell us what the ICER is!’ because they’ve actually realised that it is a crucial issue.

13. Appraisal Committee composition Roles of Committee members Political The ‘workings’ of the Committee Conceptual challenges Concepts & processes Information processing Committee procedures QALYs Equity concerns Practical issues relating to economic analyses Practical

14. Appraisal Committee composition Roles of Committee members Political The ‘workings’ of the Committee Conceptual challenges Concepts & processes Information processing Committee procedures QALYs Equity concerns Practical issues relating to economic analyses Practical

15. Information processing (1) • Ordinal approach to considering the evidence (i.e. ‘effectiveness’ then ‘CE’): My first consideration when I look at this is ‘does this treatment actually work?’ … obviously it has to be clinically effective in order to be cost-effective I don’t believe effectiveness should be a criterion for NICE decisions. Now that’s a fundamental conceptual problem with NICE that they require clinical effectiveness before we go on to examine cost effectiveness.

16. Information processing (2) Difference in cost NE NW Difference in effectiveness SW SE

17. Committee procedures • The threshold: There is a feeling when we get beyond £30,000 per QALY we’re running into trouble. I do sometimes have reservations about the figure of £30,000 per QALY. Where does the figure come from? Who determines where the cut-off point should be? … This magic figure of £30,000 keeps popping up but I lack the underlying knowledge to be able to challenge. My biggest criticism … is basically we are funding things at a level that actually the NHS cannot fund – that the [cost per] QALY figure is far too high, it should be much lower.

18. Appraisal Committee composition Roles of Committee members Political The ‘workings’ of the Committee Conceptual challenges Concepts & processes Information processing Committee procedures QALYs Equity concerns Practical issues relating to economic analyses Practical

19. Conceptual challenge: equity • No strong evidence currently on which to base equity weighting: I think there’s a sort of recognition at the moment, that we have no basis for doing the weighting. • Some implicit weighting is being done: At the end of each of these discussions people say, ‘well we have no basis for doing this so let’s just treat a QALY as a QALY regardless’. But where that isn’t true, I think, is in relation to children … although people don’t necessarily explicitly state it, I think everybody tends to give it more weight.

20. Appraisal Committee composition Roles of Committee members Political The ‘workings’ of the Committee Conceptual challenges Concepts & processes Information processing Committee procedures QALYs Equity concerns Practical issues relating to economic analyses Practical

21. Practical issues • Understanding of the economic evaluation by Committee members: Some are probably not all that clear as to how it is done … I think there are certainly a number who probably don’t understand a word of what is going on in the health economics bit. … and some people do keep very quiet when the health economics is being talked about and that’s very noticeable. There’s a fuzzy belief that people do understand cost-effectiveness, because it is so important we all understand it, but the actual principles and so on are not well understood.

22. Appraisal Committee composition Roles of Committee members Political The ‘workings’ of the Committee Conceptual challenges Concepts & processes Information processing Committee procedures QALYs Equity concerns Practical issues relating to economic analyses Practical

23. The US, coverage and CEA “Coverage policy is tightly linked to the affordability of health insurance, and hence the rate of uninsurance … [and] also influences the types of medical care Americans receive. Absent from these [health care reform] debates is any systematic discussion of processes to choose the medical goods and services that health insurance should cover.” Garber (2004, p284) “We currently lack a consensus on principles that would tell us how to distribute health care fairly.” Daniels and Sabin (2002, p3)

24. Medicare coverage “One of the most difficult policy issues confronted in any decision on coverage criteria is the role of cost-effectiveness analysis in deciding what is to be considered reasonable and necessary.” Tunis (2004, p2197) “To Medicare, CEA has been an elephant in the living room, officially ignored despite its obvious importance.” Neumann (2005, p148)

25. A hopeful future? “After a decade of failed attempts to integrate CEA as a criterion for coverage, prospects for its ultimate adoption … appear dim. These attempts have revealed the strength of antagonism in the US towards openly confronting resource constraints. If Medicare officials – and politicians – learned anything from the experience, it was the political folly of trying to ration honestly.” Neumann (2005, p149)

26. Harkness project • Central research questions • What principles and processes underlie coverage decisions in the US, what use is made of information on the cost-effectiveness of health technologies and, if use is limited, why is this the case? • Objectives • In the main agencies concerned with the finance and delivery of health care in the US, to describe the principles underlying coverage policy and the processes employed • For selected recent coverage decisions, to explore the ‘impact’ of using a CE criterion • To elicit the views of stakeholders (including the general public) on coverage policy principles and processes, and specifically the use of CE criterion