Overview of Health Science Policy Council Activities

1. Overview of Health Science Policy Council Activities May 16, 2005

2. OBJECTIVES • Describe Mission and Membership • Discuss Structure and Activities • Present Outcomes for 2005

3. OBJECTIVES • Describe Mission and Membership

4. MISSION To advise the Society on important science, research and policy issues in pharmacoeconomics and outcomes research

5. Jon Clouse Peter Davey Michael Drummond Robert Epstein Jean Paul Gagnon* Bryan Luce Eva Lydick Joel Hay William McGhan Donald Patrick Jim Smeeding Sean Sullivan George Torrance Milton Weinstein Marilyn Dix-Smith ISPOR Scribe - Daniel Klim *Chairman MEMBERSHIP

6. OBJECTIVES • Describe Mission and Membership • Discuss Structure and Activities

7. STRUCTURE • Council members identify and freely discuss wide ranging issues at bi monthly meetings (Think Tank approach) • One month after meeting, lead constructs a draft brief following approved format • After Council discussion at next meeting second draft constructed • Final approval by Council and referral to Board for discussion and action • Lead turns brief into Board action plan • Two weeks before meeting new issues submitted to Committee Scribe

8. COUNCIL FORMAT FOR TWO PAGE BRIEF ON ISSUE • TITLE • DESCRIPTION • ANALYSIS • ALTERNATIVE RESPONSES • RECOMMENDED ACTION

9. BOARD FORMAT FOR APPROVED ISSUE • DEFINE ISSUE • DESCRIBE SPECIFIC TASKS AND/OR PRODUCTS OF ACTION PLAN • PRIORITIZE THE INITIATIVES’ WORK ACTIVITIES FOR CURRENT YEAR • PROVIDE CLARITY FOR OPERATIONALIZING THE WORK ACTIVITIES, E.G., ORGANIZATION, TIMELINES, AND SUGGESTED WORK GROUP MEMBERS

10. ACTIVITIES • MEET EVERY TWO MONTHS • HELD SIX MEETINGS IN 2004/2005 • DISCUSS CURRENT ISSUES • SURFACE NEW ISSUES AND GAUGE REACTION • REVIEW BOARD COMMENTS AND DISCUSS ACTION PLAN • OPTIONAL – LEAD OR OTHER COUNCIL MEMBERS PARTICIPATE IN IMPLEMENTATION OF ISSUE ACTION PLAN • PRODUCED SIX ISSUES FOR BOARD

11. OBJECTIVES • Describe Mission and Membership • Discuss Structure and Activities • Present Outcomes for 2005

12. POLICY ISSUES • BOARD APPROVED • BRIDGING THE HEALTH MEASUREMENT GAP: MISSION IMPOSSIBLE: • Lead – George Torrance - • ROLE OF OUTCOMES RESEARCH IN EVIDENCE-BASED HEALTH CARE DECISION-MAKING: • Lead – Bryan Luce, Founder & Senior Research Leader, the MEDTAP Institute at UBC • CONTINUOUS QUALITY IMPROVEMENT FOR COST EFFECTIVE HEALTH CARE RESEARCH AND GLOBAL POLICY: • Leads – Bill McGhan, Professor, University of the Sciences

13. POLICY ISSUES • BOARD APPROVED • DEVELOPING STANDARDS FOR DRUG COSTS IN PHARMACOECONOMIC STUDIES: • Lead – Michael Drummond, Director, University of York, Centre for Health Economics, Heslington, York • TRANSFERABILITY OF ECONOMIC DATA: WHEN DOES A DIFFERENCE MAKE A DIFFERENCE • Lead – Michael Drummond, Director, University of York, Centre for Health Economics, Heslington, York, Jim Smeeding, President JestaRx Group • COUNCIL DISCUSSION • ACCELRATING USE OF COST EFFECTIVENESS AND OUTCOMES DATA BY HEALTH CARE DECISION MAKERS • Leads – Rob Epstein, Vice President of Medical Affairs, Medco, John Clouse, Director, Pharmacoeconomic Evaluations, United Health Care, Jean Paul Gagnon, Director Public Policy, Sanofi-Aventis Pharmaceuticals

14. NEW ISSUES • Anyone can submit issue to Science Policy Council for development and discussion • Members are open to ideas • Each issue will be discussed and debated • Issue author will be recognized and informed of issue status • Send issues to Jean Paul Gagnon at jean.gagnon@aventis.com

15. Bridging the Health Measurement Gap: Mission Impossible? Donald Patrick, University of Washington Eva Lydick, New Mexico George Torrance, McMaster University, Innovus Research Inc., and Health Utilities Inc.

16. The Issue • There is no standard measurement of health • Different agencies use different methods • WHO, Statistical Agencies, NICE, etc. • QALYs are not necessarily comparable • SG, TTO, VAS • Public, Patients • EQ5D, HUI, QWB, etc. • Should ISPOR propose a “reference case” method?

17. Analysis • Is lack of comparability across studies a problem? • Reference case does not preclude other methods • How broadly to define the problem? • QALY • QALY, WTP • QALY, WTP, HRQOL, PRO

18. Tentative Recommendations • ISPOR should take this on • Organize a special workshop(s), consensus, publish • Maintain and update over time

19. Where Does Outcomes Research fit into Evidence-Based Health Care Decision-Making? Bryan Luce

20. Selected Organizations Using EBM • BCBS’s Technology Evaluation Center • US Preventive Services Task Force • Clinical Practice Guidelines • CMS Medicare Coverage Advisory Committee (MCAC) • AHRQ’s Evidence-Based Practice Centers

21. Organizations Using EBM (Cont.) • UK’s National Institute for Clinical Excellence (NICE) • AMCP’s Format for Formulary Submission • Multiple MCOs • OHSU Drug Effectiveness Review Project • 13 Medicaid Agencies • Consumers’ Union BestBuyDrugs website • AARP’s ResearchRx website

22. Organizations Using EBM (Cont.) • CMS’s MMA: Comparative Effectiveness • CMS Interim Coverage: PCT/Registries • Institute of Medicine: EBM/Comparative Effectiveness Private-Public Initiative

23. EBG in Practice: Three Groups • The “efficacy” group • The “effectiveness” group • The “cost-effectiveness” group

24. The EBG “Efficacy” Group • Mantra is “minimize bias” • Opt for maximizing internal validity of studies at expense of generalizability • Examples of organizations: • Cochrane Collaboration • OHSU’s Drug Effectiveness Review Project • Medicaid agencies (?), Consumers Union, AARP

25. The EBG “Effectiveness” Group • Mantra: “Is it effective in the real world?” • Opt for generalizability to populations and clinical settings of interest (incl non-experimental evidence) • Examples of organizations: • CMS (MCAC, MMA, PCT/Registry Interim Coverage Policy) • AHRQ’s EPCs • BCBS TEC • Clinical Practice Guidelines • IOM’s Effectiveness Initiative

26. The EBG Cost-Effectiveness Group • Mantra is “real world effectiveness and real world value for money” • Opt for generalizability often over long haul and accuracy over precision • Examples of organizations: • Academy of Managed Care Pharmacy • U.K.’s National Institute for Clinical Excellence (NICE) • AHRQ’s EPCs

27. Specific Tasks: • 1. Recruit a senior advisory panel to consist of both traditional clinical EBM experts (e.g. Cochrane participants) and HEOR researchers to recommend the objective to be achieved, to help define the problem and approach and to oversee the work plan and work products

28. Review, describe and report on existing EBM applications by key organizations in US and the rest of the westernized world • Review and report on the EBM methods literature including how various parties define the of the words “evidence-based medicine”, “best evidence”, “systematic review” with the intention of defining these words for different contexts.

29. 4. Develop a consensus for the definitions of words and phrases above 5. Review and report on methods for combining disparate sets of evidence that include RCT evidence and outcomes evidence

30. 6. Convene a 2 day workshop of key opinion leaders who have different concepts of the EBM application and charge the group with engaging the issues and developing a consensus concerning the role that HEOR (including observational data, modeling, patient-reported outcomes, including patient preference) should play in different applications of EBM and the methodological and reporting solutions.

31. ISPOR Health Science Policy Council Continuous Quality Improvement for Cost-Effective HealthCare Research and Global Policy Presenter: William McGhan, PharmD, PhD University of the Sciences Philadelphia, Pennsylvania USA

32. Issue Description • While most ISPOR members and practitioners are able to follow major economic indicators and the release of major economic papers, it has been suggested that a process be developed whereby ISPOR would systematically report on trends in the overall quality of cost-effectiveness studies and global policy.

33. Issue Description (cont’d) • Recommendations and reports from ISPOR would be intended to advance international health care efficiency and quality and become a mainstay of our global effort to improve the economic and quality-of-life research and practice in various health care sectors.

34. Analyzing the Options • Reports should be continually fostered inside and outside ISPOR that quantify the adequacy in the quality of publications and regional CEA analyses. • ISPOR needs to monitor what qualitative, quantitative and statistical methods require modification, improvement or further development. • It is important to monitor the quality of CEA guidelines being used by various journals, organizations and nations for analyzing new therapies and allocation of resources. • Educational materials and forums need to be provided to improve CEA quality.

35. Options for Action • Commission a white paper on the state of CEA science & policy. • Generate report card system on the overall state of CEA science and practice. • Issue periodic assessment reports on the overall quality of papers, abstracts, journal guidelines, government guidelines. • Examine ISPOR awards program to assure that excellent reports and research advances are recognized and encouraged (ranging from researchers, policy makers, to clinical practitioners?). • Organize a special workshop on the topic bringing together representatives of the various stakeholders (e.g., Statistical Agencies, technology assessors, health economists, clinical researchers, health policy researchers, payers and regulators). Publish the results. • Organize a special session on the topic at an upcoming ISPOR annual meeting. • In relationship to improving economic modeling and transparency, it has been suggested that ISPOR become an online repository for published and “reference case” CEA models and perhaps databases for which print journals have inadequate space.

36. Research Practices · ISPOR Research Initiatives - ISPOR Health Science Initiatives - ISPOR Quality of Life Initiatives - Pharmacoeconomic Guidelines · ISPOR Good Research Practices - ISPOR Code of Ethics - Modeling Studies - Retrospective Database Studies - CEA with Clinical Trials - Real World Data Task Force - Budget Impact Analysis Task Force Research & Communication Issues · General Pharmacoeconomics Research and Use Issues · Quality of Life Regulatory Issues · Health Science Research Use Issues/General · Use of Research in Decision Making · ISPOR Communications Task Force · ISPOR Abstract Quality Assurance Task Force A List of ISPOR Initiatives:How Well Are These Linked to Overall Continuous Improvement?

37. * p<0.1 ** p<0.05 N = 305 N = 228 Changes in CEA Report Quality Over Time Source: P. Neumann, N..V. Olchanski; A.B. Rosen; D. Greenberg; R. Chapman; P.W. Stone; J. Nadai. ARE PUBLISHED COST-UTILITY ANALYSES IMPROVING? (Poster) ISPOR: Arlington, VA, May 18-21, 2003.

38. CONTENT ANALYSIS ISPOR ABSTRACTS Source: 1. Smith MD and McGhan WF. ISPOR 10th International Meeting(Poster) Washington, DC. May 15-18, 2005. 2. www.ispor.org/research_study_digest/index.asp (N=4605 abstracts)

39. CEA / CUAPRO / QOL Outcomes CONTINUOUS QUALITY IMPROVEMENT EconomicsPRO/QOL Outcomes McGhan WF and Briesacher B. Implementing Pharmacoeconomic Outcomes Management. PharmacoEconomics. Vol 6 (5): 412-416.

40. REFERENCES Reed SD et al. Conducting economic evaluations alongside multinational clinical trials: Toward a research consensus. American Heart Journal. March 2005;149:434-43. Neumann PJ, Stone PW, Chapman RH, Sandberg EA, Bell CM. The Quality of Reporting in Published Cost-Utility Analyses, 1976-1997. Annals of Internal Medicine. 2000; 132(12):964-72. Neumann PJ, Greenberg D, Olchanski NV, Stone PW, Rosen AB. Growth and quality of the cost-utility literature, 1976-2001. Value in Health. 2005;8(1):3-9. Rosen AB, Greenberg D, Stone PW, Olchanski NV, Neumann PJ. Quality of Abstracts of Papers Reporting Original Cost-Effectiveness Analyses. Medical Decision Making. In press. Neumann PJ, Greenberg D, Olchanski NV, Stone PW, Rosen AB. Growth and quality of the cost-utility literature, 1976-2001. Value in Health. 2005;8(1):3-9. Neumann PJ, Stone PW, Chapman RH, Sandberg EA, Bell CM. The Quality of Reporting in Published Cost-Utility Analyses, 1976-1997. Annals of Internal Medicine. 2000; 132(12):964-72. Rosen AB, Greenberg D, Olchanski NV, Chapman RH, Neumann PJ. Reporting of Key Data in Abstracts of Cost-Utility Analyses. Abstract SMDM, Chicago, IL, October 19-22, 2003. McGhan WF and Briesacher B. Implementing Pharmacoeconomic Outcomes Management. PharmacoEconomics. Vol 6 (5): 412-416, 1994.

41. TRANSFERABILITY OF ECONOMIC DATA:WHEN DOES A DIFFERENCEMAKE A DIFFERENCE? Michael Drummond Centre for Health Economics University of York United Kingdom

42. OUTLINE OF THE ISSUES • Several factors, varying from location to location, are thought to limit the transferability (generalisability) of economic data. • These factors include differences in relative prices, practice patterns, availability of healthcare resources, community values for health states.

43. OUTLINE OF THE ISSUES(Continued) • Existing guidelines for economic evaluation (formal and voluntary) take differing positions on the relevance and admissibility of data from outside the country of interest. • Too much flexibility could lead to misleading cost-effectiveness estimates; too much restriction could lead to unnecessary duplication of research.

44. OUTLINE OF THE ISSUES(Continued) • A recent review of economic evaluations of drugs conducted in Western Europe has shown that: • there are variations in cost-effectiveness from country to country; • the differences are not systematic; • they depend on the methods employed by the analyst; • the implications of these variations for decision-making are not clear. Barbieri et al. Value in Health 2005; 8(1): 10-23.

45. ISPOR’s PLANS • To tackle the following issues: • Which elements of economic data vary most from setting to setting? • Given the known variability, what would be reasonable guidelines for accepting (or not accepting) data from outside the country of interest?

46. ISPOR’s PLANS (Continued) • Review existing national guidelines to extract more detail on transferability recommendations. • Analyse the studies in the Barbieri et al review in more detail, to identify more precisely the variation (from place to place) in the key parameters. • Organise an issues panel at a future meeting, involving researchers and decision-makers, to discuss these findings.

47. DEVELOPING STANDARDS FOR DRUG COSTS IN PHARMACOECONOMIC STUDIES Michael Drummond University of York Jim Smeeding University of Texas & JestaRx Group

48. OUTLINE OF THE ISSUES • Drug costs (of the study drug and comparator) are major cost drivers in pharmacoeconomic studies. • The cost of the drug regimen involves not only the price but also the impact of wholesale discounts, pharmacy on-costs and assumptions about wastage. • In the USA, the Center for Medicare and Medicaid Services (CMS) is proposing to base reimbursement on Average Sales Price (ASP).

49. OUTLINE OF THE ISSUES (Continued) • Until recently most cost studies in the USA have quoted Average Wholesale Price. ASP factors in discounts and rebates. • In addition, there is a growing theoretical literature, often linked to discussions about patent protection, that suggests that the market prices for drugs are not good approximations to the social opportunity costs.

50. JANUARY 1, 2005 – ASP PLUS 6% • Policy: - Average Sales Price plus 6% (ASP plus 6%) shall apply to payment(s) for drugs and biologicals (under Medicare Part B – HCPCS) that are furnished on or after January 1, 2005. • No Grace Period