Additional value elements should be considered in health technology appraisals to demonstrate the value of medicines to society
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A focus on:
The true value to society of some medicines may be underestimated or misaligned under the current Health Technology Appraisal (HTA) system, leading to sub-optimal allocation of resources.
Our vision:
Regulatory bodies should publish guidance on multi-criteria decision assessment methods for decision makers, alongside when and how to include additional elements that capture societal impacts of medicines to industry.
Looking to the future:
Enhance the current system of valuation with additional elements of value where appropriate.
Robert King
Health Economist
Spend on medicines must be seen to give value for money
The imperative to ensure that money spent on medicines represents good value for money has never been clearer. Healthcare expenditure as a percent of gross domestic product (GDP) peaked during or after 2020 for all the G7 countries as the effects of Covid-19 began to be felt (Figure 1). Much of current health expenditure goes towards the procurement of medicines. In 2020/21, £16.7 billion was spent on medicines in England, over 11% of the entire NHS budget for that financial year.
But currently what defines ‘good value’ for medicines is only considered from the perspective of illness in an ‘average’ individual and ‘average’ costs to the NHS and personal social services. The National Institute for Health and Care Excellence (NICE) employs a utilitarian ethic, based upon the quality adjusted life years (QALY) metric. Ultimately, medicines are reimbursed based on the notion of ‘the greatest good for the greatest number’.
Figure 1: Health care expenditure as a percentage of gross domestic product (GDP) in the G7 countries from 2001-2021
Source: OECD (2022), Health spending (indicator). doi: 10.1787/8643de7e-en (Accessed on 7 September 2022) Note: For Japan and France data available only up until 2020
It is debatable whether the QALY based foundations of how we value medicines do enough to address inequalities, or stray too far from the egalitarian principles upon which the NHS is founded. More widely, we must consider whether valuing medicines according to average health care costs and average health outcomes is truly aligned with their benefit to society particularly in light of the increasing differences in health needs of patients and populations.
The Covid-19 vaccine provides the most accessible example of potential issues with how medicines are valued. The vaccines provided societal benefits far beyond prevention of death or serious illness, as would typically be considered under the status quo: they were key in reducing social distancing measures, such as lockdowns, to enable a re-opening of economies and wider societal impacts.
Valuing the wider benefits of medicines
Incorporating societal benefits into the valuation of medicines is critical and will help to maximise resource allocation in the fairest and most optimal way.
We envision a reimbursement system where decision makers can value medicines holistically according to their direct and indirect impacts on health and wider society. The system would consist of many different ‘elements of value’, which would be context specific, and their inclusion would be dependent on the type of medicine being evaluated in a multi-criteria decision assessment (MCDA) format. The new elements of value will be modular so that they augment existing HTA processes that use NHS costs and QALYs, rather than replace them.
Additional elements of value have been explored by both the Professional Society for Health Economics and Outcomes Research (ISPOR) and the Office of Health Economic (OHE). Examples include the severity of disease that a medicine treats; productivity, or the ability of a person to return to the labour force and transmission value, the value of preventing onward transmission of disease. We can categorise these elements according to their progression through three stages of development, with the final stage being NICE guidance on when and how to use them. Each stage is illustrated in Figure 2 with selected (non-exhaustive) elements of value (see our blog exploring additional elements of value for more information). Our ultimate vision is that all additional value elements reach Stage 3 of Figure 2; where NICE publishes guidance on when and how to use the additional value elements.
Figure 2: Selected additional elements of value (non-exhaustive). Current status (coloured arrows) and vision for future (navy arrows)
Although more research is needed to establish quantitative methods to estimate some of these elements of value, there is reason to believe this is not just a vision for the future, but a vision already being realised. In January 2022, NICE published guidance on including a severity of disease modifier into the HTA process. The severity modifier increases the cost-effectiveness threshold where a medicine treats a particularly severe disease, thus increasing the chance of reimbursement when compared to a medicine that treats a relatively ‘less’ severe disease.
For other elements of value, such as health equity and productivity, there may already be relatively well-established methodology despite NICE not yet providing guidance or recommendation for their use. For example, methods for distributional cost-effectiveness analysis (DCEA), which can show the equitable distribution of costs and health outcomes across geographies or deprivation levels, are well defined. DCEA estimates how the efficiency impact (net health benefit) of a medicine is associated with equity impact (see Figure 3). If a medicine is both cost-effective and improves equity, there is further reason to reimburse the medicine. Multilateral discussion is now required to ensure innovative methods, such as DCEA, are systematically used in the HTA system to help increase health equity.
Figure 3: Equity-efficiency impact plane used in distributed cost-effectiveness analysis
Source: ISPOR Value in Health, Distributional Cost-Effectiveness Analysis Comes of Age, 2020
The additional elements of value in pink in Figure 2 are those that are thought to be useful but without defined methods for quantification. This may be illustrated by insurance value, which was recently considered in the draft guidance for antimicrobial Ceftazidime with avibactam. Insurance value is the value of an intervention in preventing or mitigating the impacts of adverse risk events. In the case of vaccines and antimicrobials, where pandemics and antimicrobial resistance could have catastrophic impacts on society, understanding the insurance value of mitigating such disasters may be important for decision makers. For elements such as these, there is an immediate need to further develop research methodologies.
Calls to action to reflect the true value to society of medicines
We believe that achieving this vision will see critical medicines more closely aligned with their true value to society, with equity being put at the heart of reimbursement decisions. Moreover, societal valuation may also help to act as a supply side incentive to manufacturers to invest in R&D for the most critical medicines.
We propose four actions to help realise our vision:
1. HTA methods must advance beyond current approaches to reflect more holistic evaluations
- This should be representative of both patient need and population health value, acknowledging that different models may be required for different therapeutic areas.
2. Research must quantify broader value elements to specific therapeutic areas, and characterise how such value changes over time and across population groups.
- Industry should take a proactive role in this, exploring additional elements of value demonstrating what type and quality of evidence is possible for regulators.
3. HTA bodies such as NICE should have focussed consultations for identifying additional elements of value.
- Consultations and subsequent roundtables should be multilateral across all stakeholders, including patient bodies.
- Ensure health inequities and methods for addressing them, such as use of DCEA, are at the forefront of any discussions regarding use of additional elements of value. Inclusion of these methods would demonstrate material progress for NICE’s core Principle 9: ‘Aim to reduce health inequalities’.
4. NICE should produce comprehensive guidelines on how and when additional elements should be included under a multi-criteria decision-analysis format.
- Guidance should include recommendations for further methodological research into a given element where appropriate, to ensure targeted focus from the research community.