Use of the incremental cost-effectiveness ratio for decision-making policies—what is the problem? A perspective paper

ABSTRACT

Introduction

Drug reimbursement decisions that spark public controversy are potential signals that processes used to reach such decisions do not adequately reflect society’s goals. Such controversial decisions appear to be a characteristic of Quality-Adjusted Life Year (QALY)-based Incremental Cost Effectiveness Ratio (ICER)-dominated decision-making systems. QALY-based ICER-heavy systems have several known weaknesses that lead to individual and societal preferences being either ignored or considered in an unsystematic and inconsistent manner.

Areas covered

We reprise some of the key inadequacies of QALY-based ICER analyses and suggest that there are other means including multicriteria decision analysis (MCDA) and cost-benefit analysis based on willingness to pay (WTP) measures by which to partially mitigate these weaknesses.

Expert opinion

For long, the inadequacies of QALY-based ICER-heavy decision-making systems have been rationalized with the answer: ‘while the method is a second best, it is the best we currently have.’ In light of the equally well-developed and widely utilized alternatives available, this resistance to improve assessment processes should not be accepted by policy makers. Health technology assessment bodies should consider and, with appropriate modifications, adopt these alternatives as they have the potential to result in more comprehensive, systematic, and accountable decision-making.

KEYWORDS:

• ICER
• pharmacoeconomics
• cost-effectiveness analysis
• health technology assessment (HTA)
• QALY
• WTP
• MCDA
• drug reimbursement decision-making
• methodological inadequacies
• measuring societal preferences

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Correction

Acknowledgments

Domenico Moro was consulted and provided key inputs and explanations regarding the Discrete Choice Experiment study discussed in this article. He was reimbursed by Certara for these consultations.

Article highlights

• Reimbursement decisions that spark public controversy, as seen in past NICE decisions to reject a range of effective but expensive treatments for rare diseases, are potential signals that the processes used to reach such decisions do not reflect the wider social welfare objectives of society.

• This notion is supported by recent higher-than-expected estimates of societal WTP for treatments for rare childhood dementias in the UK.

• QALY based ICER decision making systems have a number of known weaknesses, particularly in accounting for observed societal preferences (who benefits, the type of benefit, a “fair chance” – to coin short-hand names for but three), to the extent that extra-welfare characteristics are often either ignored or considered in an unsystematic and inconsistent fashion.

• At times, attempts have been made to address these weaknesses – such as through the provision of multiple ICER thresholds in the case of NICE’s Highly Specialised Technology (HST) evaluations for ultra-rare diseases albeit these thresholds appear particularly arbitrary in light of the Office of Health Economics £20k equivalence estimate of £900k for ultra-orphan diseases.

• Nevertheless, in the absence of substantive scope for discretion within existing processes, we suggest there are a range of alternative means (including MCDA and Cost-Benefit Analysis based on WTP measures) by which to mitigate these known weaknesses.

• HTA bodies considering process evolution should consider these approaches, already widely utilised outside of the healthcare system, as they have the potential to result in more comprehensive, systematic and accountable decision making.

Declaration of interest

M Brougham disclosed that Certara Evidence and Access received financial support in the form of Consultancy payments from BioMarin toward the design and implementation of the discrete choice study referenced in this paper and for the provision of medical writing support during the preparation of this manuscript. His independent consultancy received consultancy fees from major manufacturers and many others in consulting activities, including value assessment, advisory boards, and market access studies.

M Schlander declared that his institution (InnoVal^HC) received funding of research projects under an unrestricted educational grant policy for providing consultancy for the present project, and for related projects, by BioMarin and Sanofi/Genzyme. His institution has also received unrestricted educational grants from a number of biopharmaceutical companies, including Biomarin, Sanofi, Amgen, BIT Pharma, Celgene, Galenica, Johnson & Johnson (J&J), Novartis, Novocure, Roche, and Vertex, as well as from government, professional, industy, and payer organizations including BPI, curafutura, FAMH, IQWiG, Interpharma, and santésuisse. He also holds shares in J&J (unchanged since 1999).

H Telser declared that his institution (Polynomics) received consultancy payments from BioMarin for sitting on the expert advisory that accompanied designing and conducting the discrete choice study referenced in this paper.

S Bakshi disclosed that Certara Evidence and Access received financial support in the form of Consultancy payments from BioMarin toward the design and implementation of the discrete choice study referenced in this paper and for the provision of medical writing support during the preparation of this manuscript. Certara Evidence and Access received consultancy fees from major manufacturers and many others in consulting activities, including value assessment, advisory boards, and market access studies.

O Sola-Morales declared the receipt of payments from BioMarin related to attendance at meetings during the execution of the study referenced in this manuscript and for other purposes not directly related to this matter, which, however, could be considered as potentially influential.

Writing support and editorial assistance for the development of this manuscript, provided by M Brougham, were funded by BioMarin. The views and opinions expressed in this article are those of the authors and not those of the sponsor.

The authors have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.

Reviewer disclosures

Peer reviewers of this manuscript have no relevant financial or other relationships to disclose.

Additional information

Funding

The discrete choice study described in this manuscript was sponsored by BioMarin Pharmaceutical Inc. The funding for writing this paper was provided by Biomarin. M Brougham and S Bakshi represent Certara, which is a scientific consultancy that received consultancy fees from most major pharmaceutical and biotech companies.