Balancing cost-effectiveness with other

values: the NICE experience

Stirling Bryan

Department of Health Economics

Overview

Introduction to the National Institute for Health & Clinical Excellence (NICE)

Cost-effectiveness analysis as a key driver of NICE decisions

The NICE equity and social value principles

The United Kingdom

NICE Programmes

Technology appraisals– Criteria include both clinical and cost effectiveness

Clinical guidelines– Criteria include both clinical and cost effectiveness

Public health guidance– Criteria include both effectiveness and cost effectiveness

Interventional procedures– Guidance on safety and efficacy

Technology ‘coverage’ decisions in England

Local level – main budget holders are the PCTs but wide variety of decision-making bodies

National level – NICE– coverage decisions based on explicit criteria,

informed by evidence review and economic evaluation

– submissions received from independent academic team, the sponsor of the technology, and other expert bodies

SubmissionsSubmissions

11stst Committee meeting Committee meeting preliminary preliminary

recommendationsrecommendations

PublicationPublication

22stst Committee meeting Committee meeting final guidancefinal guidance

Consultation Consultation on preliminary on preliminary recommendationsrecommendations

AppealAppeal (or not)(or not)

ReferralReferral

[14 months]

AssessmentAssessmentConsultationConsultationon evidenceon evidence

Review

14 weeks

13 weeks

4 weeks

4 weeks

NICE Appraisal Committee membership (n=28)

Area of expertise Number of Committee members (per branch)

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 ‘reference case’ for CEAElement of health technology assessment

Reference case

Comparator Alternative therapies routinely used in the NHS

Perspective on costs Perspective on outcomes Type of economics evaluation Synthesis of evidence on outcomes Measure of health benefits Description of health states for calculation of QALYs

NHS and PSS All health effects on individuals Cost-effectiveness analysis Based on a systematic review Quality-adjusted life-years (QALYs) Health states described using a standardised and validated generic instrument

Example CEA: anakinra for RA

Results Cost QALYs With Anakinra £14,523 3.840 Without Anakinra £2,841 3.729 Difference £11,682 0.111 ICER (cost per quality-adjusted life-year)

£105,000

Guidance: “Anakinra should not normally be used as a treatment for rheumatoid arthritis. It should only be given to people who are taking part in a study on how well it works in the long term.”

The importance of CEA at NICE

Secretary of State’s Direction to NICE:– NICE should consider … “The broad balance of clinical

benefits and costs”

Bryan et al (2007):– “I think economic evaluation was regarded as being

important from day one.”– “It [the CEA] seems to me to be the clincher really. If it’s too

high then it’s not going to get funded.”

NICE social value principle 2:– NICE “must take into account the relative costs and benefits

of interventions (their 'cost effectiveness') when deciding whether or not to recommend them.”

The drug itself has no side effects … but the number of health economists needed to prove its

value may cause dizziness and nausea

The US and this debate …

Britain Stirs Outcry by Weighing Benefits of Drugs Versus Price

Millions of patients around the world have taken drugs introduced over the past decade to delay the worsening of Alzheimer's disease. …

But this year, an arm of Britain's government health-care system, relying on some economists' number-crunching, said the benefit isn't worth the cost. It issued a preliminary ruling calling on doctors to stop prescribing the drugs.

THE WALL STREET JOURNAL November 22, 2005; Page A1

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?

My biggest criticism … is basically we are funding things at a level that actually the NHS cannot afford – that the [cost per] QALY figure is far too high, it should be much lower.

Bryan et al (2007)

Birch & Gafni (2007) ‘Economists’ dream or nightmare?’ HEPL

“The efficiency of adopting the new intervention depends crucially on where the additional resources required to support the new intervention are to be taken from and at what opportunity cost.”

NICE and procedural justice

Framework: 'accountability for reasonableness‘ (Daniels & Sabin, 2002)

– Publicity– Relevance– Challenge and revision– Regulation

NICE ‘reference case’ and distributive justice

Element of health technology assessment

Reference case

Method of preference elicitation for health state valuation Source of preference data Discount rate Equity position

Choice-based method (for example, time trade-off; standard gamble, not rating scale) Representative sample of the public An annual rate of 3.5% on both costs and health effects An additional QALY has the same weight regardless of the other characteristics of the individuals receiving the health benefit

NICE’s social value principles

Principle 3– Decisions about whether to recommend interventions should

not be based on evidence of their relative costs and benefits alone. NICE must consider other factors when developing its guidance, including the need to distribute health resources in the fairest way within society as a whole.

Principle 4– If NICE decides not to recommend use of an intervention

with a cost per QALY gained within or below the range £20,000 to £30,000 per QALY gained, or decides it will recommend use of an intervention within or above this range, it must explain the reasons why.

NICE’s social value principles

Principle 5– Although NICE upholds the right of individuals to make their

own decisions about their care, this should not lead NICE to recommend interventions that are not effective and cost effective for the NHS as a whole.

Principle 7– NICE can recommend that use of an intervention is

restricted to a particular group (e.g. people under or over a certain age) but only in certain circumstances. There must be clear evidence about the increased effectiveness of the intervention in this subgroup, or other reasons relating to fairness for society as a whole, or a legal requirement to act in this way.

Procedural and distributive justice coming together

Principle 6– NICE should consider and respond to comments it

receives about its draft guidance, and change it where appropriate. But NICE must always use its own judgement to ensure that what it recommends is cost effective and takes account of the need to distribute health resources in the fairest way within society as a whole.

Informationprocessing

The ‘workings’ of the Committee

Practical issuesrelating to economic

analyses

Appraisal Committee composition

Conceptual challenges

Committeeprocedures

Political

Concepts & processes

Practical

QALYsEquity

concerns

Roles ofCommittee members

Conceptual challenge: QALYs

The positives of QALYs:

They really do allow us to begin to compare hearing aids to insulin pumps to MS drugs. Now there are a lot of problems with them … but without that it becomes very difficult to do anything meaningful in terms of decision making.

The problem, drawing on the example of MND:

When people with MND are looking forward over that really quite dire prospect, … having a few weeks or a few months of better quality of life … might be valued much more highly than just assigning a QALY weight.

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.

And to conclude …

“While we recognise that there are aspects of NICE’s methods that could stand building, on balance we think that UK health economists should sleep more soundly at night for its presence …

Gold & Bryan (2007)

More in … Bryan S, Williams I, McIver S. Seeing the NICE side of cost-

effectiveness analysis: A qualitative investigation of the use of cost-effectiveness analysis in NICE technology appraisals. Health Economics 2007;16(2):179-193

Williams I, Bryan S, McIver S. How should cost-effectiveness analysis be used in health technology coverage decisions? Evidence from the NICE approach. Journal of Health Services Research & Policy 2007;12(2):73-79

Williams I, Bryan S. Cost-effectiveness analysis and formulary decision making in England. Social Science & Medicine 2007;65:2116-2129

Gold M, Bryan S. Some reasons to be cheerful about NICE. Health Economics, Policy and Law 2007;2(2):209-216