Take a look at the Recent articles

Current controversies of using cost per QALY for cost- effectiveness analysis-Isn’t two decades enough?

Borislav Borissov

Borislav Borissov, Department of Health Technology Assessment, Faculty of Public Health, Medical University, Sofia, Bulgaria

E-mail : bhuvaneswari.bibleraaj@uhsm.nhs.uk

DOI: 10.15761/BRCP.1000191

Article
Article Info
Author Info
Figures & Data

Abstract

Cost per quality-adjusted life year (QALY) has murky origins and is empirical by nature. The fundamental issue is that QALY is not aimed at valuing health improvements but rather valuing health states. In the present era of breakthrough innovations and personalized medicine, the cost per QALY approach is outdated and far too imprecise.

Cost per QALY remains a golden standard for some health technology assessment agencies to determine the value for money of innovations. The method is associated with well-acknowledged shortcomings. Criticism to cost per QALY is steadily growing and echoed by experts and international organizations.

Cost-effectiveness analyses are expected to be expressed as costs per relevant clinical outcome and integrate fairly all relevant attributes. Cost per QALY assessment for health decision-making played its role in the last decades but should be abandoned in light of the current knowledge and nature of new medical technologies.

Key words

cost-effectiveness, health decision-making, quality-adjusted life year, QALY

Introduction

Pharmaco-economic modelling is assumed to be based on the fundamentals of probability inequalities introduced in 1962 by Hoeffding [1]. In 1997, Weinstein et al. [2] proposed the incremental cost-effectiveness ratio (ICER) per a quality-adjusted life year (QALY) in health care. Since it was first introduced, cost per QALY has been referred to in tens of thousands of publications, but only in a few concerns regarding QALYs have been previously described, yet not fully rejected [3]. Meanwhile, medicine moved from incremental innovations to breakthrough therapies, and amid these transformations, the controversy around cost per QALY’s background merits examination.

Background of cost per QALY

The origins of this method are perceived as “murky” [4]. Health care professionals warned that the use of QALYs may lead to “absurd” anomalies [5]. Nonetheless, cost per QALY remains a golden standard for some health technology assessment agencies to determine the value for money of innovations.

A fundamental problem in the use of cost per QALYs is its empirical nature. QALY is not aimed at valuing health improvements but rather at valuing health states. The current framework of economic evaluation only considers health-related preference-based outcome measures; as such, the concept of utility as measured by QALYs is much narrower compared with that in economic theory, in which welfare refers to all services that provide individuals with utility. As Harris wrote as early as in 1991, “It is lives that are valuable and not life-years” [6]. This point remains and always will be valid. In the conventional concept of QALYs, a health state that is more desirable is more valuable. A critical question is, desirable to whom [7]? Certainly, often not to patients.

Criticism to this methodology has been growing [8-11], and concerns about its limited capabilities to address adequately health determinants and assess satisfaction of society needs are echoed by international institutions [12-14]. After decades of incremental innovations, medicine has finally reached breakthrough stage; the numbers of target therapies and personalized medicine, including stem, gene, and cell therapies, are steadily rising. Treating cancer and rare and congenital diseases achieved unprecedented results. The value of medicines needs reconceptualization. Value, which is neither an abstract ideal nor a code word for cost reduction [15], encompasses new frontiers of efficiency involving numerous interventions and practically integrated health care approach. As the public sector plays a disproportionately large part in funding health interventions [16], paying the main fraction of total pharmaceutical expenditures, governments become sole decision makers in remunerating or discouraging innovation. New math on drug cost-effectiveness [17] is urgently needed. The use of value-based pricing and multi-criteria decision analysis [18] can be the first steps to properly assess the value of health care, finally bringing patient-centeredness and empathy into the process. Failure to act with haste will deteriorate the cumulative socio-economic inequalities in the allocation of health resources [19-21]. Heterogeneity in estimates on willingness to pay for QALY is well known [22]. Lastly, the results of the EU- funded European Consortium in Healthcare Outcomes and Cost-Benefit Research (ECHOUTCOME) experiment established that health assessments expressed in number of QALYs or cost/QALY are inconsistent and can lead to divergent results, because the underlying assumptions of the QALY model are not validated [23].

Discussion

Many outcome researchers increasingly ask the question: What would or could replace QALY [24]? First, all nine attribute domains of the European Network for Health Technology assessment (EUnetHTA) HTA Core Model® [25] should be finally integrated by the HTA decision framework. Multiple criteria decision analysis (MCDA) for health care decision-making is an appropriate approach for integrating multiple attributes [26,27]. The constraint optimization model has also attracted increasing attention; it offers maximization of population health gain to predefined and recognized constraints [28]. Health outcome-based payments, most often seen as pay-for-performance (P4P), are already used in Europe, the US, and other countries [29-35].

Reliance on a cost-effectiveness based on cost per QALY gained ignores the actual needs of patients, especially in the light of breakthrough therapies. This method does not properly account for benefits. Empirical by nature, the cost per QALY approach fails to distribute health resources in the fairest way within society. Proper solutions available need to be secured to allow access to novel therapies.

Conclusion

  • Cost per QALY assessment for health decision-making played its role during the last decades but should be abandoned in front of the current knowledge and nature of new medical technologies.
  • Cost-effectiveness analyses are expected to be expressed as costs per relevant clinical outcome and integrate fairly all relevant attributes. The use of case-by-case modelling, instead of the progressive replication of a methodology that is organically associated with well-known bias and uncertainty, in the future is not unfounded.
  • It is high time for health systems to adopt empathy to patients and start discussing opportunity costs gained by a novel technology and its societal perspective.

As integral medical care, personalized medicine and advanced therapies are here to stay, and the role of ICER per QALY becomes more imprecise than ever. Valuing such new technologies by cost per QALY is outdated. Indeed, doing so may be considered a scientific misconduct, blinded to patient centeredness and societal perspective. It is difficult to find excuses for the continued wide use of this approach in the era of breakthrough innovations. In the next five years, MCDA and P4P will inevitably replace cost per QALY. However, why wait so long? QALYs do not fully reflect the outcomes of all relevant medical services. Outcomes-based market entry agreements are most useful when there is uncertainty in clinical or economic outcomes, while switching the risk entirely to manufacturers.

References

  1. Hoeffding W (1962) Probability inequalities for sums of bounded random variables. University of North Carolina. Available from: https://www.stat.ncsu.edu/information/library/mimeo.archive/ISMS_1962_326.pdf
  2. Weinstein MC, Stason WB (1977) Foundations of cost-effectiveness analysis for health and medical practices.N Engl J Med296: 716-721. [Crossref]
  3. Smith MD, Drummond M, Brixner D (2009) Moving the QALY forward: rationale for change.Value Health12: S1-S4. [Crossref]
  4. Neumann PJ, Cohen JT, Weinstein MC (2014) Updating cost-effectiveness--the curious resilience of the $50,000-per-QALY threshold.N Engl J Med371: 796-797. [Crossref]
  5. Rawles J (1989) Castigating QALYs.J Med Ethics15: 143-147. [Crossref]
  6. Harris J (1991) Unprincipled QALYs: a response to Cubbon.J Med Ethics17: 185-188. [Crossref]
  7. Weinstein MC, Torrance G, McGuire A (2009) QALYs: the basics.Value Health12: S5-S9. [Crossref]
  8. Marmot M, Friel S, Bell R, Houweling TA, Taylor S, et al. (2008) Closing the gap in a generation: health equity through action on the social determinants of health. Lancet 372: 1661-1669. [Crossref]
  9. Atkinson AB (2011) The restoration of welfare economics. Am Econ Rev: 157-161.
  10. Gwatkin DR, Ergo A (2011) Universal health coverage: friend or foe of health equity?Lancet377: 2160-2161. [Crossref]
  11. Marmot M, Allen J, Bell R, Bloomer E, Goldblatt P, et al. (2012) WHO European review of social determinants of health and the health divide. Lancet 380: 1011-1029. [Crossref]
  12. Norheim O, Ottersen T, World Health Organization Consultative Group on Equity and Universal Health Coverage (2014) Making fair choices on the path to universal health coverage: final report of the WHO Consultative Group on equity and universal health coverage. Washington, DC: World Health Organization. Bull World Health Organ 92: 389.
  13. World Health Organization (2015) Tracking universal health coverage: first global monitoring report. Washington, DC: World Health Organization. Available from: https://apps.who.int/iris/bitstream/handle/10665/259817/9789241513555-eng.pdf;jsessionid=D1FBD5C26EF0D5E87D4E03DA77CF0163?sequence=1
  14. Cotlear D, Nagpal S, Smith O, Tandon A, Cortez R (2015) Going universal: how 24 developing countries are implementing universal health coverage from the bottom up. Washington, DC: World Bank Publications.
  15. Porter ME (2010) What is value in health care?N Engl J Med363: 2477-2481. [Crossref]
  16. Stiglitz J, Jayadev A (2010) Medicine for tomorrow: some alternative proposals to promote socially benefi cial research and development in pharmaceuticals. J Generic Med 7: 217-226.
  17. Bach PB (2015) New Math on Drug Cost-Effectiveness.N Engl J Med373: 1797-1799. [Crossref]
  18. Antoñanzas F, Terkola R, Postma M (2016) The Value of Medicines: A Crucial but Vague Concept.Pharmacoeconomics34: 1227-1239. [Crossref]
  19. Asaria M, Griffin S, Cookson R, Whyte S, Tappenden P (2015) Distributional cost-effectiveness analysis of healthcare programmes: a methodological case study of the UK Bowel Cancer Screening Programme. Health Econ 24: 742-54. [Crossref]
  20. Cookson RA, Propper C, Asaria M, Raine R (2016) Socioeconomic inequalities in healthcare in England. Fiscal Studies 37: 371-403.
  21. Rowen D, Brazier J, Mukuria C, Keetharuth A, Risa Hole A, et al. (2016) Eliciting societal preferences for weighting QALYs for burden of illness and end of life. Med Decis Making 36: 210-222. [Crossref]
  22. Gyrd-Hansen D, Kjaer T (2012) Disentangling WTP per QALY data: different analytical approaches, different answers. Health Econ 21: 222-237. [Crossref]
  23. Echoutcome (2009) European Consortium in Healthcare Outcomes and Cost-Benefit Research. Final Activity Report. Project 242203, FP7 Health.
  24. Smith MD, Drummond M, Brixner D (2009) Moving the QALY forward: rationale for change.Value Health12: S1-S4. [Crossref]
  25. EUnetHTA. HTA Core Model®. Available from: https://eunethta.eu/hta-core-model/
  26. Thokala P, Devlin N, Marsh K, Baltussen R, Boysen M, et al. (2016) Multiple Criteria decision analysis for health care decision making: an introduction, Report 1 of the ISPOR MCDA Emerging Good Practices Task Force. Value Health 19: 1-13. [Crossref]
  27. Marsh K, Lantis T, Neasham D, Orfanos P, Caro J (2014) Assessing the value of healthcare interventions using multi-criteria decision analysis: a review of the literature. Pharmacoeconomics 32: 345-365. [Crossref]
  28. ISPOR Optimization Methods Emerging Good Practices Task Force Report. (2016) Final draft: Constrained Optimization Methods in Health Services Research -An Introduction: Report 1 of the ISPOR Optimization Methods Emerging Good Practices Task Force.
  29. Towse A, Garrison LP Jr. (2010) Can’t get no satisfaction? Will pay for performance help?: toward an economic framework for understanding performance-based risk-sharing agreements for innovative medical products. Pharmacoeconomics 28: 93-102. [Crossref]
  30. Klemp M, Fronsdal KB, Facey K, HTAi Policy Forum (2011) What principles should govern the use of managed entry agreements? Int J Technol Assess Health Care 27: 77-83. [Crossref]
  31. Long G, Mortimer R, Sanzenbacher G (2014) Evolving provider payment models and patient access to innovative medical technology. J Med Econ 17: 883-893. [Crossref]
  32. Malik NN (2016) Pay-for-performance pricing for a breakthrough heart drug: learnings for cell and gene therapies. Regen Med 11: 225-227. [Crossref]
  33. Dranitsaris G, Dorward K, Owens RC, Schipper H (2015) What is a new drug worth? An innovative model for performance-based pricing. Eur J Cancer Care 24: 313-320. [Crossref]
  34. Garrison LP Jr, Carlson JJ, Bajaj PS, Towse A, Neumann PJ, et al. (2015) Private sector risk-sharing agreements in the United States: trends, barriers, and prospects. Am J Manag Care 21: 632-640. [Crossref]
  35. Messori A, De Rosa M, Pani L (2015) Alternative pricing strategies for cancer drugs. JAMA 313: 857. [Crossref]

Editorial Information

Editor-in-Chief

Cory J. Xian
University of South Australia

Article Type

Short Commentary

Publication history

Received: September 06, 2019
Accepted: September 23, 2019
Published: September 27, 2019

Copyright

©2019 Borissov B. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Citation

Borissov B (2019) Current controversies of using cost per QALY for cost- effectiveness analysis-Isn‘t two decades enough?. Biomed Res Clin Prac 4: DOI: 10.15761/BRCP.1000191

Corresponding author

Borislav Borissov

Department Health Technology Assessment, Faculty of Public health, Medical University, Sofia, Bulgaria

E-mail : bhuvaneswari.bibleraaj@uhsm.nhs.uk

No data.