Pharmaceutical Executive Europe - January 2008 - (Page 22)

22 Healthcare Cost Assessment January 2008 Pharmaceutical Executive Europe Ready to Make NICE? With NICE-style drug assessments beginning to take hold in countries outside the UK, François Lucas explores industry and payer perspectives on implementing a ‘cost-effective’ system. he UK National Institute for Health and Clinical Excellence’s (NICE) evaluation of the cost effectiveness of health technologies seems very compelling, since it supports rational allocation of constrained healthcare resources. Indeed, the UK’s Office of Fair Trading (OFT) proposed in a report in 2007 to make it a cornerstone of a future value-based pricing system in the UK.1 The US and Spain are sending signals that, in the near future, cost effectiveness may take a greater and more formal place in determining access to medicines on their own markets, and Germany’s Institüt für Qualität und Wirtschaftlichkeit im Gesundheitwesen (IQWiG) is evolving and giving cost effectiveness greater prominence in its own assessments. Making such plans succeed in practice may, however, be a huge challenge. For example, the OFT’s report acknowledged that the implementation of NICE’s guidelines has been difficult and less than optimal. In a recent survey of UK payers and pharmaceutical executives,2 healthcare consultancy Pope Woodhead explored ‘real-life’ issues regarding the funding of new biologicals in oncology. This article reports some of the key findings and suggests that taking non-local and non-rational factors into consideration is an essential criterion for any sustainable application of the ‘cost effectiveness’ principle. NICE estimates the incremental costs and benefits associated with particular drugs compared to those of other therapies for the disease that are considered as the most clinically relevant, commonly used or cost effective. The assessment involves calculating a cost per QALY ratio. QALY (quality adjusted life years) is T an overall measure of the benefit to the patient, regardless of the disease area. The cost/QALY estimate can help primary care organizations (PCOs) decide at the local level which drugs to finance in a systematic and, in theory, simple way. NICE’s evidence-based guidance is — in principle — useful, because PCO advisors and managers do not have the resources and time to sift through large amounts of information. Rationalising healthcare costs The pharmaceutical company perspective. Many of those interviewed in the survey criticised the practicalities of NICE guidance, complaining that it can be unclear or inaccurate, that it comes too late, or that similar drugs obtain different assessments because they are examined in isolation. Pharmaceutical executives recognise NICE’s shortcomings, citing calculations that are “too theoretical” and “fail to take into account the impact of the therapy on productivity.” An additional complaint, particularly from small to mid-size companies, is the difficulty in generating the appropriate level of evidence to meet NICE’s demands. The challenge often lies in predicting years in advance which comparators NICE will deem relevant at the time the drug is assessed. The PCO perspective. Local implementation of NICE guidance by the PCOs has been much slower and more complicated than anticipated. As one adviser to NICE commented, “Local implementation gets really frustrating: there is a huge delay and it seems to be done in a billion different ways.” There is clearly http://www.oft.gov.uk/shared_oft/reports/comp_policy/oft885.pdf

Table of Contents for the Digital Edition of Pharmaceutical Executive Europe - January 2008

Pharmaceutical Executive Europe - January 2008
Contents
From the Editor
News and Analysis
Calendar
Corporate Strategy: Walking the Line
Executive Profile: The Pharmacist’s Friend
Q&A: An End to Drug Counterfeiting
Healthcare Cost Assessment: Ready to Make NICE?
Pricing and Reimbursement: Through the Reimbursement Barriers
Generics: India Inc.
The Mix: New Models of Excellence
Last Word: Mid-size Matters

Pharmaceutical Executive Europe - January 2008