This timely presentation addresses the changes that are proposed under NICE's new value-based assessment (VBA) approach to assessing health technologies. It reviews NICE's current approach and decisions to date for all technologies and separately for orphan and cancer drugs. VBA's proposed calculations for burden of illness and societal impact use estimates of 'shortfall' are illustrated in the presentation. Also discussed are changes in QALY thresholds.
NICE Decision Outcomes Under the Proposed Valued Based Assessment
1. NICE Decision Outcomes Under the
Proposed Value Based Assessment
(VBA)
Martina Garau
PharmAccess Leaders Forum • 19 May 2014
Paris, France
2. Value Based Assessment in the UK 2
• Established in 1962
• Conduct research and provide consultancy services
on health economics and related policy issues that
affect health care and the life sciences industries
• Senior Leadership Team: Adrian Towse, Nancy Devlin, Jon
Sussex and Jorge Mestre-Ferrandiz; and a team with
diverse and complimentary expertise.
• Examples: value-based pricing for molecular diagnostics;
multi-criteria decision analysis for valuing orphan
medicines; using QALYs in cancer
About OHE
3. Value Based Assessment in the UK 3
• Context
• Key changes of NICE methods proposed in the value based
assessment (VBA) consultation:
• ICER threshold/ 'flexible' decision making
• Burden of illness
• Wider societal impact
• Other criteria
• Measuring absolute and proportional shortfall
• Illustrative examples
• Data required for shortfall measurements
• Summary points
Agenda
4. Value Based Assessment in the UK 4
• ‘Value based pricing’ (VBP) entered UK policy
language via the Office of Fair Trading's (OFT)
February 2007 report of its investigation into the
Pharmaceutical Price Regulation Scheme (PPRS)
• One key recommendation: replacement of profit
and price controls with 'VBP'
• Centralised price setting mechanism determined
(or at least heavily influenced) by HTA, assuming:
• value = incremental cost effectiveness, and
• an explicit threshold can be determined
History of value based pricing
6. Value Based Assessment in the UK 6
1. Pharmacoeconomic
evaluation - QALYs
2. 'Burden of illness'
3. 'Therapeutic
innovation &
improvements'
4. 'Wider societal
benefits'
5. Combined via adjusted
£/QALY threshold
DH proposing 'VBP' for all new medicines
(December 2010)
December
2010
July 2011
7. Value Based Assessment in the UK 7
• Central role of NICE in value based
assessment (VBA)
• Consultation set out to amend the
current Guide to Methods of Technology
Appraisal
• ...to end in June 2014
Terms of reference to NICE
from DH (July 2013)
8. Value Based Assessment in the UK 8
HTA
• Manufacturer sets price then NICE accepts or rejects for
reimbursement at that price
• Life-extending treatments for patients with <2 years of
life expectancy may be eligible for an end-of-life premium
PPRS: 1 January 2014 until 31 Dec 2018
• Pre-agreed level of allowed growth rate of UK branded
medicine bill for each year of the scheme
• Payments in cash once the allowed growth rate is
exceeded
Current HTA processes and pricing
system
9. Distribution of NICE decisions
by year
NICE has become more binary in its decisions
Source: OHE Analysis
10. Distribution of NICE decisions for
orphan medicines
75% of orphans are for cancer
Source: OHE analysis
Orphan drugs are less likely to be recommended by NICE
11. Distribution of NICE decisions for cancer drugs:
before and after introduction of end-of -life
(EoL) criteria (2009)
Post-EoL era is associated with more cancer medicine rejections
(Note: not all cancer medicines qualify for EoL criteria)
Source: OHE analysis
12. Value Based Assessment in the UK 12
• Context
• Key changes of NICE methods proposed in the
value based assessment (VBA) consultation:
• ICER threshold/ 'flexible' decision making
• Burden of illness
• Wider societal impact
• Other criteria
• Measuring absolute and proportional shortfall
• Illustrative examples
• Data required for shortfall measurements
• Summary points
Agenda
13. Value Based Assessment in the UK 13
NICE’s current approach
£20,000 per QALY
£30,000 per QALY
£50,000 per QALY
Source: NICE Consultation Paper – Value Based Assessment of Health Technologies
14. Value Based Assessment in the UK 14
Proposed 'modifiers'
£20,000 per QALY
£50,000 per QALY
Source: NICE Consultation Paper – Value Based Assessment of Health Technologies
15. Value Based Assessment in the UK 15
• Current threshold: £20k to £30k with discretion
above that level (mainly based on end-of-life
criteria)
• Proposed threshold: £20k with discretion up to
£50k
• Maximum multiplier (now explicitly indicated) = 2.5
• No indication on how modifiers will be combined
• Only specified that their cumulative impact cannot
exceed 2.5
New 'flexible' decision making
16. Value Based Assessment in the UK 16
• Aim is to measure the severity of the condition suffered by
the patient population
• Measured using 'proportional QALY shortfall‘
=
𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑜𝑜𝑜𝑜 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑤𝑤𝑤𝑤𝑤𝑤 𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 (𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑎𝑎𝑎𝑎𝑎𝑎)
𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛 𝑜𝑜𝑜𝑜 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑓𝑓𝑓𝑓𝑓𝑓 ℎ𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 (𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑎𝑎𝑎𝑎𝑎𝑎)
• Recognises severity position of patients at end of life (EoL)
independently from age proposal is to exclude EoL criteria
• Products that have greater than average proportional
shortfall will be assessed against a higher threshold
(multiplier > 1)
• No guidance for committee on how to apply burden measures
to threshold
Burden of illness (BoI)
17. Value Based Assessment in the UK 17
• No direct attempt to estimate wider economic impact of a
treatment (e.g. 'working days lost')
• Instead, NICE proposes to use 'absolute QALY shortfall'
as a proxy for patient’s reduced ability to contribute to
society
= 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑜𝑜𝑜𝑜 𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄𝑄 𝑤𝑤𝑤𝑤𝑤𝑤 𝑤𝑤𝑤𝑤𝑤𝑤𝑤 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 (𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔𝑔 𝑎𝑎𝑎𝑎𝑎𝑎)
• Products that have greater than average absolute shortfall
could face a threshold greater than £20k
• Again, no guidance as to how this will work in practice
Wider societal impact (WSI)
18. Value Based Assessment in the UK 18
• Context
• Key changes of NICE methods proposed in the value
based assessment (VBA) consultation:
• ICER threshold/ 'flexible' decision making
• Burden of illness
• Wider societal impact
• Other criteria
• Measuring absolute and proportional shortfall
• Illustrative examples
• Data required for shortfall measurements
• Summary points
Agenda
19. Value Based Assessment in the UK 19
• Absolute shortfall (AS)
• Captures that society cares about absolute loss of life and
quality of life
• Based on 'prospective health' (no value on previous health
experiences)
• Benefits younger populations who have a more QALYs to
lose sensitive to age
• Proportional shortfall (PS)
• Capable of recognising severity of illness in elderly
populations
• Gives weight to populations facing imminent death
• Contains elements of fair innings and prospective health
arguments
Absolute shortfall vs. proportional
shortfall
20. Value Based Assessment in the UK 20
Measuring absolute and
proportional shortfall (1)
Source: NICE Decision Support Unit critique of DH proposals for BoI
21. Value Based Assessment in the UK 21
Measuring absolute and
proportional shortfall (2)
• Total potential health (disease-free) going forward =
A+B+C+D
• Current health prospects (with disease) = D
• Absolute shortfall = health lost due to disease = total
potential health minus current health prospects = A+B+C
• Proportional shortfall = ratio of health lost to total potential
health = (A+B+C) / (A+B+C+D)
22. Value Based Assessment in the UK 22
• TA 178: Bevacizumab, sorafenib, sunitinib and temsirolimus for
treatment of advanced renal cell carcinoma
• Average age of patient = 60
• Expected QALYs without disease = 20.5
• Expected QALYs with disease = 1.24
– Met EoL criteria
• Absolute shortfall = 20.5 – 1.24 = 19.26
• Proportional shortfall = 19.26/20.5 = 94%
• Both AS and PS significantly greater than average (2.1; 9%)
implies drug would be assessed against ICER threshold > £20k
• Proportional shortfall could replicate EoL effect
Illustrative example 1
Source: NICE illustrative table
http://www.nice.org.uk/getinvolved/currentniceconsultations/MethodsOfTechnologyAppraisalConsultation2014.jsp
23. Value Based Assessment in the UK 23
• TA 217: Donepezil, galantamine, rivastigmine and memantine
for the treatment of Alzheimer’s disease
• Average age of patient = 77
• Expected QALYs without disease = 8.7
• Expected QALYs with disease = 1.58
• Absolute shortfall = 8.7 – 1.58 = 7.09
• Proportional shortfall = 7.09/8.7 = 82%
• Again, both AS and PS significantly greater than average (2.1;
9%) implies drug would be assessed against ICER threshold
> £20k
• However, absolute shortfall is lower than previous example,
given age of patients
Illustrative example 2
Source: NICE illustrative table
http://www.nice.org.uk/getinvolved/currentniceconsultations/MethodsOfTechnologyAppraisalConsultation2014.jsp
24. Value Based Assessment in the UK 24
• TA 254: Fingolimod for the treatment of relapsing remitting
multiple sclerosis
• Average age of patient = 37
• Expected QALYs without disease = 40.7
• Expected QALYs with disease = 3.99
• Absolute shortfall = 40.7 – 3.99 = 36.71
• Proportional shortfall = 36.71/40.7 = 90%
• Both AS and PS very high relative to average implies drug would
be assessed against ICER threshold > £20k
• AS particularly high – reflects young average age of patients and
large health loss with disease
Illustrative example 3
Source: NICE illustrative table
http://www.nice.org.uk/getinvolved/currentniceconsultations/MethodsOfTechnologyAppraisalConsultation2014.jsp
25. Value Based Assessment in the UK 25
• TA 278: Omalizumab for treatment of severe asthma
• Average age of patient = 43
• Expected QALYs without disease = 34.83
• Expected QALYs with disease = 25.31
• Absolute shortfall = 34.83 - 25.31 = 9.52
• Proportional shortfall = 9.52/34.83 = 27%
• Again, both AS and PS greater than average (2.1, 9%)
but PS lower level than previous examples
Illustrative example 4
Source: NICE illustrative table
http://www.nice.org.uk/getinvolved/currentniceconsultations/MethodsOfTechnologyAppraisalConsultation2014.jsp
26. Value Based Assessment in the UK 26
Data required for shortfall
measurements
• DH has calculated BoI for different conditions from a reference
dataset developed by the University of York
• This presents BoI by the three digit ICD-10 code, aggregated
across 16 age/gender categories
• Given the broad level of aggregation within the reference dataset,
there could be different levels of severity for which it would be
important to capture the appropriate BoI
• In technology appraisals, it will be appropriate for the company to
present the BoI for the specific patient population for the product
being appraised
27. Value Based Assessment in the UK 27
• Uncertainty around incremental cost effectiveness
ratio (ICER):
• Penalties for uncertainty around the ICER now only
apply for routine use and where ICER is 'very
uncertain' rather than 'less certain'
• Health-related quality of life (HRQoL) inadequately
captured:
• No changes proposed
• Innovative nature of technology:
• Now includes reference to 'a step change in the
management of a condition'
• Non-health objectives of the NHS:
• No changes proposed
Other modifiers
28. Value Based Assessment in the UK 28
• Cost savings outside the NHS and non-health
benefits (e.g. productivity) can now be
considered even when not specifically requested
by the Department of Health in non-reference
case
Other changes to the methods
guide
29. Value Based Assessment in the UK 29
• EoL criteria replaced by BoI
• Proposed threshold = £20k, with discretion up to £50k for products
that qualify for modifiers
• No guidance on BoI and WSI weights
• No guidance on how other factors will be quantified and
aggregated
• It is likely that NICE will continue adopting a deliberative,
rather than an algorithmic, approach to making decisions
• An evolutionary, not revolutionary change
• For most products, outcomes will probably be similar to those
under the old system
Summary of key points
30. Value Based Assessment in the UK 30
Paul Barnsley for his work on absolute and proportional shortfall (see OHE
note on the NICE website)
Acknowledgements
31. Value Based Assessment in the UK 31
About OHE
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mgarau@ohe.org
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