HIS31 Rationing By Any Other Name: Drug Formularies

Question 1

Core values in HA Drug Formulary development and implementation

Answer 1

WHO: “Essential Medicine” concept
- Availability, Accessibility, Affordability, Quality, Rational use of medicine

Aim: Standardisation of drug utilisation

Core values:

1. Equitable access, targeted subsidy
2. Cost-effectiveness of drugs of proven safety and efficacy
3. Evidence based practice
4. Rational use of scarce resources, opportunity costs
5. Facilitation of patients choices

Question 2

4 drug categories in HA Drug Formulary

Answer 2

1. General
   - available for **general use as indicated by patients with medical conditions
   - well established indications and cost-effectiveness
   - **standard fees and charges
2. Special
   - prescribed to patients under **specific conditions with specific **specialists authorisation
   - ***standard fees and charges but prescribed under specific clinical conditions
   - patients do not meet specific clinical conditions but wish to use them are required to pay for them
3. Self-financed items (SFIs) with safety net
   - provided to bring clinical benefits but are **extremely expensive
   - impossible to provide as standardised service
   - **not covered by standard fees and charges
   - purchase them on own expenses
   - may apply subsidies through ***safety net
4. SFIs without safety net
   - preliminarily medical evidence / only **marginal benefits / alternative drugs at high cost e.g. life-style modification drugs
   - not provided as standardised service
   - **not covered by standard fees and charges
   - ***must pay for them

Question 3

Targeted subsidy - Safety net

Answer 3

• Ensures no one will be denied adequate healthcare
• Subsidy for patients with financial difficulties in acquiring certain specified drugs that are clinically proven to be effective but very expensive

Example:

1. Cytotoxic drugs
2. Hormone antagonists in malignant diseases
3. Drugs for blood disorder
4. Drugs affecting immune response

2 main fund providing subsidies:

• The Samaritan Fund
• The Community Care Fund (CCF)

Question 4

Listing of drugs on HADF
Considerations for New Drug Evaluation
Repositioning across categories

Answer 4

***3 leading principles:
1. Safety
2. Efficacy
3. Cost-effectiveness
—> short term, long term, compared with existing alternative / placebos for same disease condition

Other principles:

1. International recommendations and practices
2. Changes in technology
3. Pharmacological class
4. Disease state
5. Patient compliance
6. Quality of life
7. Actual experience in use of drugs
8. Comparison with available alternatives
9. Views of main stakeholders

Question 5

Main challenges of HADF

Answer 5

1. Rising and competing demands for providing new drug treatments
2. Variations in costs, therapeutic effectiveness, SE, health outcomes
3. Optimising health benefits for society
4. Drug Management Committee governance and operational transparency

Therefore, Economic evaluation is needed to make informed decision

Question 6

***Economic evaluation

Answer 6

Deals with relationships between costs and outcomes among competing options

1. Cost-minimisation analysis
   - compare between treatment with same volume and same type e.g. reduction on pain scale (e.g. choice between generic / branded medications)
   - choose: cheapest option
2. Cost-benefit analysis
   - place monetary value on any outcome e.g. monetary value of reduced pain
   - “doing something” / “doing nothing else”
   - e.g. if to invest a new haematologic unit in hospital
3. Cost-effectiveness analysis
   - same type outcome but different volume e.g. different reduction on pain scale
   - choose: option with lower cost-effectiveness ratio (CER) = ***cost per unit benefit
   - e.g. choice between 2 different painkillers with different cost and effectiveness
4. Cost-utility analysis
   - QALY e.g. survival time at reduced quality weight due to pain
   - choose: option with lower cost-utility ratio (CUR) = ***cost per one QALY
   - QALY = survival years (extra years of life gain) x quality weight (quality of life)

Quality weight estimation:

1. Visual analog scale
2. Time trade off method (whether patient want to live longer with less quality / vice versa)
3. Standard gamble method (choose to do nothing or treatment —> treatment either perfect health (p) / death outcome (1-p), risk estimated as chance of death)
4. Questionnaire (EQ5D)

Question 7

Incremental Cost Effectiveness Ratio (ICER)

Answer 7

ICER = Difference in costs between A, B (A-B) / Difference in benefits between A, B (A-B)

• Used in cost-effectiveness / utility analysis
• Represent main outcome of economic evaluation when new drug is **more costly but generates **improved health effect in comparison with relevant alternative (A-B 一定係positive)
• ICERs are compared with a ***pre-determined cost-effectiveness threshold in order to decide whether choosing new intervention is an efficient use of resources

ICER Cost Effectiveness Plain:
4 quadrants
NE quadrant: More Cost / More Effect: Need to evaluate (common for new therapy)
NW quadrant: More Cost / Less Effect: Abandon / reject
SE quadrant: Less Cost / More Effect: Dominant over other options (encourage / accept)
SW quadrant: Less Cost / Less Effect: Need to evaluate (common for old therapy)

***Cost-effectiveness threshold: maximum amount a decision maker is willing to pay for a unit of health benefit
—> below threshold: decision maker will recommend new therapy
—> not established in previous decision making process
—> not output of cost-effectiveness analysis
—> but guide interpretation of cost-effectiveness analysis for decision making

ICER Cost Acceptability Curve:
- Graph summarising impact of uncertainty on result of an economic evaluation
- frequently expressed as ICER, in relation to possible values of the cost-effectiveness threshold
- e.g. if only willing to pay $5000 —> Warfarin most cost effective
if willing to $10000 —> Warfarin and Apixaban equally cost effective
if willing to pay $30000 —> Apixaban most cost effective

Question 8

Health Technology Assessment

Answer 8

Health technology:
- An intervention that may be used to promote health, to prevent, diagnose / treat acute / chronic disease / for rehabilitation

HTA:
- multidisciplinary assessment of medical, economic, social, ethical implications of development, diffusion, use of health technology

Question 9

HTA assessment

Answer 9

1. Identify ***evidence on benefits and costs of health technology
2. Synthesise ***health research findings about effectiveness of different health technology
3. Evaluate **economic implications, analysing **cost, cost-effectiveness
4. Appraise **social and ethical implications of use of health technologies as well as their **organisational implications
5. Identify ***best practices in health care —> enhancing safety, improving quality and saving costs

Question 10

National Institute for Health and Care Excellence (NICE)

Answer 10

• Independent non-governmental organisation, funded by UK DOH
• Provide ***national guidance and advice to improve health and social care

Roles: Regional, International

• Promote ***cost-effective use of NHS resources
• Reduce ***variation in availability and quality of treatment / care
• Resolve uncertainty about which medicines / treatments work best + which represent best value for money for NHS
• Set ***national standards on how people with certain conditions should be treated based on best available evidence and participatory process
• Produce ***educational and training tool to improve quality of care

International role:

• HTA
• Advising, recommendation for health care quality improvement
• Advisory on accreditation

Core principle:
***Accountability for reasonableness

Products:

1. Evidence based guidance
2. Clinical guidelines for diseases including technology appraisals for specific drugs
3. Quality standards, Performance metrics
4. Evidence based comprehensive set of recommendations, measurable indicators, prioritisation

Centres:

• Clinical practice (clinical guidelines, recommending interventions)
• Health Technology Evaluation (of surgical intervention devices, pharmaceuticals)
• Health and Social care

NICE decision:

• Effectiveness
• Cost-effectiveness
• Irreversibility of decision

Values:
- social, ethics, equity, human rights, practicality of implementation, legal, policy constraints

Question 11

Summary

Answer 11

HADF leading principles: Efficacy, Safety, Cost-effectiveness

Economic evaluations:

• identify costs and benefits
• make decision on HADF development

Major forms of economic evaluation:

1. Cost-minimisation analysis
2. Cost-effectiveness analysis
3. Cost-utility analysis
4. Cost-benefit analysis

ICER:

• statistical method
• compare results of economic evaluations with a pre-determined cost-effectiveness threshold —> decide whether choosing a new intervention is an efficient use of resources

HTA:
- multidisciplinary assessment of impact of health technology implementation

NICE:
- organisation providing advisory role related to quality of health care including HTA