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NICE Decision Outcomes Under the Proposed Valued Based Assessment
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NICE Decision Outcomes Under the Proposed Valued Based Assessment

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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 …

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.

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  • 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
  • 5. Value Based Assessment in the UK 5 Andrew Lansley’s pre-election view, 2010
  • 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 To enquire about additional information and analyses, please contact Martina Garau at mgarau@ohe.org To keep up with the latest news and research, subscribe to our blog, OHE News. Follow us on Twitter @OHENews, LinkedIn and SlideShare. The Office of Health Economics is a research and consulting organisation that has been providing specialised research, analysis and expertise on a range of health care and life sciences issues and topics for more than 50 years. OHE’s publications may be downloaded free of charge for registered users of its website. Office of Health Economics Southside, 7th Floor 105 Victoria Street London SW1E 6QT United Kingdom +44 20 7747 8850 www.ohe.org