The Dismal Scientist!The Price of Everything, the Value of Nothing                         Ken Paterson              RMCSG...
Health Technology Assessment► Why do we need it at all?► What is it?► How is it actually done?     Is it about science or...
Increasing Pressures in all          Health-Care Systems► Population demography   Aging population in almost all countrie...
Pharmaceutical Market 2013► Three decades of major advances► Effective medicines for most common diseases   Often now ‘ge...
Medicines Licensing► Safety► Quality► Efficacy (v placebo)► Not comparative efficacy (or effectiveness)► Not ‘place in the...
Health Technology Assessment► Provides a logical framework for decisions► Has to compare many options –   Different disea...
HTA - How is it Actually Done?► Liraglutide – a new GLP-1 agonist     Usually more expensive than exenatide     Possibly...
Clinical Issues for HTA► S, Q and E covered by licensing► Comparative efficacy tested► Comparative safety tested   …inclu...
Liraglutide Study Programme► LEAD 1 – on SU, compare L to TZD► LEAD 2 – on MF, compare L to SU► LEAD 4 – on MF/TZD, compar...
How Do We Measure Health Gain?► 2 main domains   Quantity of life (= survival)   Quality of life► QALY (quality-adjusted...
How To Measure Quality of Life► Utility from 1 (perfect health) to 0 (death)► Visual analogue scale► Generic questionnaire...
Utility Value Examples► Diabetes, no complications    0.814► MI, 2 years after event       0.736► Congestive heart failure...
Trial v Lifetime Benefit► Clinical trial shows short-term effects on surrogates     HbA1c     Blood pressure     Lipids...
Modelling in Diabetes► LOTS of great epidemiological data   … including outcome of interventions► LOTS of complexity   M...
The Black Box Approach         Input         Output
The Actual Modelling                                                                         User sets simulation         ...
CORE Diabetes Model►CORE Diabetes Model                            ►UKPDS Outcomes Model     Angina                      ...
CORE Model – How Reliable?CORE Diabetes Model values                                       66 validation analyses         ...
Basic Model StructureCohort                                           Economics             Treatment            Clinical ...
Simple Markov Model                    Healthy                                                                            ...
Costs to NHS by Health   Healthy           Ill           Dead  Cost: € 25    Cost: € 2500      Cost: € 0Not only medicine...
Quality of Life Healthy             Ill        DeadCost: € 25      Cost: € 2500   Cost: € 0 QoL: 1.0         QoL: 0.5     ...
Over Time – nothing changes…   Healthy          Ill        Dead  Cost: € 25   Cost: € 2500   Cost: € 0   QoL: 1.0      QoL...
…or you can move on! Healthy          Ill        DeadCost: € 25   Cost: € 2500   Cost: € 0 QoL: 1.0      QoL: 0.5     QoL:...
…and we know the chances!!                30%    Healthy                Ill              Dead   Cost: € 25         Cost: €...
How Does the Model Run?► We know all the clinical issues   …and chances of progression/improvement► We know the impact of...
Monte-Carlo Simulation!► We know our diabetes population► Let’s invent 1000 patients    … representative of ALL Scottish ...
The Actual Markov Model                                                                         User sets simulation      ...
Single Patient Data£   Additional      Health                 Additional                    Cost                          ...
The Whole Population £            QALY
Liraglutide 1.2mg v Exenatide                     £10,000                       £5,000                           £0  -1   ...
Liraglutide 1.8mg v Exenatide                          £10,000                            £5,000                          ...
Sensitivity Analysis► A series of ‘what-if’ tests► Allows exploration of doubt in the model     Remove or add individual ...
Liraglutide 1.2mg Cost-Effectiveness► LEAD 1 – on SU, L v TZD       £10,751► LEAD 2 – on MF, L v SU        £23,598► LEAD 4...
Liraglutide 1.8mg Cost-Effectiveness► LEAD 1 – on SU, L v TZD       £17,394► LEAD 2 – on MF, L v SU        £43,369► LEAD 4...
Cost-Effectiveness Threshold► <£20K – YES; >£30K – NO► Plucked from thin air – no ‘scientific’ basis   Industry (?patient...
What Can Prescribers Add?► Information on real-world practice     … what is/are the best comparator(s)?     … how are th...
The Larkin Tests!► The Poke of Chips test   Drug X                        outcomes…..   Drug X + docetaxel       outcome...
What Can Patients Add?► Real insights into their experience of diabetes► Detail on the problems of current therapy   Tole...
How Good Are New Medicines?► Manufacturers’ assessments of lifetime health gain for 256 medicines      27% NO health gain ...
HTA - Implications for            Prescribers► Good prescribing cannot ignore cost► Cost-effectiveness is not about saving...
Do We Need to Redefine               ‘Value’?► Licensing based on ‘risk:benefit’► Benefit is the impact on the disease   ...
Anti-Disease to Pro-Patient  ► Anti-cancer  ► Anti-retroviral  ► Anti-infective  ► Anti-fungal  ► Anti-diabetic  ► Anti-hy...
Medicine for Cancer or Patient? •Two medicines for the same cancer - outcome at 8 months   – Medicine A - 30% reduction in...
The Paradigm Shift► NOT ‘how does the medicine impact the disease’   RECIST, viral load, CRP etc► BUT “how does the medic...
Value Assessment in Healthcare► Probably a necessary ‘evil’   The worst way apart from all the others!► Principles of hea...
Thomas Carlyle        “That there should one        man die ignorant who        had capacity for        knowledge, this I ...
Oscar Wilde       “It is always a silly       thing to give advice,       but to give good advice       is fatal!”       “...
Thank You!
The Dismal Scientist: the price of everything, the value of nothing
The Dismal Scientist: the price of everything, the value of nothing
The Dismal Scientist: the price of everything, the value of nothing
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The Dismal Scientist: the price of everything, the value of nothing

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How do we evaluate the cost-effectiveness of new medicines? What value do we place on effective drugs? Prof. Ken Paterson explores the challenging area of health economics and how we judge whether we can afford new treatments in a cash-limited health service.

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  • QALY Gain 0.118 Cost £1841
  • The Dismal Scientist: the price of everything, the value of nothing

    1. 1. The Dismal Scientist!The Price of Everything, the Value of Nothing Ken Paterson RMCSG/GSMS Joint Meeting 10 January 2013
    2. 2. Health Technology Assessment► Why do we need it at all?► What is it?► How is it actually done?  Is it about science or just about money?  Can it really assess costs, benefits and value?  Is it too complex for ‘real people’ to grasp?► What can prescribers (and patients) add?► Are ‘they’ all heartless bean-counters?  …or is it the way forward?
    3. 3. Increasing Pressures in all Health-Care Systems► Population demography  Aging population in almost all countries  Increasing obesity and physical inactivity► Patient/Public expectation  More possibilities to intervene beneficially  “a pill for every ill!”  Lifestyle drugs/disease mongering► Changing environment for new medicines  Mature market place
    4. 4. Pharmaceutical Market 2013► Three decades of major advances► Effective medicines for most common diseases  Often now ‘generic’ agents at low cost  Most needs met (at least to some extent)► New medicines of two main types  Extend choice in existing crowded areas  New options in niche areas of unmet need► Do the benefits justify the (opportunity) costs?
    5. 5. Medicines Licensing► Safety► Quality► Efficacy (v placebo)► Not comparative efficacy (or effectiveness)► Not ‘place in therapy’► Not ‘value for money’► Licensing important but limited
    6. 6. Health Technology Assessment► Provides a logical framework for decisions► Has to compare many options –  Different disease areas  Different interventions  Different patient groups► Has to be as objective and dispassionate as possible  …but still with a human face► Inevitably produces ‘winners’ and ‘losers’
    7. 7. HTA - How is it Actually Done?► Liraglutide – a new GLP-1 agonist  Usually more expensive than exenatide  Possibly better efficacy/tolerability► A new option after 1 or 2 existing therapies  Usually more expensive than TZD or DPP-4  Different efficacy and tolerability profile  Different ‘added value’ – eg weight► Is it a good use of limited NHS money?
    8. 8. Clinical Issues for HTA► S, Q and E covered by licensing► Comparative efficacy tested► Comparative safety tested  …includes tolerability► Likely effectiveness in ‘real-world’ clinical practice tested  …will it do what it says on the tin?► Overall, is it ‘value for money’?
    9. 9. Liraglutide Study Programme► LEAD 1 – on SU, compare L to TZD► LEAD 2 – on MF, compare L to SU► LEAD 4 – on MF/TZD, compare L to glargine► LEAD 5 – on MF/SU, compare L to glargine► LEAD 6 – on MF/SU, compare L to exenatide► Which is/are the most relevant comparisons?  No comparison to DDP-4 inhibitor (‘gliptin’)
    10. 10. How Do We Measure Health Gain?► 2 main domains  Quantity of life (= survival)  Quality of life► QALY (quality-adjusted life year) gets both
    11. 11. How To Measure Quality of Life► Utility from 1 (perfect health) to 0 (death)► Visual analogue scale► Generic questionnaire  EQ-5D has 200 health states with utility for each► Preference–based measures  Time trade off  Standard gamble► An inexact science – ?what would be better
    12. 12. Utility Value Examples► Diabetes, no complications 0.814► MI, 2 years after event 0.736► Congestive heart failure 0.633► Painful neuropathy 0.624► Stroke, 2 years after event 0.545► Haemodialysis 0.490► BMI (per kg/m2 above 25) 0.006-
    13. 13. Trial v Lifetime Benefit► Clinical trial shows short-term effects on surrogates  HbA1c  Blood pressure  Lipids  Weight► HTA needs to see the consequent outcomes  Mortality  Morbidity► Health economic ‘modelling’ the key
    14. 14. Modelling in Diabetes► LOTS of great epidemiological data  … including outcome of interventions► LOTS of complexity  Many surrogates  Many outcomes ►Macrovascular events ►Microvascular complications► How can we put all this together?
    15. 15. The Black Box Approach Input Output
    16. 16. The Actual Modelling User sets simulation conditions Generate baseline population No Any patients to run? Stop Yes Time horizon Yes Reached? No Screening ACEItreatment LASER treatment Statintreatment Aspirin Neuro- Foot ulcer, Retino- Macular Nephro-- Hypo- Keto- Lactic Non-spec.treatment MI Angina CHF Stroke PVD Cataract pathy amputation pathy edema pathy glycemia acidosis acidosis mortality Specific Specific Specific Specific Specific Specific Specific Specific mortality mortality mortality mortality mortality mortality mortality mortality Overall annual survival Time counter advances Update simulation data
    17. 17. CORE Diabetes Model►CORE Diabetes Model ►UKPDS Outcomes Model  Angina  Ischaemic heart disease  Myocardial infarction  Myocardial infarction  Heart failure  Heart failure  Stroke  Stroke  Blindness  Peripheral vascular disease  Renal failure  Diabetic retinopathy and blindness  Amputation  Macular oedema ► First occurrence only  Cataract  Hypoglycaemia  Ketoacidosis, lactic acidosis  Nephropathy and end-stage renal disease  Neuropathy  Foot ulcer and amputation
    18. 18. CORE Model – How Reliable?CORE Diabetes Model values 66 validation analyses 100 R2 = 0.9222 y = 1.0187 x 80 60 40 20 0 0 20 40 60 80 100 Published study values
    19. 19. Basic Model StructureCohort Economics Treatment Clinical (costs and(baseline) utilities) Data processing (calculating annual risks for 15 different complications) The results (predicting the clinical outcomes and associated HE results: incidence rates, LE, QALE, costs, and more)
    20. 20. Simple Markov Model Healthy Ill Dead User sets simulation conditions Generate baseline population No Any patients to run? Stop Yes Time horizon Yes Reached? No Screening ACEItreatment LASER treatment Statintreatment Aspirin Neuro- Foot ulcer, Retino- Macular Nephro-- Hypo- Keto - Lactic Non-spec.treatment MI Angina CHF Stroke PVD Cataract pathy amputation pathy edema pathy glycemia acidosis acidosis mortality Specific Specific Specific Specific Specific Specific Specific Specific mortality mortality mortality mortality mortality mortality mortality mortality Overall annual survival Time counter advances Update simulation data
    21. 21. Costs to NHS by Health Healthy Ill Dead Cost: € 25 Cost: € 2500 Cost: € 0Not only medicines costs but ALL costsfrom NHS budgetsA costly medicine may offset its cost byproducing savings elsewhere
    22. 22. Quality of Life Healthy Ill DeadCost: € 25 Cost: € 2500 Cost: € 0 QoL: 1.0 QoL: 0.5 QoL: 0.0
    23. 23. Over Time – nothing changes… Healthy Ill Dead Cost: € 25 Cost: € 2500 Cost: € 0 QoL: 1.0 QoL: 0.5 QoL: 0.0
    24. 24. …or you can move on! Healthy Ill DeadCost: € 25 Cost: € 2500 Cost: € 0 QoL: 1.0 QoL: 0.5 QoL: 0.0
    25. 25. …and we know the chances!! 30% Healthy Ill Dead Cost: € 25 Cost: € 2500 Cost: € 0 QoL: 1.0 QoL: 0.5 QoL: 0.0 15% 20% 80% 50% 5%Chances are obviously dependent on time -these are the chances per cycle length (1 year)
    26. 26. How Does the Model Run?► We know all the clinical issues  …and chances of progression/improvement► We know the impact of changes in -  Weight  HbA1c  BP  Lipids► … on chances of progression/improvement► We know how the interventions (liraglutide and comparators) affect these surrogates
    27. 27. Monte-Carlo Simulation!► We know our diabetes population► Let’s invent 1000 patients  … representative of ALL Scottish patients► Let’s treat them with liraglutide or comparator► Let’s run the model until they all die (~20 years)► Let’s see the costs and health gains with liraglutide and with the comparator  For each patient calculate the extra cost and extra QALYs (or less cost or QALYs)► Let’s see what the overall cost-per-QALY looks like
    28. 28. The Actual Markov Model User sets simulation conditions Generate baseline population No Any patients to run? Stop Yes Time horizon Yes Reached? No Screening ACEItreatment LASER treatment Statintreatment Aspirin Neuro- Foot ulcer, Retino- Macular Nephro-- Hypo- Keto - Lactic Non-spec.treatment MI Angina CHF Stroke PVD Cataract pathy amputation pathy edema pathy glycemia acidosis acidosis mortality Specific Specific Specific Specific Specific Specific Specific Specific mortality mortality mortality mortality mortality mortality mortality mortality Overall annual survival Time counter advances Update simulation data
    29. 29. Single Patient Data£ Additional Health Additional Cost QALY
    30. 30. The Whole Population £ QALY
    31. 31. Liraglutide 1.2mg v Exenatide £10,000 £5,000 £0 -1 -0.5 0 0.5 1∆ Costs (£) -£5,000 -£10,000 ∆ QALY (years)Most patients are cheaper with most gettinghealth-gain – liraglutide DOMINANT
    32. 32. Liraglutide 1.8mg v Exenatide £10,000 £5,000 £0 -1 -0.5 0 0.5 1 ∆ Costs (£) -£5,000 -£10,000 ∆ QALY (years)Most patients cost more but get more health-gain– median cost-per-QALY £15,581
    33. 33. Sensitivity Analysis► A series of ‘what-if’ tests► Allows exploration of doubt in the model  Remove or add individual factors (eg mortality)  Allow for ‘real-world’ rather than clinical trial  Use different utility (QoL) values► Shows what are the key assumptions  We can then test these with real clinicians  We can focus our final judgment on these► Cost-per-QALY is not set in stone!!
    34. 34. Liraglutide 1.2mg Cost-Effectiveness► LEAD 1 – on SU, L v TZD £10,751► LEAD 2 – on MF, L v SU £23,598► LEAD 4 – on MF/TZD, L v glarg £7,801► LEAD 5 – on MF/SU, L v glarg £8,847► LEAD 6 – on MF/SU, L v exen dominant
    35. 35. Liraglutide 1.8mg Cost-Effectiveness► LEAD 1 – on SU, L v TZD £17,394► LEAD 2 – on MF, L v SU £43,369► LEAD 4 – on MF/TZD, L v glarg £14,923► LEAD 5 – on MF/SU, L v glarg £17,777► LEAD 6 – on MF/SU, L v exen £15,581
    36. 36. Cost-Effectiveness Threshold► <£20K – YES; >£30K – NO► Plucked from thin air – no ‘scientific’ basis  Industry (?patients) think it should be higher (!)  Economists think it should be lower (?£15K)► Provides a level of fairness even if wrong!  … but links poorly to other initiatives ►Motorway barriers ►Automated train signalling ►Airport security► Worthy of greater discussion/debate
    37. 37. What Can Prescribers Add?► Information on real-world practice  … what is/are the best comparator(s)?  … how are these patients looked after?  … what is the extent/nature of unmet need?► Comment on the health economic case  Not the detail but the clinical assumptions  Is the model capturing all benefits (and ADRs)?  Economists (pharma and HTA!) good at maths and models, not clinical practice
    38. 38. The Larkin Tests!► The Poke of Chips test  Drug X outcomes…..  Drug X + docetaxel outcomes…..► The Larkin Test  “If this medicine does very little and costs £5000 per year, why is the cost per QALY £10?”► Sense-checking always crucial!!
    39. 39. What Can Patients Add?► Real insights into their experience of diabetes► Detail on the problems of current therapy  Tolerability  Convenience► Potential patient sub-groups for new therapy  … beyond pure clinical trial data  … based on vignettes/anecdote at times► Main role is in finely-balanced decisions
    40. 40. How Good Are New Medicines?► Manufacturers’ assessments of lifetime health gain for 256 medicines 27% NO health gain 20% >0 but ≤0.1 QALY 25% >0.1 but ≤0.5 QALY 15% >0.5 but ≤1.0 QALY 13% >1 QALY Median 0.14 QALY; mean 0.59 QALY
    41. 41. HTA - Implications for Prescribers► Good prescribing cannot ignore cost► Cost-effectiveness is not about saving money► Why would you prescribe outwith guidance?  You don’t care! ►Why not? - it’s not your money!!  There are patient specific benefits not captured ►Are you sure? Why would they be omitted if real?  There are reasons to ‘push the boat out’ ►Good reasons? How would you justify if asked?
    42. 42. Do We Need to Redefine ‘Value’?► Licensing based on ‘risk:benefit’► Benefit is the impact on the disease  …easily measured in clinical trials► Value is the impact of ‘risk:benefit’ on the patient  …not easily measured in clinical trials  May well need ‘modelling’, use of surrogates etc  May not be measured in £££/€€€/$$$► Health economic modelling or value modelling?
    43. 43. Anti-Disease to Pro-Patient ► Anti-cancer ► Anti-retroviral ► Anti-infective ► Anti-fungal ► Anti-diabetic ► Anti-hypertensive ► Anti-inflammatory ► Where is the patient?
    44. 44. Medicine for Cancer or Patient? •Two medicines for the same cancer - outcome at 8 months – Medicine A - 30% reduction in primary tumour size; mean 12.5 kg weight loss, mean loss of 1.5 in performance status; mean 28 days as in-patient – Medicine B - 30% increase in primary tumour size; no change in mean weight; no change in performance status; mean 4 days as in-patient
    45. 45. The Paradigm Shift► NOT ‘how does the medicine impact the disease’  RECIST, viral load, CRP etc► BUT “how does the medicine impact the patient with the disease’  Perception of health  Functional abilities  Quality of life► The real value of a medicine (or anything else)
    46. 46. Value Assessment in Healthcare► Probably a necessary ‘evil’  The worst way apart from all the others!► Principles of health economics are sound  Clinically based  Far from ‘facile’, ‘simple’ or all about price  Aims to capture all benefits and true value► Money wasted in NHS helps no-one  … and deprives other patients of real benefits► Health economists (and friends) are human - they and their subject are not DISMAL!
    47. 47. Thomas Carlyle “That there should one man die ignorant who had capacity for knowledge, this I call a tragedy!” “The greatest of faults, I should say, is to be conscious of none!”
    48. 48. Oscar Wilde “It is always a silly thing to give advice, but to give good advice is fatal!” “Always forgive your enemies - nothing annoys them so much!!”
    49. 49. Thank You!

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