Health economics

As the demand for new healthcare technologies continues to grow, healthcare systems worldwide are under pressure to contain escalating costs. The inevitable impact on pharmaceutical companies is an increasing requirement to demonstrate value for money for their products. Consequently, evidence of economic impact has become an essential part of a product's credentials to:

• Achieve an optimal price
• Obtain reimbursement
• Secure a formulary place
• Support product positioning

The complexity of generating economic evidence relevant for different stakeholders in different health care settings requires a multidisciplinary approach to study design, execution, analysis and communication of findings. This presents many challenges as consideration has to be given to different national health technology assessment requirements and/or re-imbursement guidelines, including the correct metric for presenting evidence. Other factors that have to be taken into account include potential differences in the demography and epidemiology of disease, treatment practices, healthcare delivery and the cost of healthcare resources.

Data for economic analyses can be generated from a variety of study methodologies, each presenting diverse challenges. For example a growing number of Phase III trials now include economic end points and conducting analyses alongside clinical studies is considered desirable as they provide timely information with high internal validity. Some key challenges in design however include:

• An adequate sample size to evaluate differences in economic endpoints
• A trial population which is more representative of the heterogeneity of patient groups in clinical practice
• A time horizon which properly reflects the impact of the intervention
• A comparator which is relevant to clinical practice
• Identifying resource use that is protocol driven so an adjustment can be made during subsequent analyses

If consideration is given to these methodological issues and other aspects of study design, analysis and reporting, clinical trials are able to provide a credible source of data.

Other study designs frequently used to collect data for economic analyses include:

• Registries
• Retrospective or prospective observational studies
• Phase IV studies

There are several different types of economic evaluation being performed but the most frequent analysis used to demonstrate product value is 'cost effectiveness'. This can be defined as the ratio of the net change in health care costs to the net change in health outcomes. A commonly used metric to report such findings is the cost per quality adjusted life year (QALY). This is favoured by decision makers in many countries as it has the advantage of incorporating changes in both quantity (mortality) and quality (morbidity) of life. It can also be used to compare products in the same indication area as well as assessing interventions in different therapeutic areas.

Other types of economic evaluations being performed include:

• Burden of disease
• Cost minimisation
• Cost benefit
• Budget impact

The range of information required to perform economic evaluations include:

• Identification of all main event pathways that have distinct resource implications or outcome values associated with them
• Estimation of the probabilities associated with main event pathways
• Descriptive data to enable the resource consequences associated with each pathway to be measured
• Descriptive data to enable the outcomes associated with each pathway to be valued
• Data on health related quality of life

Methodological approaches and regulatory guidelines will continue to evolve as the needs of health care decision makers become more demanding and sophisticated.

The PACE group has a respected team of health economic professionals and an international network of senior consultants to provide input to study design and local requirements for international studies. To discuss your health economic study requirement, contact the PACE Group.