Spotlight on OHE: Measuring Preferences, HTA Benchmarking, Value-Based Pricing, and Rationing

This post reviews OHE’s activities in September 2011 that contributed to advancing thought and stimulating innovative ideas in its three key research areas: financing and delivery of health care, HTA methods and processes, and the economics of the pharmaceutical and life sciences industries.

This post briefly reviews OHE’s September 2011 activities that contribute to advancing thought and stimulating innovative ideas in its three key research areas: financing and delivery of health care, the economics of the pharmaceutical and life sciences industries, and HTA methods and processes.

Financing and Delivery of Health Care

The EuroQol Group, founded in 1987, is a global network of experts that initiated and continues to develop the EQ-5D, a measure intended to generate a single index value for health status. The Group’s 28th annual Plenary Meeting was held in mid-September in Oxford. OHE’s Nancy Devlin, who currently serves as chair of the Group, discussed her research on time-trade off (TTO) measurement in a special session devoted to new findings from current research. In ‘TTO experiments: What did we try? What did we find?’, Nancy summarised the key results from a suite of studies in England, US, Canada, Argentina, Singapore, Spain, the Netherlands and China that were intended to explore particular aspects of the TTO methodology.

Koonal Shah presented a draft paper at the EuroQol Plenary. Co-authored with Nancy Devlin and Andrew Lloyd of Oxford Outcomes, the paper examines how participants respond in testing situations that are intended to elicit health preferences (time trade-off in particular). The paper investigates whether the nature and quality of valuation data are influenced by the processes participants use to arrive at the point of indifference in time trade-off tasks. The objective is to identify ways to improve the design of health state valuation studies.

Shah, K.K., Lloyd, A. and Devlin N. (2011) Participants’ responses to valuation tasks and implications for valuing EQ-5D-5L. Paper presented to the EuroQol Group Scientific Plenary Meeting, Said Business School, Oxford. 15-17 September.

Other papers presented at the EuroQol Plenary in which Nancy Devlin is involved were the following.

Mulhern, B., Tsuchiya, A., Rowen, D., Devlin, N., Bansback, N., Longworth, L. and Brazier, J. (2011) Health state valuation and mode of administration: Head to head comparison of one-line and computer assisted personal interviews. Paper presented to the EuroQol Group Scientific Plenary Meeting, Said Business School, Oxford. 15-17 September.

Tsuchiya, A., Mulhern, B., Buckingham, K. and Devlin, N. (2011) Testing lead time TTO in an online environment. Paper presented to the EuroQol Group Scientific Plenary Meeting, Said Business School, Oxford. 15-17 September.

Resource allocation decisions in health care become particularly difficult in challenging economies. Nancy Devlin and Koonal Shah each participated in the Conference on Health Care Rationing presented by the London School of Economics and Political Science. Nancy chaired the session that discussed a paper by Donald Franklin, a senior economic adviser at the UK Department of Health, entitled ‘Valuing the time of your life’. Koonal’s presentation reported the findings from an initial phase of a larger study that explores whether the general public agrees with NICE’s policy of giving a higher priority to life-extending treatments and the end of life.

Nancy Devlin participated in an interdisciplinary conference at the University of Cardiff on ‘Coma, consciousness and serious brain injury’. Her presentation, ‘Consciousness and coma: Challenges for health economics’, provided an overview of the economic perspective on resource allocation; considered the opportunity cost of maintaining life support for patients in a permanent vegetative state; and outlined the challenges in using conventional methods of measuring and valuing quality of life for the assessment of services for unconscious patients.

Economics of the Pharmaceutical and Life Sciences Industries

Adrian Towse was invited to The Regulatory Policy Institute (RPI) Annual Conference, which explored the trade-offs between complexity and simplicity in competition and regulatory policy. He participated in a session with George Yarrow, Chairman of the RPI, who presented his recent work on ‘prizes’ for innovation in the regulated energy sector. Adrian focused on new approaches to rewarding innovation in a quasi-regulated sector, pharmaceuticals. In particular, he discussed the use by payers of willingness-to-pay based cost-effectiveness thresholds as an efficient form of indirect pricing in third party payer systems and the use of ‘prizes’ to stimulate R&D in global health.

HTA Methods and Processes

Value-based pricing (VBP), due to be implemented in the UK for newly marketed medicines as from 2014, remains a key focus of OHE activities. At a seminar at the University of Birmingham, Jon Sussex explained the economic principles and rationale behind VBP, traced development of the policy in the UK to date, and outlined the range of options for how VBP in the UK might be designed.

At the 10^th Annual Pricing and Reimbursement Conference in London, Adrian Towse presented an overview of the objectives of the coming UK VBP system and reviewed evidence of the impact of existing VBP mechanisms in other countries.

HTA in emerging markets was the focus of a satellite symposium at the third ISPOR Latin American Conference. With Lou Garrison, University of Washington, Adrian Towse presented the findings of a study by the Office of Health Economics and Veritech. Adrian presented the study’s key conclusions about the interaction between the evolution of health systems and the development of HTA. He argued that as countries develop HTA capability, they should address ‘macro’ issues of health system inefficiency such as the role of generic medicines, perverse incentives, and work force issues as well as ‘micro’ issues of evaluating products and applying clinical practice guidelines.

Applying HTA in decision making is an area of study in which OHE long has been involved. Adrian Towse chaired and facilitated the second day of a workshop held by the Centre for Innovation in Regulatory Science, ‘Understanding HTA and coverage decision-making processes: The key to facilitating transparent access to medicines’. The day explored the perspectives of key stakeholders on the value of benchmarking activities of HTA bodies and identified lessons that might be learned from benchmarking the work of drug regulatory authorities.