The National Institute for Clinical Excellence is the closest anyone has yet come to fulfilling the economist's dream of how priority-setting in health care should be conducted. It is transparent, evidence-based, seeks to balance efficiency with equity, and uses a cost-per-QALY benchmark as the focus for its decision-making. What more could anyone ask for? Well, experience has taught me that it is not uncommon for an-economist's-dream-come-true to be seen as a nightmare by everyone else.
Health care decision makers are becoming increasingly concerned with obtaining value for money and therefore with the use of economic evidence, particularly as a criterion for the reimbursement of new pharmaceuticals. There are a range of countries in which economic considerations have been introduced into the decision making process together with some of the associated policy applications.
• provide an historical background to modern pharmaceutical regulation; • summarise available data on the harm caused by medicines; • comment on treatment and prevention strategies; • provide an economic framework for assessing optimal levels of pharmaceutical safety.
The purpose of this book is to bring together a collection of papers by acknowledged experts in the field of trial-based health economic evaluation to provide an overview of the literature. The aim is to give the reader a clear guide to recent developments in statistical methods applied to health economic evaluation, together with the intuition behind the use of those methods, but without detailed technical exposition. The hope is that in doing so, interested readers will be guided to the most appropriate methodological contributions of recent years.
The papers in this book are based on the proceedings of a workshop jointly organised by the OHE and the King’s Fund and hosted by the King’s Fund on 1 March 2002.
The authors of the papers that make up this book were asked to address a specific question: ‘Ought NICE to have a threshold incremental cost-effectiveness ratio (ICER)?’ -with an implicit second question ‘Should the threshold be explicit?’
Disability-adjusted life years (DALYs) were introduced in 1993 amid the pages and policy directives of the World Development Report ‘Investing in Health’ (World Bank, 1993). DALYs are a measure of life years lost from disease, adjusted for assumptions about disability as well as the impact of age and future time. They were launched to widen the measurement of disease from the presence of morbidity and mortality, usually cited by the World Bank, to include the impact on disability in a commensurable way with mortality. The World Development Report was ground breaking for two reasons:
The second edition of this guide to economic evaluation is significantly extended. This mirrors the development of economic evaluation since the first edition was published in 1996. The methodology has developed and new techniques, both regarding costing and outcome measurement, have been introduced. Some concepts have, with the same arguments, been deleted or reduced in importance. The application of economic evaluation in decision making has also taken a step forward. This is manifested in the inclusion of a section on NICE.
The Secretary of State for Health has recently described health care as a form of ‘social investment’ which is ‘of instrumental importance in improving national economic performance’. This concern with economic productivity is shared by decision makers in other countries, where the impact of health care on workplace productivity has been specified as part of the economic analyses to be submitted in support of claims for the public reimbursement of pharmaceuticals.
International and UK experience illustrates the difficulty of involving the publica in health caare priority setting in ways that enable politicians, managers and doctors to incorporate public preferences into practical decision making.
Many techniques for measuring public preferences fail to incorporate key concepts:
opportunity cost. What are people prepared to give up or have less of, in order to have more of something else? The public have to be asked to make trade-offs;