Wednesday, 14 September 2011

Why say no? 2. Cost per QALY too high

Reminder: these opinions are my own, not those of SMC.

From the previous post, you will know I am exploring reasons why SMC said no in a calendar year covering 2010-11.  I was surprised to find the number one reason for saying no was that the company declined to submit any evidence, and that explained 21 of the 56 not recommended decisions (one submission did not include an economics case, so that makes 22 if we restrict attention to cost-effectiveness).

What was the next biggest problem for the 35 remaining?  Again, I was surprised (I am easily shocked, as you can tell!) because in 16 cases the submission either included a ‘base case’ cost per QALY that exceeded £30,000 or included a cost-minimisation analysis that showed the new medicine was not the cheapest option.

The SMC has always made clear that £30k per QALY is NOT an absolute cut-off.  If cost-effectiveness is to be taken seriously then everyone involved has to have an idea of what levels are broadly acceptable and which levels are less acceptable.  I think everyone involved in HTA committees would say this not a simple “above this figure bad, below this figure good” situation.  SMC has made a statement about the sorts of factors it will also consider alongside ‘cost per QALY’:
Having said that other factors have a role to play, it might be expected that they will carry more weight when the cost per QALY is £31k compared to £70k, in other words it seems likely there is a trade-off involved.

Of the 16 cases I mentioned, 14 were for cancer medicines, suggesting that companies were hoping the additional factors to be considered alongside cost per QALY would come into play.  On some occasions these did persuade SMC that a higher cost per QALY could be accepted – I do not have a figure for this, but my personal opinion would be that it would be less than 14 cases in a year, therefore I would conclude that a submission strategy of a high cost per QALY and hoping modifiers will be applied worked in less than half the cases during this period. 

As a footnote, only one submission during this time submitted a case where the new medicine was not the cheapest in a cost-minimisation analysis – picking up on the last point above, there is a world of difference between being a few pennies more expensive than the competition and being thousands of pounds more expensive.  For example, if a new medicine seems non-inferior on clinical criteria but the total cost over a lifetime is £800 whereas with the existing treatment it is £799, then my inclination is to say that in economics terms it is ‘non-inferior’ as well.  My inclination would then be to let the case past and leave local formularies to decide which to use.

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