Using economic evaluations for drug reimbursement decisions - what have we achieved?

February 10, 2012, University of York

Researchers at the University of York perform evaluations of the clinical and cost-effectiveness of drugs for the National Institute for Health and Clinical Excellence (NICE).

A new report by Professor Mike Drummond of the University’s Centre for Health Economics assesses the actual impact of the research.

Professor Drummond reflects on the global development of ‘economics‐based reimbursement’ over the past 20 years and examines the evidence to determine the impact of economic evaluation on the pricing and reimbursement processes.

He finds evidence of a number of beneficial changes in reimbursement processes, including the measurement of more meaningful clinical endpoints and increased engagement between manufacturers, drug regulators and payers.

A consistent finding across studies of reimbursement decisions is that economic considerations have been influential, second only to the strength of the clinical evidence for the drug of interest.

Overall, the impact of economic evaluation on the allocation of healthcare resources is hard to ascertain because of the difficulties in specifying what would have happened otherwise. Also little is known about the extent to which reimbursement decisions actually lead to changes in healthcare practice. However, there is evidence that economic evaluation has assisted price negotiations and enabled reimbursement agencies to target drugs at those patients most likely to benefit.

Professor Drummond concludes: “The increasingly high prices of many new drugs particularly in areas such as cancer, and the incremental rather than substantial improvements in health gain that many of these products deliver, have made economic considerations key.

“In publicly financed healthcare systems, basing the pricing and reimbursement of drugs on explicit consideration of costs and benefits has moved us closer to a more efficient and equitable allocation of resources and one that is more reflective of our collective ‘willingness to pay’.”

Explore further: New drugs should be compared with existing treatments before approval, say experts

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