Why has the use of health economic evaluation in Japan lagged behind that in other developed countries?

The aging population and the increasing availability of new medical technologies, particularly pharmaceuticals, have led to growing pressure on governments worldwide to contain healthcare costs. Increasingly, economic evaluation is used to aid decisions on the reimbursement and formulary access of drugs, and pharmaceutical companies are often required to demonstrate the cost effectiveness of their products. Canada and the UK are examples of countries that have successfully incorporated mandatory requirements for economic evaluations into the decision-making process in healthcare. Japan faces cost-containment issues for its health and welfare system similar to those seen elsewhere in the world. Despite this, economic assessments are not currently used in the allocation of drug budgets. Reasons why economic evaluations for healthcare have not yet been used routinely in Japan include governmental approaches to healthcare cost containment, the pricing of pharmaceuticals, the organisation of the healthcare system, attitudes of the medical profession, and limited knowledge and expertise. However, small but encouraging steps are now being taken towards the introduction of economic evaluations in Japanese medicine.     

Economic evaluations of healthcare programmes and decision making: the influence of economic evaluations on different healthcare decision-making levels

Given the potential role of economic information in healthcare decision making, it is of interest to assess its influence on decisions at a national or regional level (macro level), at a healthcare facility level (meso level) and at the healthcare provider level (micro level). This literature review summarises 36 empirical studies that examined the influence of economic evaluations on these three healthcare decision-making levels. Economic evaluations are considered useful and important; however, their direct influence on decision making (instrumental use) is moderate, especially at the macro and micro levels. A major influence was observed at the meso level, leading to the conclusion that economic evaluations have the most pronounced influence on decision making within healthcare organisations. However, unexpectedly, our literature search did not reveal an empirical study analysing the considerable influence of economic evaluations on decisions by the National Institute of Health and Clinical Excellence in the UK. Our findings indicate that results of economic evaluations cannot be considered the dominant decision criterion for healthcare decision makers at either the macro, meso or micro levels. Enlightenment use (where scientific evidence provides a background of information, ideas and concepts that affect the way policy makers view problems and solutions) of economic evaluations in decision making remains to be proven.     

Reconciliation of economic concerns and health policy: illustration of an equity adjustment procedure using proportional shortfall

Economic evaluations have become an important and much used tool in aiding decision makers in deciding on reimbursement or implementation of new healthcare technologies. Nevertheless, the impact of economic evaluations on reimbursement decisions has been modest; results of economic evaluations do not have a good record in predicting funding decisions. This is usually explained in terms of fairness; there is increasing awareness that valuations of QALYs may differ when the QALYs accrue to different patients. The problem, however, is that these equity concerns often remain implicit, and therefore frustrate explicitness and transparency in evidence-based decision making. It has been suggested that a so-called equity adjustment procedure may (partially) solve this problem. Typically this would involve the application of so-called equity weights, which can be used to recalculate the value of QALY gains for different patients. This paper explores such an equity adjustment procedure, using the equity concept of proportional shortfall. Proportional shortfall assumes that measurement of inequalities in health should concentrate on the fraction of QALYs that people lose relative to their remaining life expectancy, and not on the absolute number of QALYs lost or gained. It is the ratio of QALYs lost over the QALYs remaining. This equity concept combines elements of two popular but conflicting notions of equity: fair innings and severity-of-illness.We applied the concept of proportional shortfall to ten conditions and tentatively explored how an equity adjustment procedure using proportional shortfall might affect priority setting. Our equity adjustment procedure lowered the cost-effectiveness threshold when a condition was relatively mild. Because the proportional shortfall caused by the ten conditions differed considerably, the equity-adjustment procedure discriminated strongly between the ten conditions, and this experiment provided a good opportunity to explore the impact of equity adjustment for healthcare reimbursement decisions. In conclusion, our results suggest that equity can be measured and that integration of equity concerns into an economic evaluation improves the fit between economic models and reimbursement decisions. It is recommended that cost-effectiveness driven health policy systems consider equity adjustments.     

Applications of modelling studies

There is increasing use of economic evaluation to support decision-makers in health services for allocation of scarce healthcare resources. However, information necessary for economic evaluations cannot always be derived from well-conducted prospective clinical studies, and decision-analytical models can be used to provide some of the missing information. A number of applications of decision-analytical models are discussed, including submissions to authorities for reimbursement purposes, pharmacoeconomic programme development, portfolio investment decisions, marketing and communication strategies, and applications in disease management.     

Economic evaluation of pharmaceuticals: a European perspective

In recent years there has been a large increase in the number of economic evaluations of pharmaceuticals. Many of these studies have been commissioned by individual pharmaceutical companies, in support of new or existing products. In 2 countries, Australia and Canada (in the province of Ontario), draft guidelines issued by the government have outlined the requirements for economic evaluations to be submitted in support of requests for reimbursement (government subsidy) of particular products. One consequence of the guidelines is that they clarify what is required, and in specifying the procedure for submission of dossiers, identify a clear audience for the economic evaluation. In contrast, the situation in Europe is diverse. A wide range of healthcare systems exist, including national health services and more liberal systems, involving a wide range of insurers and providers. European countries also differ widely in their approach to the pricing and reimbursement of pharmaceuticals. Because of this diversity, the nature, conduct and impact of economic evaluation in Europe is not clear. It is therefore difficult for pharmaceutical companies to develop appropriate strategies for economic evaluation and for analysts to decide on appropriate study methodology. This article reviews the nature of any official guidance or requirements for economic evaluation, the potential for use of economic evaluation, the range of studies carried out and the identifiable impacts. There is currently no official guidance in any country, although some countries are considering issuing guidelines. In some countries there is official encouragement to pharmaceutical companies to undertake studies, and where economic data have been presented they have been considered by the relevant committees. The potential uses of economic evaluation vary widely from country to country. These can be classified in terms of a potential role in undertaking national price negotiations, deciding on reimbursement status or copayment level, deciding on inclusion in local formularies or in treatment guidelines, or in improving prescribing decisions. Approximately 80 economic evaluations of pharmaceutical products have been conducted to date in Europe, covering a wide range of clinical areas. There are relatively few examples of identifiable effects of such studies. In part this is because it is often difficult to assess the part played by various items of data. Nevertheless, the overriding conclusion is that economic evaluation of medicines is likely to be more relevant in Europe in the future. The problem for the pharmaceutical industry is in determining when and how.     

Emerging role of pharmacoeconomics in the research and development decision-making process

OBJECTIVES: This study examines the organisational structure of pharmacoeconomics departments in major pharmaceutical and biotechnology companies, the impediments to optimal use of pharmacoeconomic evaluations by companies and the integration of pharmacoeconomic analysis with research and development decision making. DATA AND METHODS: The heads of the pharmacoeconomics departments of 40 companies were surveyed on the structure of pharmacoeconomics departments in their companies, the roles that pharmacoeconomic analyses are playing in the new drug development decision-making process, and the initiation of pharmacoeconomic studies during the development process for a random sample of their companies' investigational new drugs. RESULTS: 45 department heads from 31 parent companies responded to the survey. The pharmacoeconomics function in pharmaceutical and biotechnology companies is relatively new and growing rapidly. Most pharmacoeconomics department heads preferred a different reporting structure than what they currently have and indicated that the strategic role that pharmacoeconomics can play is not well understood within the organisation. Pharmacoeconomic analyses have been increasingly initiated early in clinical development and have been a factor in clinical trial design and in key decisions made during the development process. CONCLUSIONS: Given the continued emphasis on containing healthcare costs worldwide, demand will increase for evidence that drugs provide good value for the money spent on them. Companies will likely respond not only with more economic evaluations for purchasers, but also with greater use of pharmacoeconomics early in the development process to aid in rationalising key research and development decisions, and in guiding final pricing decisions and reimbursement planning, thereby improving resource allocations.     

Introducing economic evaluation as a policy tool in Korea: will decision makers get quality information? : a critical review of published Korean economic evaluations

Interest in the use of economic evaluations in Korea as an aid for healthcare decision makers has been growing rapidly since the financial crisis of the Korean National Health Insurance fund and the separation in 2000 of the roles of prescribing and dispensing drugs. The Korean Health Insurance Review Agency (HIRA) is considering making it mandatory for pharmaceutical companies to submit the results of an economic evaluation when demanding reimbursement of new pharmaceuticals. The usefulness of the results of economic evaluations depends highly on the quality of the studies. The purpose of this paper, therefore, is to provide a critical review of economic evaluations of healthcare technologies published in the Korean context.Our results show that many studies did not meet international standards. Study designs were suboptimal, study perspectives and types were often stated incompletely, time periods were often too short, and outcome measures were often less than ideal. In addition, some articles did not distinguish between measurement and valuation of resource use. Capital, overhead and productivity costs were often omitted. Only half of the studies performed sensitivity analyses.In order to further rationalise resource allocation in the Korean healthcare sector, the quality of the information provided through economic evaluations needs to improve. Developing clear guidelines and educating and training researchers in performing economic evaluations is necessary.     

Applied pharmacoeconomics. When can publication be legitimately withheld?

Pharmacoeconomic studies can help decision-makers choose the most efficient drug treatments in our internationally cost-constrained healthcare environment. However, perceptions of bias about the nature of many economic evaluations limit the usefulness of pharmacoeconomic data to decision-makers. In an effort to increase the credibility of pharmacoeconomic studies, several groups have developed methodological guidelines, and one has developed ethical guidelines for these evaluations. In this article, we evaluate issues related to the publication of the results of pharmacoeconomic studies. Pharmacoeconomics is a true science (and should be so treated), rather than a form of marketing. Pharmacoeconomic studies must undergo the same peer review process and be published in serious research journals, as are other types of scientific investigations. Investigators should attempt to publish the results of pharmacoeconomic studies, even (and, perhaps, especially) when the results are not favourable to the sponsor. However, there are acceptable reasons to withhold publication of 'negative' results. For example, when methodological problems plague a study, or when the study addresses an investigational drug not likely to be approved, then researchers are justified in giving up on publication, if they so choose. Similarly, feasibility studies to test methods of data collection or analyses conducted very early in the drug development process need not always be published. Nonetheless, access to all important investigations--regardless of whether the results are positive or negative--will become more important as healthcare becomes more evidence-based, as decisions have impact on large populations of people, and as those in charge of formularies actually begin to use cost-effectiveness analysis to help make choices among competing drugs.     

Analysis sans frontières: can we ever make economic evaluations generalisable across jurisdictions?

Over the last decade or so, a number of healthcare systems have used economic evaluations as a formal input into decisions about the coverage or reimbursement of new healthcare interventions. This change in the policy landscape has placed some important demands on the design and characteristics of economic evaluation and these are increasingly evident in studies being presented to decision makers. One challenge has been to make studies specific to the context in which the decision is being taken. This is because of the inevitable geographical variation in many of the parameters within an analysis. There has been a series of important contributions to the published literature in recent years on how to quantify geographical heterogeneity within economic analyses based on randomised controlled trials. However, there are good reasons for economic evaluation for decision making to be undertaken using methods of evidence synthesis and decision analytical modelling, but issues of geographical variation still need to be handled appropriately. The key requirements of economic evaluations for decision making within healthcare systems can be defined as follows: (i) a design that meets the objectives and constraints of the healthcare system; (ii) coherent and complete specification of the decision problem; (iii) inclusion of all relevant evidence; and (iv) recognition and appropriate handling of uncertainty. In satisfying these requirements, it is important to be aware of variation between jurisdictions, and this imposes some important analytical requirements on economic studies. While many agencies have produced guidelines on preferred methods for healthcare economic evaluation, these exhibit considerable variation. Some of this variation can be justified by genuine differences between systems in clinical practice, objectives and constraints, while some of the variation relates to differences of opinion about appropriate analysis given methodological uncertainty. However, some of the variation in guidance is difficult to justify and is inconsistent with the aims and objectives of the systems the analyses are seeking to inform. Decision makers and analysts need to work together to streamline and where possible harmonise guidelines on methods for economic evaluations, whilst recognising legitimate variation in the needs of different healthcare systems. Otherwise, there is the risk that scarce resources will be wasted in producing country-specific analyses in situations where these are not justified. Expected value of information analyses are also emerging as a tool that could be considered by decision makers to guide their policy on the acceptance or non-acceptance of data from other jurisdictions.     

Health economic evaluation of non-melanoma skin cancer and actinic keratosis

Non-melanoma skin cancer (NMSC) and actinic keratosis are becoming an increasingly important healthcare problem. There are approximately 1 million cases of NMSC in the US each year, primarily basal cell carcinomas, and the incidence is increasing. Although NMSC is significant in terms of both health risk and the resource implications for treatment within healthcare systems, our understanding of the health economics of NMSC is limited. The purpose of this article was to systematically review and assess published health economic studies of the treatment of NMSC and actinic keratosis, taking into consideration key aspects of guidelines set by drug purchasers and key reimbursement agencies, and to provide recommendations for appropriate modelling approaches and data collection for health economic studies of NMSC and actinic keratosis. We systematically reviewed the published literature from 1965 to 2003 for health economic evaluations of treatments of NMSC and actinic keratosis using the search terms: ('skin cancer' or 'non melanoma skin cancer' or 'basal cell carcinoma' or 'actinic keratosis') and ('decision model' or 'decision theoretic' or 'decision analytic' or 'health economic' or 'cost effective'). Studies using one of the following methodologies were included: cost-effectiveness, cost-benefit, cost-utility, cost-minimisation, cost-of-illness, cost-consequence, and treatment cost analysis. We identified eight studies evaluating NMSC. One of these studies also evaluated actinic keratosis. Although several studies satisfied some of the basic requirements of health economic evaluations, the majority had serious shortcomings that limit their usefulness. There are a few high-quality health economic evaluations assessing treatments for NMSC or actinic keratosis. However, our analysis suggests that additional data on treatment practice patterns and epidemiology need to be collected, and incorporated with efficacy and safety data in a formal decision-analytic framework to assist decision makers in allocating scarce healthcare resources.     

Information barriers to the implementation of economic evaluations in Japan

With increasing cost-containment pressures within healthcare systems worldwide, economic evaluations of medical technologies, particularly pharmaceuticals, are used to aid the allocation of expenditure and resources. Facing similar pressures, Japan will probably also introduce economic evaluation of health technology. However, the structure of the healthcare system in Japan does not lend itself naturally to the collection of the epidemiological and cost data required for economic evaluations in medicine. In addition, there are no formal methodological guidelines in place for these analyses. To overcome these information barriers in Japan, progress may be aided by the adoption of approaches used in other countries for data collection and guideline development.     

Pricing and reimbursement of pharmaceuticals in Belgium

The Belgian healthcare system has a tradition of access and equity at affordable prices. As in other countries, the system becomes pressured by increasing healthcare costs. This paper describes the actual situation in Belgium with special focus on pharmaceutical products and the potential role of pharmacoeconomics in decision making on price and reimbursement. Nearly all people in Belgium are covered by compulsory health insurance. The system is paid for by social security, the patients and the federal and regional authorities. The part of the consumption of pharmaceuticals that is charged to insurance was about 62.1 billion Belgian francs (BeF), i.e. about 50% of the pharmaceutical market in 1994. Price setting in Belgium has been rather low due to the positive reimbursement list, where the price of a new drug is compared to existing drugs in a comparable therapeutic class (so-called reimbursement criteria). The expenditure on pharmaceuticals is increasing faster than global funding for public health. In order to control drug budgets, different cost-containment measures have been or are being taken, i.e. a mix of price, reimbursement and volume controls. These cost-containment measures are not necessarily in accordance with a health economic approach. This paper suggests the scope for better implementation of pharmacoeconomic evaluation, which can lead to more flexible reimbursement systems in specific indications. Therefore, a formal recognition of the role of objective economic evaluations is needed for both hospital and ambulatory care. This process should be proceeded by improving the understanding and robustness of pharmacoeconomic evaluations.     

Economics of atypical antipsychotics in bipolar disorder: a review of the literature

Economic evaluations are increasingly being used by policy makers to evaluate the relative costs and benefits of healthcare interventions. These analyses provide economic and clinical evidence to decision makers seeking to make recommendations on treatment alternatives for patients. This article describes the economic evidence on the atypical antipsychotics currently approved for the treatment of bipolar disorder. This area remains under-researched. A literature search identified only six relevant studies of atypical antipsychotics in bipolar disorder: two retrospective database analyses, three economic analyses alongside clinical trials and one cost-effectiveness analysis. Based on the limited available studies, there appears to be no significant difference in healthcare resource use between olanzapine, quetiapine, risperidone and valproate semisodium (divalproex sodium; an antiepileptic drug and a standard treatment for mania associated with bipolar disorder). While a cost-effectiveness study for the UK found haloperidol (a conventional antipsychotic) to be more cost effective than atypical antipsychotics, these results must be considered with caution because of the non-inclusion of adverse effects in the model. No economic data are available for aripiprazole, clozapine or ziprasidone in bipolar disorder. Until more economic evidence becomes available, the economic implications of atypical antipsychotic treatment in patients with bipolar disorder are unlikely to significantly impact on prescribing and treatment patterns. Future economic studies evaluating atypical antipsychotics in bipolar disorder should address the issue of long-term costs and effectiveness to reflect the chronic nature of the disease, the variety of health states that patients may experience and the range of treatments they may receive. A better understanding of the complex interplay between effectiveness, safety, quality of life, adherence and resource use should ultimately contribute to improving the treatment of bipolar disorder.     

Integer/linear mathematical programming models: a tool for allocating healthcare resources

In today's environment, the demand for efficient healthcare resource allocation is increasing. As new technologies become available, allocation decisions become more complex and tools to assist decision makers in determining efficient allocations of healthcare resources are encouraged. Mathematical programs have multiple properties that are desirable for healthcare decision makers such as the simultaneous consideration of multiple constraints and a built-in sensitivity analysis. These models have been well researched and are considered invaluable in other industries. Mathematical programming has also become increasingly visible in facilitating the allocation of healthcare resources in the health services research sector. However, the use of mathematical programming tools has been limited in economic evaluations of new technologies. Budget allocations, such as formulary, drug development, and pricing decisions may benefit greatly from the use of mathematical programs. As an increasing number of expensive new technologies become available and pressure grows to contain healthcare costs, these tools may help guide a more efficient allocation of resources for technologies under budgetary and other constraints.     

Common errors and controversies in pharmacoeconomic analyses

The need to demonstrate the cost effectiveness of healthcare interventions has led to a rapid increase in the use of economic tools within pharmaceutical evaluations. Pharmacoeconomics is employed at many stages of the evaluation process, helping to predict which products are likely to be economically viable at an early stage, and providing information to aid price and reimbursement negotiations as well as formulary and purchasing decisions in conjunction with phase III and IV clinical trials. The ability of economic evaluations to accurately determine the best use of society's scarce resources, however, is strongly influenced by the existence of areas of confusion, controversy and dispute which hinder the researcher at every step. A good economic evaluation requires a number of ingredients including: (i) relevant, good quality clinical data, raising issues of trial design, sample size and perspective; (ii) relevant costs and outcomes, measured, valued and discounted credibly and accurately; (iii) appropriate methods of data analysis (statistical, incremental and sensitivity); and, once the trial is over, (iv) presentation of the results in a way which maximises the generalisability of the results and, hence, the usefulness of the research. None of these areas are trouble-free but with understanding and openness, mistakes can be minimised.     

Cost-Utility Analysis of Methadone Maintenance Treatment: A Methodological Approach

Economic considerations influence the substance user treatment system. These considerations influence who gets treatment and for how long, as well as determining what services they receive and in what setting. Current medical literature argues that maintenance treatment reduces risk-taking behavior, such as injection drug use and needle sharing. Treatment also reduces the mortality associated with abuse of opiates by injection and can cause decreases in costs incurred by the criminal justice system and social services agencies. This suggests the need for complex economic evaluations of a maintenance treatment to find out the optimum treatment program. This paper describes methods of economic evaluation in healthcare and reviews the methodology of cost–utility analysis in economic evaluations of methadone maintenance treatment.     

Economic evaluation of drug abuse treatment and HIV prevention programs in pregnant women: a systematic review

Drug abuse and transmission of HIV during pregnancy are public health problems that adversely affect pregnant women, their children and surrounding communities. Programs that address this vulnerable population have the ability to be cost-effective due to resulting cost savings for mother, child and society. Economic evaluations of programs that address these issues are an important tool to better understand the costs of services and create sustainable healthcare systems. This study critically examined economic evaluations of drug abuse treatment and HIV prevention programs in pregnant women. A systematic review was conducted using the criteria recommended by the Panel on Cost-Effectiveness in Health and Medicine and the British Medical Journal (BMJ) checklist for economic evaluations. The search identified 6 economic studies assessing drug abuse treatment for pregnant women, and 12 economic studies assessing programs that focus on prevention of mother-to-child transmission (PMTCT) of HIV. Results show that many programs for drug abuse treatment and PMTCT among pregnant women are cost-effective or even cost-saving. This study identified several shortcomings in methodology and lack of standardization of current economic evaluations. Efforts to address methodological challenges will help make future studies more comparable and have more influence on policy makers, clinicians and the public.     

Economic evaluation of osteoarthritis treatment in Europe

Osteoarthritis is one of the leading causes of disability. Among the available treatments, NSAIDs are the most common. The present paper reviews economic studies conducted in the last five years on the treatment of osteoarthritis in Europe. The majority focus on NSAID therapy, mainly comparing COX2-specific inhibitors against COX non-specific inhibitors. The reviewed studies estimate healthcare costs only. The final results indicate that, owing to the lower incidence of adverse events, COX2-specific inhibitors should now dominate over traditional NSAIDs. However, the differences found in the methods used to measure costs suggest that results should be interpreted with caution. To estimate costs, authors used diverse values that were not always consistent with the studies’ perspective. Furthermore, many did not report resource consumption patterns, making comparisons among the studies difficult, as economic results are influenced by the price/charging policies of different countries. Economic evaluations have the potential to affect health policy by assisting the ranking and prioritisation obligations of decision makers. In this context, it is important to meet strict methodological guidelines.     

Economic evaluation of osteoarthritis treatment in Europe

Osteoarthritis is one of the leading causes of disability. Among the available treatments, NSAIDs are the most common. The present paper reviews economic studies conducted in the last five years on the treatment of osteoarthritis in Europe. The majority focus on NSAID therapy, mainly comparing COX2-specific inhibitors against COX non-specific inhibitors. The reviewed studies estimate healthcare costs only. The final results indicate that, owing to the lower incidence of adverse events, COX2-specific inhibitors should now dominate over traditional NSAIDs. However, the differences found in the methods used to measure costs suggest that results should be interpreted with caution. To estimate costs, authors used diverse values that were not always consistent with the studies' perspective. Furthermore, many did not report resource consumption patterns, making comparisons among the studies difficult, as economic results are influenced by the price/charging policies of different countries. Economic evaluations have the potential to affect health policy by assisting the ranking and prioritisation obligations of decision makers. In this context, it is important to meet strict methodological guidelines.