Health technology assessments (HTA) – and use of health economic analyses to evaluate drugs

LMI Policy document.

  • LMI is in favour of using HTA in the health sector.
  • HTA must be carried out in transparent processes against a background of agreed guidelines.
  • HTA must not be an obstacle that delays patients' access to new, innovative drugs
  • Financing must be secured for drugs that are recommended as a result of an HTA process

Health technology assessment
Health technology assessment (HTA) is a process that involves medical, financial, social and ethical evaluation of the use of a medical method. HTA used on drugs will entail assessing clinical efficacy, cost-effectiveness and broader consequences for patients, the health service and the community in general. An HTA process in the area of pharmaceuticals should help the authorities to make the correct decisions regarding the use and financing of drugs.

The purpose of the cost/benefit analyses of that the industry undertakes to append to reimbursement applications is to demonstrate the cost-effectiveness of a new treatment compared with the established treatment. An assessment of the relative efficacy of different drugs forms a central part of the authorities' assessments regarding the reimbursement status of a drug.

The terms health economics/pharmaceutical economics and HTA are often used interchangeably. The health economics processes carried out by the Norwegian Medicines Agency contain elements of HTA, but cannot really be called complete HTA processes. A complete HTA process should take the overarching social perspective - and it is upon this perspective that the authorities should base an assessment of the reimbursement status of drugs.

LMI recognises the use of HTA in connection with reimbursement/financing decisions
Because the pharmaceuticals market is characterised by third-party financing and asymmetric information, LMI recognises that government regulation is necessary. LMI also recognises the use of HTA, including economic analyses, in the work of determining the reimbursement status of drugs in Norway. Economic analyses have been mandatory in connection with applications for reimbursement in Norway since 2002, and are a key factor underlying the authorities' decisions regarding pricing and reimbursement for drugs in a number of European countries.

Health economics evaluations must not only take into account direct costs and effects, but also indirect effects such as productivity gains. The Medicines Agency's guidelines for applications for reimbursement allow for this. This is essential for avoiding undesirable "silo thinking" which causes the social perspective of the analyses to be lost.

LMI understands that the authorities wish to promote the use of the most cost-effective drugs on the market. However, in the work of evaluating health economic analyses and in the focus on cost-effectiveness, one must not forget considerations such as:

  • identifying the drugs that are of GREATEST BENEFIT to the patients
  • assuring the general public of RAPID ACCESS to these medicines
  • assuring the AVAILABILITY of several alternative medicines
  • valuing INNOVATION which gives added therapeutic value to patients

There is broad agreement on these considerations among European authorities.

The placing of value on innovation is critical for enabling a pharmaceuticals market to develop new and better drugs. Innovation in the pharmaceuticals market tends to come in small steps - small improvements for large or small patient groups. Innovation may be valued in a number of ways - through pricing, assuring turnover volume, therapeutic guidelines and effective access to the market.

Guidelines and transparent processes
Health economics analyses must be carried out against a backdrop of agreed guidelines based in health economics environments. The analyses must be assessed in transparent, balanced and open processes. The processes surrounding health economics analyses must include the pharmaceutical industry, medical and heath economics expertise and the patients. Thus the Blue Prescription Board plays an important supporting role in the Norwegian Medicines Agency's case processing, and in some processes, for example in connection with review of reimbursement status, it will be natural to circulate cases to the parties concerned for comment.

Handling of uncertainty in health economics analyses - temporary reimbursement
There will always be uncertainty associated with health economics analyses. Decision-makers should show flexibility in the handling of uncertainty, and act in a risk neutral manner so that the uncertainty in itself does not become the deciding factor for the outcome of a health economics assessment.

In some cases it will not be possible to document the cost-effectiveness of a drug before it has been on the market for a while. This is because parts of the studies must be done in real life. In cases where there is limited documentation on cost-effectiveness, temporary financing schemes should be established in anticipation of - and conditional on - the provision of new and better documentation. It is important that extensive HTA processes do not substantially delay patients' access to new, innovative drugs. There will always be uncertainty, and regular revisions of documentation are therefore justified.

Drugs that are found through an HTA process to be cost-effective must be assured of financing, also drugs that are charged to hospital budgets. The so-called "bagatelle limit" for budgetary influence on the pharmaceuticals budget which prevents the Norwegian Medicines Agency from making a decision on reimbursement status should be abolished or substantially increased. Spending on drugs must be regarded as an investment that yields returns for both patient and society - not purely as an expense item.

Further use of health economics analyses
At present drugs are in a special position as an input factor in the health service with respect to the need to document cost-effectiveness. As a result there is a risk of attaching more stringent requirements to using drugs than to other input factors in the sector. Health economics analyses should gradually be applied to a broader field of treatment options - not just drugs. Where priority has to be established between drugs and other input factors, an HTA process should be required to apply the overarching social perspective to these resources as well.

Continued distinction between approval procedures and health economics analyses
The use of health economics analyses to assess cost-effectiveness must continue to be a process that is kept separate from approval of the drug - where efficacy, safety and quality are assessed.