GUEST EDITORIAL ....,.tI'>OCoE~6(6) 4Q3-497. 1994 Il;ro.l~r<141001 2{101Q3Iso:1 · 00/O

Guidelines for Pharmacoeconomic Studies The Ways Forward

Michael F. Drul1IltIolld

Centre for Health Economics, University o f York, York, England

There is currently considerable di sc ussion about guidelines for the provi sion of economic data in support of applicat ions for reimbursement (public subsidy) of pharmaceuticals and other heal th tech­nologies (hereafter referred to as 'guideli nes') . I n AUSlralia, the provision of cost-effectiveness data in su ppo rt of reimbursement applicat ions has been mandatory since January 1993, and the Australian Pharmaceutical Benefits Advisory Committee (PBAC) guideli nes are current ly under review.

In the US. the Task Force on Principles for Eco­nomic Ana lys is, establi shed by the Leonard Davis institute of the University of Philade lph ia, was due 10 report in the au tumn of 1994 (A .L. Hillman, per­sonal communication). in addition, expert panels have been convened, by the Office of Disease Pre­vention and Health Promotion and the Centers for Disease Control , to discuss the methodology of economic eva luations (G. W. Torrance, persona l communication). In Canada, a set o f draft guide­li ne s has been issued following a collaborat ive workshop held in 1993.1 1 I

Withi n Europe, the European Union has estab­lished a concerted <lction to ex plore the harmonisa­tion by consensus of the methodology for economic evaluation of health techllologies.l 21 Although the arrangement s for pricing and reimbursement of pharmaceuticals vary great ly from one country to another,l31 a n umber of governments arc known to be considering guidelines for pharmacoeconomic studies. often in consu lt<ltion with their national ph<lrm<lceutical indust ry associati on.

Given the c urrent level of debate surrounding

such guidelines. it is time to take stock. This article describes the various p<l rties with a stake in guide­lines for the provision of economic data. reviews the purposes served by s uch guideli nes and sug­gests ways fo rward .

1. Who Has a Stake in Guidelines?

The most obvious parties with a stake in g uide­li nes are government and industry. From the gov­ernment's point of view, guidelines might be con­sidered useful as a way o f controlli ng expenditure on pharmaceuticals, or e nsuring that funds are spent in the best possible way. From the industry's perspective. mandato ry cost-effectiveness guide­lines might constitute <I 'fourth hurdle' to be nego­ti ated after demonstrating efficacy. safety a nd qual­ity of manufacture. Such guide lines may therefore impose additional costs or delays on the drug de­velopment process.

However. government and industry arc not the only part ies with a stake in guidelines. Researchers may have an interest in guidelines because they may hel p to clarify what is really required in un­dertaking pharmacoeconomic studi es. This may fa­cilitate discussions with potential research spon­sors and, if appropriate ly devised. guideli nes may help maintain methodological standards.HI

Finally. healthcare decision makers. be they phannacisls, fonnu lary managers or individual pre­scribers, have an interest in guidelines si nce they may find il reassuring that the provision of cost­e ffectiveness data about pharmaceutica ls is to

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somceXICni regulated. The same could al so be said for patients in situalions where they purchase their own medicat ion. Decision makers are bombarded by info rmat ion from a multitude of sources and have neither the time nor the resources techeck the methodology of every study.

2. What are the Purposes Served by Guidelines?

As activity surrounding the production of guide­lines has grown, so has the debate about w hether or not they are a welcome dcveiopmenl.15J In inter­preting this debate, it is important to recognise that guideli nes can serve a number of purposes. First, as in Australia. they can be linked to a fonna l re­quirement to provide economic data before reim­burse ment of med icines is approved. Secondly. they can constitute statements of methodological standards to which researchers undertaking phar­macoeconomic analyses should aspire. without necessarily bei ng formally enforced. Finally, they can also be concerned with the ethical standards fo r the practice of economic eval uation, thereby con­stitutin g g uidelines fo r good economic practice analogous to those for good clinical pract ice.

Different sets of published guidelines place a slightl y different emphasis on each of these objec­tives. For example. the current Austral ian guide­lines. whilst containing a fu ll d iscussion of study methodology. say very li ttle about ethics. In con­trast. both the earlier draft Ontario guideli nes and the current draft Canadian gu idelines discuss the nature o f the relati onship between the researcher and research sponsor. 111

The extent to which the various parties arc like ly to welcome the development of gu idel ines will de­pend on the primary purpose of the guidelines in

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question. An assessment of the current situation is given in table I. This assessment is not precise. but is presented 10 illustrate the extent of overlap and conflict of interest b etween the different parties. It can be seen that government's interest is wide rang­ing. wi th a particular interest in the use of guide­lines fo r reimbursement requirements.

Industry's interest in guidelines is probably the lowest overall of all the parties. It is probably very reluctant to aeceplthe use of guidelines as rei mbur­sement requirements. although some sections of in­dustry fee l lha! if economic criteri a a re being used tacitly it might be better fo r government to be more explicit about its requirements. Industry is more interested in guideli nes as methodological and eth­ical codes. but would much prefer their implemen­talion to be voluntary.

Researchers probably have a broad interest in guidelines. having strongest concern in their use as methodological standards. A signi fi cant numher of researchers arc also interested in the development of ethical codes because this will probably make their negotiations with research sponsors a litt le easier. and will add 10 the overall credibility of in­dustry-sponsored studies. The researchers' interest in re imbursement requirements stems mainly from the belief that this will mean thei r work will be taken more seriously. However. some researchers fea r that if government uses guidelines as a cost containment tool, rather than as a way \0 achieve better value fo r money. the whole process will be discredited.161

Finally. the healthcare decision makers' interest is probably greatest in improving ethical standards, since their main concern is whether thcy can truslthe evaluations that they encounter. They probably also have a reasonably strong interest in methodological

Table I. Who is int8fested in guide~nes lor the provision of pharmacoeoonomic dala?

Party Reimbursement requilements MethoOOIogical standards

Government

l/ldu$tlY

Researchers

HeaRhcare decision makers

• rl

• Symb04: + • lillie ioterest: +t- " medium ioterest: ....... . high ioterest

Ethical standards

Guidelines for Pharm,lcoeconomic Studies

standards for the same reason. However, the use of gu idelines for reimbursement requirements is of lower importance to healthcare dec ision makers, unless the gu idelines were to be applied at the local level. Most healthcare decision makers probably prefer to make their own decisions about what drugs to use, rather than having the choice deter­mined al the national level by government.

3. What Are the Ways Forward?

An understandi ng of the purposes of guideli nes and the view of the various stakeho lders is impor­tant to determine the ways forward in a given set­ting. In my view. we need to move forward on all fronts, but the precise way forward is likely to de­pend o n local circumstances.

3.1 Guidelines as a Requirement Prior to Reimbursement

Although the pharmaceutical industry has been concerned about the spread of the Australian ap­proach to other countries. an essential requirement is thallhere is a national formulary, or positive list. of medicines that will be reimbursed. Few coun­tries operate such a policy. most preferring instead to decentral ise decisions about which drugs to use in particular situations. However, even here it may be the case that major institutions with in the healthcare system. such as large hospitals o r health maintenance organisations. require cost-effective­ness data before including a given product on the formulary.

The experience in Australia shows that it is fea­sible to specify which economic data are needed and to put an assessment procedure into operation. However, the approach is not without its practical difficulties. There are. of course. additional de­mands on the companies in the provision of data. Thi s has proved particularly problematic because the clinical data currently assembled for licensing applications are often inadequate as a basis for eco­nomic studies. This can be because the trials are perfonned under conditions that do not reflect usual clinical practice, include the wrong comparators,

e AdiS 1f11emoliOnc.llllmiled. AI rig~l$ lese.ved.

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or do not include measurements of meaningfu l clinical end-points.

Howcvcr, there arc also increased demands on government both in terms of the additional re­sources required to evaluate submissions and calls for greater detail in decision making. One aspect that needs to be clarified is the role that economic studies can play in setting the price of pharmaceu­ticals. The apparent paradox in Australia is that al­though it is necessary to assume a price in maki ng a cost-effectiveness submission to the PBAC for reimbursement. the pricing decision is made by a different commi ttee. The same situation occurs in a number of othercountrie!i. J t may be that the most appropriate role for economic evaluation is to de­li neate a possible range of prices. the final decision being based on a number of fac tors, including cost effectiveness.

In addition, governments need to be clear on their objecti ves when using cost-effectiveness data to assist in making pricing and reimbursement de­cisions. The main objective should be to improve value for money in the use of health service re­sources . i n which case similar guidelines should be applied to all health technologies. Governments seeki ng 10 use guidelines for cost containment pur­poses may be disappointed if some analyses justify high prices. Also. because guidelines result in a sig­nificant resource commitment for both industry and government, they may not be a very cost-effective form of COSl containmenl. 161

3.2 Guidelines as Sta tements of Methodological Standards

Various analyses of current practice in the eco­nomic evaluation of healthcare suggest that some standards are required, as many analyses are of poor quality.l7.81 However, the level of agreement or disagreement on aspects of economic evaluation methodology differs from one aspect to another.l4.91 For example. most analysts agree that economic eva luations shou ld compare relevant alternatives in a realistic setting. On the other hand, there is still considerable debate about the most appropriate ways of incorporating quality-of-life measures

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into economic eva luation. including whether health state preference values arc preferable to health profilcs,l101 or whether healthy years equiv­alents (HYEs) are preferable to qual ity-adjusted life years (QALYs).ll1.l21

Therefore, it is imponanl1hal1he level of Oexi­bility in guidelines varies in relation to the exlent of agreement on each methodological issue . Some items can bccloscJy specified, others require a Oex­ibl e interpretation. The existing published guide­lines do not perform 100 badly in this regard. For example, in the Australian guidel ines the scope for manoeuvre on the choice of comparator is quite limited. whereas the guidance on choice of out­come measure is relative ly open.

In additi on, it is clear that methodological s tand~

ards in economic evaluation are continually chang­ing. A good example i s the current debate abOUithe handling of uncertainty, with recent pub lications discussing statist ical analysisl131 and approaches to sensitivity analysis. 1141 Given the rapid develop­ments in pharmacoeconomic methodology. it is probably best that guide lines for the purpose of mai ntai ning methodological standards should see k 10 specify attai nable standards to which everyone should aspire. but allow analysts to improve on these if they so wish.

3.3 Guidelines as Statements of Ethical Standards

The main objective here is to ensu re that deci­sion makers have sufficient confidence in economic evaluation results. A clear statement of method­o logical standards as embodied in guidelines, and transparency in the reponing of study results . will go some way to allaying decision makers' con­cerns. Whether or not guidelines should go further, by specifying elements of the et hi cal conduct of research sponsor and analyst, is like ly to depend on the extent of other 'check s and balances' in a given jurisdiction.

For example, where analyses are submitted t o an official government committee for approval, or refereed through peer-review journals. decision makers may have more confidence in them. More

Dfllmll!Ol/d

refereed journals are now asking for fuller disclo­sure from study authors concerning the nature of any financial relat ionsh ip with the research spon ­sor and the con tractual arrangements including rights 10 publicati on. The Nell' Eng/and JO!IrIW/ oj Medicine has recently gone further by saying that it will only publi sh econom ic studies when it can be reassured that no potential conflict of interest exists. In particular, it will not publish a study if its aut hors have any financial relationship with a sponsoring company.! t51

Despite these concerns. the prime interest shou ld be in how a study was done, not by whom. How­ever, studies undertaken by independent experts are always likely 10 have the highest credibility, particu larly if it is clear that the sponsoring com­pany took the risk of allowing complete freedom of publication from the outset. Also, more discus­sion is req ui red of the role of indust ry personnel in the design and conduct of studies. Although the ultimate decision on methodological issues should be vested in the independent researcher. o n occa­sions the contribution of industry personnel can be undervalued or given insufficient credit. It would be a pity if gu ide lines forethical standards had this impact, because it is clear from experience in cli n­ical trials that industry personnel arc often, and rightly, co-authors of papers because of their con­tribution 10 the study.

4. Conclusions

Guideli nes for pharmacoeconomic studies can serve different purposes, and there are a number of stakeholders in guideline development whose in ­terests may often be in confl ict. However. there is a strong common interest in the deve lopment of guidelines as methodological standards and this is where the emphasis should be placed. The leve l of fl ex ibility in such guideli nes should re flect the de­gree of methodological uncertainty.

Guidelines may also serve an important purpose as requirements for reimbursement or statements o f ethical standards. The appropriate ways forward here arc more likely to depend on local factors, such as the existence of posi ti ve lists o f drugs and

Guidelines for PharmaeoecoflomieSludies

the extent to which pharmacoeconomic studies are subjected to external scruti ny by ofricial commit­tees or refereed journals. If gu ideli nes are used as requirements for reimbursement the overall objec­tive shou ld be one of value fo r money. rather than merely cost containment.

Acknowledgements

A preliminary version of this p;!pef was presented at the Pharmeeoll Europe '94 conference. Paris. France. on 9 Feb­ruary 1994. 1 am gr<ltcful \0 members of the audience for Iheir construct ive com ments. and 10 Vanessa Windass for sene­larial ass istance.

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II . Mehrez A. Gafni A. Hea ltlt y·years equivalents "ersus quality­adjusted life-years in pUrSUil of progress. Me<! [)cci. Making 1993; 13: 287·92

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13. O'Brien B. Drummond ME Labelle R. In search of power and significance: issues in the design and analy.<is of stochastic economic apprais.als. Med Care 1994: 32: 150·63

14. Briggs AH. Sculpher MI. Bu~ton MI . Uncertainty in lhe «I)­nomic eva luation of hea lth care technologic" the role of sen· sitivity ana lysis. Health Econ 1994; J: 95-104

15. Kassirer IP. Ange ll M. The Journal's policy on ,"",t·effedi,',,· ness ana\y!.es leditoriall. N Engl J Med 1 99~: 33\ 669-70

Correspondence and reprints: Professor Micilael F. DrtWI­mrmd, Cenlre for Health Economics, University of York, Heslington, York YOI SDD. England.

PhormocoEconomics I> (6) 1994