DRUG DEVELOPMENT RESEARCH 71 : 445–448 (2010)

Editorial

Informing Resource Allocation Decision Making:Economic Evaluations of Pharmacogenetic Tests

Katherine Payne1� and David Gurwitz2

1Health Sciences– Methodology, School of Community Based Medicine, The University ofManchester, Oxford Road, Manchester M13 9PL, United Kingdom

2Department of Human Molecular Genetics and Biochemistry, Sackler Faculty of Medicine,Tel-Aviv University, Tel-Aviv 69978, Israel

Strategy, Management and Health Policy

Enabling

Technology,

Genomics,

Proteomics

Preclinical

Research

Preclinical Development

Toxicology, Formulation

Drug Delivery,

Pharmacokinetics

Clinical Development

Phases I-III

Regulatory, Quality,

Manufacturing

Postmarketing

Phase IV

ABSTRACT In some countries, economic evaluations now have a prominent role and provideinformation to use in resource allocation decisions for health care technologies and interventions. Thiseditorial describes the importance of understanding the degree and extent of uncertainty in a publishedeconomic evaluation. Some countries have diverted considerable resources toward health technologyassessments (HTAs) and appraisals of health care interventions using deliberative decision-makingprocesses. However, given the scarcity of health care resources on a global scale, there is a growing needto support other countries that do not have the skill base or considerable resources needed to conduct theirown HTAs and appraisal of the evidence. As a minimum, it is vital that individual countries are able tounderstand the relevance of published economic evaluation of an intervention, such as a pharmacogenetictest, to their own practice. Careful appraisal of the relevance of the findings is crucial before decisionmakers decide that a particular pharmacogenetic test is an appropriate use of scarce health care resourcesin their country. Drug Dev Res 71:445–448, 2010. r 2010 Wiley-Liss, Inc.

Key words: economic evaluation; pharmacogenetics; health technology assessment; developing countries; WorldHealth Organization

EVALUATION, ASSESSMENT, AND APPRAISAL

Commentators continue to suggest a need foreconomic evaluation data to support the use ofpharmacogenetic testing to target the safe and effectiveuse of medicines [Conti et al., 2010]. Economicevaluation data is only one potential type of informationthat may be used to guide resource allocation decisionsfor pharmacogenetic tests and medicines. Findingsfrom an economic evaluation need to be supported byother types of data such as robust epidemiological,diagnostic accuracy, and clinical effectiveness data.These data need to be relevant to the country andpatient population of interest. Ideally, the views andpreferences of the potential users of the intervention,current and future patients, should also be used as

inputs into the decision-making process. It thereforebecomes necessary for decision makers commissioninghealth care services, based locally and nationally, tohave a structured process in which they combine suchdata. This has stimulated the requirement for struc-tured health technology assessment (HTA) programs.Previous commentators have observed that there is noconsistent definition of HTA [Draborg et al., 2005].The International Network for Agencies in Health

DDR

Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/ddr.20429

�Correspondence to: Katherine Payne, Health Sciences–Methodology, School of Community Based Medicine, The Universityof Manchester, Oxford Road, Manchester M13 9PL, UK.E-mail: katherine.payne@manchester.ac.uk

�c 2010 Wiley-Liss, Inc.

Technology Assessment (INAHTA) has provided thefollowing description of HTA: ‘‘technology assessmentin health care is a multidisciplinary field of policyanalysis. It studies the medical, social, ethical, andeconomic implications of development, diffusion, anduse of health technology’’ [INAHTA, 2010]. In 1993,the international network of agencies for HTA wasestablished to encourage co-operation between theagencies and minimize unnecessary duplication ofeffort [Hailey, 2009]. By 2009, 46 members from 27countries represented both regional and nationalagencies. INAHTA is also a collaborating partner withthe World Health Organization (WHO) with a remit todevelop and mentor regions and countries with limitedHTA capacity and capability.

In some countries, such as the United Kingdom,HTA is taken a step further. The National Institute forHealth and Clinical Excellence (NICE) established atechnology appraisal process [NICE, 2010]. Thisprocess uses HTA reports as inputs into a deliberativeprocess conducted by committees of decision makers,representing different academic, methodological, andclinical expertise, supported by input from invitedexperts and consultation with health care professionalsand patients. If the evaluation, assessment, andappraisal process is conducted at a national level, thereis then a need for regional service commissioners toimplement the guidance produced in their locality.Thus, there is a distinct difference between evaluation,assessment, appraisal, and implementation, althoughthis difference is not often made clear. All these aspectsof informed decision making require technical skills ofmethodological experts, such as statisticians and healtheconomists, as well as clinical and financial experts. Theprocesses of evaluation, assessment, and appraisal aretherefore, resource intensive. Applying the concept ofopportunity cost, which is the theory health economistsuse to guide resource allocation decisions, means therehas to be a clear and measurable benefit from divertingresources toward evaluation, assessment, and appraisalcompared with other potential uses of finite decision-making resources.

To date, the focus in the literature has been limitedto generating economic data within the context ofpharmacogenetic testing once the companion diagnosticand medicine is developed and ready for introductioninto clinical practice. In this special issue of DrugDevelopment Research, Tolley [2010] describes howeconomic evaluations may be used earlier in the drugdevelopment process and Boyd et al. [2010] align thedifferent stages of the drug development process with afive-stage iterative process for economic evaluation.

In some jurisdictions, such as the United Kingdom,it could reasonably be argued that the age of the

incremental cost effectiveness ratio has arrived. TheNICE uses this summary measure that reports therelative costs and benefits of competing health careinterventions as an input into the decision-makingprocess when producing guidance on whether atechnology is an appropriate use of health careresources. A close analogy can readily be drawnbetween using genetic data to target medicines toappropriate patient populations and using economicevaluations in making resource allocation decisions.Provision of information is key to both. As suggestedpreviously, the findings from an economic evaluationcannot be used on its own to make a resource allocationdecision and some degree of interpretation andappraisal is required. Similarly, information on geneticvariation from pharmacogenetic tests may only bepartially useful because genetics is only one of manyfactors that will affect drug response, or the risk of aside effect. For these reasons, the information from apharmacogenetic test is also uncertain and provides theprescriber with probabilistic information to guide prescrib-ing, rather than a clear-cut answer about how to changethe dose and/or medicine prescribed. A particularlyuseful application of genetic data is as an input intoprescribing algorithms, such as those developed toinform warfarin prescribing [International WarfarinPharmacogenetics Consortium, 2009].

ECONOMIC EVALUATIONS: ONE SIZE MAY NOTFIT ALL

The basic framework for any economic evaluationis the same. It involves the comparative assessment ofinputs (resource use and costs) and outputs (measuredusing effectiveness, utility, or monetary values) for atleast two health care interventions. To be clear whichcosts and benefits are relevant to the decision problem,the analyst needs to define the study perspective, suchas the third-party payer or societal, and the study timehorizon, duration of treatment only, or the predictedlifetime of the population of interest. It is thesetechnicalities of the design and conduct of the analysisthat mean the results from an economic evaluation willgenerally only be relevant to a specific health caresystem, country, and the defined patient population ofinterest. Inter-country, and sometimes intra-country,differences in care pathways, use of technologies, andhealth care funding mechanisms again make generalizingfrom the findings of an economic evaluation conductedin one country difficult, and often inappropriate.

Understanding the degree of uncertainty and thenature of the model design and inputs driving thisuncertainty becomes paramount when generalizing theresults of an economic evaluation to a different healthcare system and/or country. This is because the

446 EDITORIAL

Drug Dev. Res.

economic evaluation has made assumptions about thecosts and benefits of an intervention and the relevantalternative interventions based on defined pathways ofcare, which will be country specific. Furthermore,guidelines to inform the design and conduct ofeconomic evaluations are country specific. A usefulwebsite, updated by the International Society forPharmacoeconomics and Outcomes Research (ISPOR),lists all the country-specific guidelines for economicevaluations [ISPOR, 2010]. Although the frameworkfor evaluation will be the same, assumptions aboutwhich costs to include and how to measure benefitsmay not be the same in different countries.

The need to understand uncertainty is alsoimportant for a specific pharmacogenetic test. Cur-rently for pharmacogenetic testing, the test will aim toidentify genetic variation in one gene that is linked toone outcome, such as response or risk of a particularside effect. However, many nongenetic factors affect anindividual’s response phenotype to a given drug. Thetest will not, therefore, have a predictive value of 100%even when its sensitivity and specificity/accuracy are100%. A prescriber will need to understand the test’slimitations and subsequent need for careful monitoringfor response or side effects. For economic evaluations,it is necessary to understand whether the analysisconducted has generated data sufficient for informeddecision making [Cooper et al., 2007]. Probabilisticsensitivity analysis (PSA) takes into account theuncertainty in all parameters and is now routinelyexpected in submissions to the NICE appraisal process.In this issue, Vegter et al. [2010] reassuringly note thatan increasing number of economic evaluations arerelevant to pharmacogenetic testing using PSA toquantify uncertainty. Other sources of uncertainty existand should ideally be explored within economicevaluations. For example, structural uncertainty oruncertainty due to patient heterogeneity could respec-tively reflect the possibility of different pathways ofcare or subgroups of the population with different costeffectiveness [Philips et al., 2006].

We predict that the demand for robust economicevaluations of pharmacogenetic tests will continue. Inthe United Kingdom, a number of explicit calls havebeen made for such data. The House of Lords report[House of Lords Science and Technology Committee,2009] stated boldly that: ‘‘we recommend the Depart-ment of Health extends the remit of the NationalInstitute for Health and Clinical Excellence to includea programme for evaluating the validity, utility andcost-benefits of all new genomic tests for commondiseases, including pharmacogenetic tests.’’ One clearexample of how this report has been implemented isthe recent addition of the diagnostics program to the

NICE process. Although we applaud the enthusiasm toappraise diagnostics, including pharmacogenetic tests,we do question whether this is a realistic objective,particularly in light of recently published HTAs ofpharmacogenetic tests that have struggled to populateeconomic models due to insufficient data on the clinicaleffectiveness of the tests [see, e.g., Fleeman et al.,2010]. We believe that economic evaluations ofpharmacogenetic tests are required to support HTAs,but regulatory bodies must put appropriate pressure onmedicine and diagnostic manufacturers to generateevidence of predictive value and subsequent impact onprescribing decisions, which is essential to populaterobust economic models.

THE BIGGER PICTURE?

Canada and Australia led the way in usingeconomic evaluation to inform decision making [seeMitchell et al., 2010, this issue]. Other countries, suchas Germany and the United Kingdom, have nowfollowed suit. However, the scope for using economicevaluations, HTAs, and technology appraisals in somecountries may be limited by the finite number of skilledhealth economists and decision analysts. We recognizethat some countries will struggle to conduct HTAs ofhealth care interventions supported by a robustdeliberative process to inform resource allocationdecisions, such as that used by NICE. These countriesmay not have the necessary resources for criticalappraisal of the available evidence supporting pharma-cogenetic tests or conduct an economic evaluationrelevant to their health care systems. As such, it is vitalthat their decision makers assess the relevance of aneconomic evaluation to their specific patient populationand country. The number of economic evaluationsrelating to pharmacogenetic tests is clearly increasing,but the results will only be relevant to the decisionmaker if the pathways of care and parameter inputsused were similar to their health care systems. Mosteconomic evaluations in pharmacogenetic testing haveused decision analytic modeling methods [Vegter et al.,2007]. The interventions and pathways represented inthe model must match the patterns of health care useand outcome for the jurisdiction of the decision maker.A large number of factors that might be expected togenerate variation in the cost effectiveness of healthcare interventions across locations are mentioned inthe literature [Sculpher et al., 2004]. The bottom line isthat one economic evaluation may not meet therequirements for all jurisdictions or provide informa-tion sufficient for decision making in every country orpatient population. Careful appraisal of the relevanceof the findings is crucial before decision makers decide

447ECONOMIC EVALUATIONS OF PHARMACOGENETIC TESTS

Drug Dev. Res.

that a particular pharmacogenetic test is an appropriateuse of scarce health care resources in their country.

Some countries have diverted considerable re-sources toward HTAs and appraisals of health careinterventions using deliberative decision-making pro-cesses. However, given the scarcity of health careresources on a global scale, there is a growing need tosupport other countries that do not have the skill baseor considerable resources needed to conduct their ownHTAs and appraisal of the evidence. As a minimum, itis vital that individual countries are able to understandthe relevance of published economic evaluation of anintervention, such as a pharmacogenetic test, to theirown practice. We think it is particularly important toempower developing countries that not only havelimited health care budgets but also limited resourcesin terms of health economics expertise, to conduct therelevant HTAs. In an open letter to the DirectorGeneral of the WHO, Levine [2006] called for refocus-ing the organization so that ‘‘it can identify crosscountry health priorities and provide credible technicalexpertise on public health problems and solutions thathelp national public health authorities to focus theirresources effectively.’’ In the United Kingdom, NICEhas tried to meet some of this demand by establishingNICE International, which offers support to countrieswith limited resources to conduct HTAs [NICE, 2010].However, this support is not free and NICE Interna-tional charges for this service. The well-merited role ofassisting developing countries with their HTA needsshould not be left to the HTA agency of a singlecountry; rather, it should be overseen by the WHO,which has the mandate as the United Nations publichealth arm. Facilitating the development of HTA toolsand decision-making criteria on a global scale, so thatall countries can effectively use economic evidence toinform resource allocation decisions, seems a mostdeserving and yet sadly unfulfilled role for the WHO.

REFERENCES

Boyd KA, Fenwick E, Briggs A. 2010. Using an iterative approach toeconomic evaluation in the drug development process. Drug DevRes: 71:470–477.

Conti R, Veenstra DL, Armstrong K, Lesko LJ, Grosse SD.2010. Personalized medicine and genomics: challenges andopportunities in assessing effectiveness, cost-effectiveness, andfuture research priorities. Med Decis Making 30:328–340.

Cooper NJ, Sutton AJ, Ades AE, Paisley S, Jones DR. 2007. Use ofevidence in economic decision models: practical issues andmethodological challenges. Health Econ 16:1277–1286.

Draborg E, Gyrd-Hansen D, Bo Poulsen P, Horder M. 2005.International comparison of the definition and the practicalapplication of health technology assessment. Int J Technol AssessHealth Care 21:89–95.

Fleeman N, McLeod C, Bagust A, Beale S, Boland A, Dundar Y,Jorgensen A, Payne K, Pirmohamed M, Pushpakom S, et al. 2010.The clinical and cost effectiveness of testing for cytochrome P450polymorphisms in patients treated with antipsychotics. HealthTechnol Assess 14:1–182.

Hailey D. 2009. Development of the International Network ofAgencies for Health Technology Assessment. Int J Tech AssessHealth Care 25(suppl 1):24–27.

House of Lords Science and Technology Committee. 2009.Genomic medicine. London: Stationery Office Limited.

International Network for Agencies in Health Technology Assess-ment. Definition of health technology assessment [Available at:http://www.inahta.org].

International Society for Pharmacoeconomics and OutcomesResearch (ISPOR) website. Last accessed 29 September 2010.Pharmacoeconomic guidelines around the world [http://www.ispor.org/peguidelines/index.asp].

International Warfarin Pharmacogenetics Consortium. 2009.Estimation of the Warfarin dose with clinical and pharmacoge-netic data. N Engl J Med 360:753–764.

Levine R. 2006. Open letter to the incoming director generalof the World Health Organization: time to refocus. BMJ 333:1015–1017.

National Institute for Health and Clinical Excellence (NICE). 2010.Accessed 29 September NICE International [http://www.nice.org.uk/aboutnice/niceinternational/AboutNICEInternational.jsp].

Philips Z, Bojke L, Sculpher M, Claxton K, Golder S. 2006. Goodpractice guidelines for decision-analytic modelling in healthtechnology assessment: a review and consolidation of qualityassessment. Pharmacoeconomics 24:355–371.

Sculpher MJ, Pang FS, Manca A, Drummond MF, Golder S,Urdahl H, Davies LM, Eastwood A. 2004. Generalisability ineconomic evaluation studies in healthcare: a review and casestudies. Health Technol Assess 8:1–213.

Tolley K. 2010. Pharmaceutical market access and the challengesof Health Technology Assessment in the UK. Drug Dev Res: 71:478–484.

Vegter S, Boersma C, Rozenbaum M, Wilfert B, Navis G, Postma MJ.2007. Pharmacoeconomic evaluations of pharmacogenetic andgenomic screening programmes. A systematic review on contentand adherence to guidelines. Pharmacoeconomics 26:569–587.

Vegter S, Jansen E, Postma MJ, Boersma C. 2010. Economicevaluations of pharmacogenetic and genomic screeningprograms—an update of the literature. Drug Dev Res: 71:492–501.

448 EDITORIAL

Drug Dev. Res.