Make budget and cost analyses part of CR process
April 1, 2008 7 minutes read
Make budget and cost analyses part of CR process
ISPOR makes recommendations
With pharmaceutical research costing billions of dollars annually, it's a good practice for sponsors, clinical trial (CT) sites, and others in the industry to analyze costs and budgets, an expert advises.
Investigators should keep in mind the question of whether a particular study will provide useful information to the public in the end, and the intervention's impact on health care costs need to be considered when designing the study, says Josephine Mauskopf, PhD, a vice president of health economics at RTI Health Solutions in Research Triangle Park, NC. Mauskopf is a co-author of the recently published budget impact analysis report of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) task force.1
ISPOR is a professional society that focuses on research to estimate the value of new drugs, devices, and other health care interventions. One of its goals is to have a leadership role in setting guidelines for evaluating new treatments, Mauskopf says.
ISPOR's budget impact analysis guidelines were created by members of an international task force that met regularly in both closed and open meetings. The task force process also included review of draft guidelines that were posted on the ISPOR web site (www.ispor.org).
"We received a lot of comments including input from decision makers, industry, and researchers," Mauskopf says. "We revised the guidance based on the comments, and we were able to reach consensus on some issues."
Both budget impact analyses (BIAs) and cost-effectiveness analyses (CEAs) help to inform the research and health care community about the real world benefits and costs associated with a new drug or product. And these economic assessments are likely to become more routine as health care decision makers around the world require economic analyses.
CT sites and investigators can assist with budget impact analyses by collecting data that will be useful in determining the true costs of a new intervention, Mauskopf notes.
For example, Mauskopf was involved in designing a trial involving renal transplantation patients. The trial was a randomized, placebo-controlled, double-blind trial of valacyclovir, a cytomegalovirus (CMV) prophylaxis, used with renal transplantation.2
"We designed the trial to follow people for six months whether or not they got sick from CMV," Mauskopf explains.
"From a clinical perspective, you could stop following them when they got CMV, since that was the primary clinical endpoint," she explains. "But we wanted to follow them after they got it to see what it means, how many days were spent in the hospital, whether the graft was rejected, and all of the other implications of getting CMV."
Since the trial was designed to collect additional follow-up information, the data collected resulted in an economic analysis that was really useful for decision makers, Mauskopf adds.
The results showed that patients with CMV disease used significantly more resources than those who did not and that the use of valacyclovir CMV prophylaxis in renal transplantation was more cost-effective than placebo among the renal transplant population of people who were donor seropositive for CMV and recipient sero-negative.2
"This study was one of the very first examples of changing the design of a study so you could collect the data that was really important for an economic analysis," Mauskopf says.
"Before this study when renal transplant patients got CMV, they'd be out of the study because that was the primary study endpoint," she notes. "And all you were counting was how many people got to the study endpoint."
The alternative design allowed you to show what it meant when patients became infected with CMV.
When investigators and sponsors design studies to collect additional follow-up data, they are able to determine the economic impact of the new product, which cannot be estimated from the typical clinical trial, Mauskopf says.
This is why major research institutions and sponsors increasingly are including health economic experts in the project team. They help design clinical trials and provide input during the research process, Mauskopf says.
"At some point you need to make a decision of whether a drug should go into phase II or III trials," Mauskopf says.
In making this decision, sponsors and investigators need to look at the burden of illness to determine the disease costs and current treatment patterns, she explains.
"Then you should do a hypothetical budget analysis that looks at what will happen to the budget if the study drug does what is hoped for," Mauskopf adds. "You should also do a hypothetical cost-effectiveness analysis."
The reality is that managed care organizations, Medicare, and other payers look carefully at new treatment/drug costs before assigning these to a formulary. Plus, providers may favor medications based on their reimbursement patterns.
For instance, before Medicare began to pay for outpatient medication prescriptions, oncologists routinely would use injectable anticancer drugs because Medicare would pay for them. Oral drugs with lower administration costs were not covered, so it was a lose-lose situation from the doctor and patient perspective, even though the oral drugs might be better from a societal perspective, Mauskopf explains.
"When I worked for a company that brought a new epilepsy treatment to market, we had a phone call from a very upset physician who said, 'I want to use your drug, but it used up all of my budget,'" Mauskopf recalls. "He was really angry because his budget was based on older drugs, and when he started to use the new one, he realized it blew his budget."
This example shows why sponsors and researchers need to be cognizant of the budget impact of new products under study.
"Budgets can be increased, but you have to do the work to show why it should be increased over time, and that's where the assessment of cost-effectiveness comes in," Mauskopf says.
For the health care industry to make the best decisions with regard to new medications and treatments, these questions need to be answered early in the research process, Mauskopf says:
- Is this study going to be of benefit to the public in the end?
- Does this drug have an effect?
- Is the drug a good value for the money?
- Is the drug going to be affordable?
"You need to include more than just the number of hospital days the patients had, and you need to design the study so that the information will make sense," Mauskopf says.
"If you can show that you can increase or decrease the time to event that will show you if the drug is different than placebo," Mauskopf explains. "But what happens after the person has the event?"
Without this information it is difficult to show the economic impact of the new drug, she adds.
A lot of trials stop collecting data after an event occurs, so no one has the data that shows the full picture of the drug's economic impact, she adds.
ISPOR's guidelines are designed to provide simple, clear information about good practice in creating a budget impact analysis.
Here are some recommendation highlights:
- Specific health care decision makers' perspective should be considered in the budget impact of new health technology;1
- BIA data should reflect the size and characteristics of the health condition's population, current and new treatment mix, safety and efficacy of new and current treatments, and costs and resource use of treatments and symptoms that apply to the health condition's population;1
- The BIA model also should be consistent with the model used for the CEA.1
- The BIA should incorporate the simplest design that still generates credible and transparent estimates;1
"One of the things that came through loud and clear when we had open forum meetings at ISPOR was that people said to keep it simple," Mauskopf says. "The problem is when you get methodologists together that they start to develop new and complex ways of doing things."
The whole point of the ISPOR guidelines was to help real world decision makers manage their real world budgets, she notes.
And making budget impact analyses simple in health care is a challenge.
For example, three drugs might each have a set price and a set market share, but the budget impact is not a multiple of these factors. BIA reports also need to consider the efficacy of one drug versus another and how that impacts the patient's likelihood to be hospitalized or to have lab tests, doctor care, and other health care services. A drug that costs more, but significantly reduces the chances the patient will be hospitalized might be less costly in the long-run than a cheaper drug that when used results in more hospitalizations and other health care utilization, Mauskopf says.
"If you bring in a new drug that works better than drugs A and B, then some of the other costs may go down," she explains.
"So when we estimate the total budget impact of putting drug C on the formulary, we have to estimate the impact of the costs of drugs A and B and the impact on the disease costs because the managed care organization budgets will be affected by both of these types of costs," Mauskopf says. "Estimating the impact of a drug on disease costs can be rather complicated."
References
- Mauskopf JA, Sullivan SD, Annemans L, et al. Principles of good practice for budget impact analysis: Report of the ISPOR Task Force on good research practices — budget impact analysis. Value Health 2007;10:336-347.
- Legendre CM, Norman DJ, Keating MR, et al. Valaciclovir prophylaxis of cytomegalovirus infection and disease in renal transplantation: An economic evaluation. Transplantation 2000;70:1463-1468.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content