Presentation (CTI)

OBJECTIVES: Health technology assessment (HTA) compares an intervention’s incremental costs with its incremental health effects, implicitly assuming all costs are interchangeable and can be aggregated without adjustment. However, policy developments in multiple jurisdictions, such as changes to NICE’s cost-effectiveness thresholds, suggest that policymakers place additional value on spending for on-patent products (“product costs”) compared to other spending such as staff time, generic drugs, or capital costs (“non-product costs”). Conventionally, this is operationalised by applying higher ICER-based cost-effectiveness thresholds to products. This study examines how HTA should be conducted when policymakers have preferences over both population health and products spending.
METHODS: We developed a theoretical framework that disaggregates incremental costs into product and non-product costs. This framework formalises policymaker objectives as a trade-off between population health and the additional value assigned to products spending. Using several examples, we assessed whether alternative formulations of cost-effectiveness metrics consistently and efficiently implement these objectives.
RESULTS: Conventional HTA methods can over- or under-value interventions depending on their mix of product and non-product costs. This creates unintended distortions, with the potential to unnecessarily restrict access to innovative technologies such as high-price curative therapies that are cost-effective. We derive a modified approach for measuring cost-effectiveness that applies separate thresholds to incremental product costs and incremental non-product costs, aligning value assessment with policymakers’ objectives of improving population health while rewarding perceived additional value of product spending. This framework increases the value-based prices of interventions that tend to have high product costs but reduce non-product costs elsewhere in the healthcare system, such as curative therapies.
CONCLUSIONS: Where policymakers assign additional value to products spending, conventional HTA frameworks may not efficiently implement policy objectives. The proposed framework provides a more transparent and internally consistent approach to value assessment, with implications for the types of products that are developed by industry and reimbursed by payers.