OBJECTIVES: Implement the Generalized Risk-Adjusted Cost-Effectiveness (GRACE) framework (first introduced by Lakdawalla & Phelps (L&P, 2021)) to estimate the comprehensive value of direct-acting antivirals (DAAs) for the treatment of hepatitis C (HCV) compared to peginterferon alfa and ribavirin (PEG/riba), accounting for differential valuations of life years vs. quality of life (QoL), disease severity, and insurance value, in addition to other novel value elements of our generalized cost-effectiveness analysis (GCEA).

METHODS: We take a literature-based approach to incorporate the following elements as described by L&P into our GRACE implementation: (i) variance in willingness to pay (WTP) based on disease severity; (ii) adjustment for uncertainty in treatment effectiveness; and (iii) marginal rate of substitution (MRS) between life expectancy (LE) and QoL by health state.

RESULTS: We estimated the MRS between LE and QoL as 1.867, calculating that patients with HCV are willing to trade, on average, 36 months in exchange for perfect health. We assumed a risk aversion of 2.125 and an average HCV health loss of 0.336 to estimate a disease severity ratio of ~1.31, based on L&P. Incorporating these elements resulted in an incremental cost-effectiveness (ICER) estimate of $4,487/QALY after also accounting for transmission dynamics, dynamic price and efficacy, genericization, productivity loss, and caregiver spillover, compared to $5,609/QALY without GRACE elements and $64,512/QALY without any novel value elements. Finally, we estimated a GRACE-adjusted WTP threshold of $171,781/QALY for patients with HCV. Model results remained consistent across a wide range of assumptions and sensitivity analyses, both on traditional and GRACE-specific model parameters.

CONCLUSIONS: Our study provides a roadmap of a potential approach for estimating needed parameters to incorporate GRACE model elements as described by L&P. Incorporating these elements resulted in a 93% decrease in ICER values compared to a traditional cost-effectiveness model, underscoring their importance in reflecting the comprehensive treatment value.