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There’s life outside the cost-effectiveness threshold

In the last blog of our HTA mini-series, we discussed how traditional economic evaluations may present some limitations around the concept of opportunity costs. This blog aims to explain the need for political decision-making and its potential problems.

As mentioned in our previous blog, the cost-effectiveness threshold employed by NICE might lack precision in accounting for opportunity costs. In certain instances, this threshold could be viewed as inadequate for evaluating interventions with intangible benefits – those whose value cannot be quantified through economic assessments. An illustrative case is that of rare diseases and orphan drugs (Stafinski et al. 2022, Clarke et al. 2021). Due to the limited number of individuals affected, treatments and medications often necessitate higher costs to ensure the viability of the investment. Consequently, the elevated expenditures generally result in these treatments to go beyond the limit of the established cost-effectiveness threshold.

Nevertheless, a crucial element which is generally absent from economic models is the influence of ideals. Societies tend to hold the principle of not abandoning any individual and resisting leaving citizens’ destinies to chance in high regard. Consequently, even when confronted with treatments that lack cost-effectiveness due to their substantial expenses, the consideration of such treatments remains viable if the value of these treatments aligns with solidaristic ideals within a specific society. Such determinations must be rendered through a “political” lens, and decision-makers are then tasked with inferring the extent to which these ideals are valued by society and guide their choices accordingly.

The influence of inequalities and societal preferences
An additional illustration can be found within the context of health inequalities (Cookson et al. 2017, York Health Economics Consortium 2023) which we will cover more in detail in our next blog. When a novel treatment, primarily targeting socioeconomically disadvantaged populations, lacks cost-effectiveness due to its elevated expenses, the consideration of such treatment might still be warranted to address the issue of health disparities. The act of rectifying health inequalities and promoting equity can carry a substantial and immeasurable value that ought to be factored into the decision-making process.

Furthermore, given that policy makers are still forced to make opinion-based choices, the potential for lobbying emerges as a concern. Decision-makers become susceptible to various forms of influence, including political pressures, which might lead them to allocate funding toward treatments that lack cost-effectiveness, ultimately incurring higher costs (via the displacement of resources) than actual benefits. A potential example of this can be observed in the context of cancer treatments, which became a focal point of significant debate due to the allocation of funding to treatments with notably high costs relative to very mild patient benefits (Jenei et al. 2023, Hawkes 2011, Jack 2014). Opponents of allocating resources to certain cancer treatments argued that those funds could be channelled more effectively into other disease areas. In this scenario, it could be argued that perhaps the decision-making process was influenced by the pressure of funding additional treatments due to the profound societal significance attributed to cancer.

All in all, ‘subjective’ decision-making remains indispensable as a complementary facet to ‘objective’ economic evaluations. However, this approach is not without its shortcomings, notably concerning the susceptibility to lobbying and external political pressures.

Author of this blogpost:
Dr Luís Filipe, Lancaster University

What’s next
In the next blog, Dr Valerio Benedetto will look into how equity considerations enter the HTA process.

Some references:
• Clarke, Sophie, Michelle Ellis, and Jack Brownrigg. “The impact of rarity in NICE’s health technology appraisals.” Orphanet Journal of Rare Diseases 16.1 (2021): 1-7.
• Stafinski, Tania, et al. “HTA decision-making for drugs for rare diseases: comparison of processes across countries.” Orphanet Journal of Rare Diseases 17.1 (2022): 1-14.
• Cookson, Richard, and Andrew J. Mirelman. “Equity in HTA: what doesn’t get measured, gets marginalised.” Israel journal of health policy research 6.1 (2017): 1-4.
• Health Economics Consortium “No half measures: Health inequalities in technology appraisal. Final Report”, 2023
• Jenei, Kristina, et al. “Health technology assessment for cancer medicines across the G7 countries and Oceania: an international, cross-sectional study.” The Lancet Oncology 24.6 (2023): 624-635.
• Hawkes, Nigel. “High cost of cancer treatment doesn’t reflect benefits, say specialists.” (2011).
• Jack, Andrew. “Which way now for the Cancer Drugs Fund?.” BMJ 349 (2014).