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Adrian Towse, MA, MPhil

Adrian Towse VARA19
Research Grant in Value Assessment and Health Outcomes Research, 2019 Office of Health Economics, UK

Implementing Augmented Cost-Effectiveness Analysis: Challenges and Next Steps


In its 2018 report, the ISPOR Special Task Force (STF) on U.S. Value Assessment Frameworks recommended using the quality-adjusted life year (QALY) as a starting point for health technology assessment of new medicines, and also recommended further work on the best way to incorporate it by exploring the use of “augmented cost-effectiveness analysis” (ACEA) and “multi-criteria decision analysis” (MCDA). In our proposal, we laid out a research agenda of nine potential topics to support further development of ACEA. Based on input from the reviewers and colleagues, we selected three topics for analysis. Our first policy analysis paper is titled: “Aligning Value Assessment Frameworks for Medicines across Decision Contexts: The Case for Using the Quality-Adjusted Life Year (QALY) as the Core Element.” The STF emphasized the importance of “decision context” in thinking about how the health system assesses value. We discuss four decision contexts that can be viewed as a cascade: regulatory approval, inclusion in the health plan benefit package, management of health benefits and utilization, and finally, clinical shared decision making. We argue that for the efficient use of new medicines at a system level, these decisions should be aligned in a manner that promotes their efficient interaction, and that the metric of the QALY can provide the backbone that connects and aligns these contexts. Our second paper is titled: “Reconciling ACEA and MCDA: Is There a Way Forward for Measuring Cost-Effectiveness in the U.S. Healthcare Setting?” We explore the idea of a “QALY-anchored” MCDA and compared with a form of ACEA where elements of value are either classified as health or consumption attributes—and ultimately monetized. We argue that trade-offs derived from an ACEA and a QALY-anchored MCDA model are similarly affected by budget changes; and they are aligned and would result in similar decisions. Our third paper is titled: “Applying ACEA to Innovative Medicines for Rare and Ultra-Rare Health-Catastrophic Conditions.” Here we argue that due to greater uncertainty and the potential for financial and health catastrophe, there would be greater insurance value in this situation. This would imply the need to add additional value beyond the QALY—in effect, applying a higher societal willingness-to-pay threshold.

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