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Assessing Use of Cost-Effectiveness Analyses to Inform Drug Adoption

May 03, 2021

By Edan Stanley
Michael Drummond PhD, Professor of Health Economics, University of York, UK, and Allen Lising, Managing Director of FormularyDecisions, a part of AmerisourceBergen, offer insight from their recent study which assessed the current use of cost-effectiveness analyses in decision-making for the adoption of new drugs and other health technologies by payers.

What existing data led you and your co-investigators to conduct this research?

Cost-effectiveness analysis (CEA) is a tool to examine the costs and health outcome of an intervention by comparing it with another intervention—often the current standard of care. In many countries worldwide, healthcare decision-makers use CEA to make decisions about the adoption of new drugs and other health technologies. However, in the United States, where many payers operate in a wide range of settings, the use of CEA is more complicated.

In this study, we sought to better understand the current use of CEAs among healthcare decision-makers in the United States. We also sought to identify barriers to more widespread use and potential solutions for overcoming those challenges.

Please briefly describe your study and its findings. Were any of the outcomes particularly surprising?

To address these questions, we conducted a survey of healthcare decision-makers via Xcenda’s FormularyDecisions. FormularyDecisions is a secure online platform that facilitates information exchange between pharmaceutical manufacturers and a community of more than 2,500 healthcare decision-makers.

We found that the majority of healthcare decision makers use CEA occasionally. Nearly 40 percent of respondents reported they use it always or very frequently. The majority of healthcare decision-makers find CEA useful in coverage decisions for informing cost-share, prior authorization and price negotiations. Timely access to CEAs remains a challenge—and priority area to address in order to drive more widespread use. In listing factors that served as barriers to using CEAs, respondents cited three primary issues: not available in a timely fashion, only available after a coverage decision and local data isn’t available to adjust external CEAs for local use.

Overall, the study results suggest that the use of CEAs in formulary decision-making is increasing, especially through the use of externally conducted reports, such as those produced by ICER.

What are the possible real-world applications of these findings in clinical practice?

Our findings point to a growing recognition among U.S. payers of the value of CEAs when making decisions about the adoption of health technologies. We anticipate this trend will continue to increase in the coming years. As such, it’s increasingly important for technology manufacturers, such as pharmaceutical companies, to communicate their own value message through the dossiers they can share with payers.

Do you and your co-investigators intend to expand upon this research?

We plan to continue to monitor and report on payer activity and the use of ICER reports through the FormularyDecisions platform.

Drummond M, Gladman J, Yeung K, et al. Are US payers getting to grips with cost-effectiveness analysis?. Poster presented at: AMCP 2021, April 12-16, 2021; Virtual. 

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