Does Cost-Effectiveness Analysis Overvalue Potential Cures? Exploring Alternative Methods for Applying a "Shared...

Area of Science:

• Health Economics
• Health Technology Assessment
• Pharmacoeconomics

Background:

• Traditional cost-effectiveness analysis (CEA) faces challenges in valuing single or short-term therapies with substantial long-term quality-adjusted life-year (QALY) gains or cost offsets.
• This can lead to potentially unaffordable valuations for innovative curative treatments.

Purpose of the Study:

• To evaluate alternative methods for calculating and attributing economic surplus in CEA for single or short-term therapies.
• To inform pricing and payment mechanisms for novel curative treatments.

Main Methods:

• A systematic literature review identified existing methods for CEA of curative therapies.
• Three alternative methods were developed: capping annual comparator costs, sharing economic surplus (50%), and limiting the time horizon for surplus calculation (12 years).
• These methods were applied to economic models of three hypothetical condition-treatment scenarios.

Main Results:

• The 12-year cutoff had the greatest impact on threshold pricing for spinal muscular atrophy type 1.
• Capping cost offsets at $150,000 per year most affected the threshold price for a one-time hemophilia A treatment.
• For CAR T-cell therapy, 50% surplus sharing significantly reduced threshold pricing, while capping costs or using a 12-year threshold had minimal impact.

Conclusions:

• Health Technology Assessment bodies and policymakers must address the evaluation of single or short-term curative therapies.
• Alternative methods for calculating economic surplus yield significantly different assessment outcomes.
• These methods can foster societal discussion on equitable pricing for novel, potentially curative treatments.