Cost analysis of ambulatory blood pressure monitoring in initiating antihypertensive drug treatment in Australian general practice

The document attached has been archived with permission from the editor of the Medical Journal of Australia. An external link to the publisher’s copy is included.Objective: To compare the cost of ambulatory blood pressure monitoring (ABPM) with the putative savings made through treatment avoided by identification and non-treatment of those with "white coat" hypertension. Design: A cost analysis based on a model of four alternative strategies (no ABPM, yearly, two-yearly, or three-yearly monitoring) over a seven-year period applied to a case series from Australian general practice. Participants: 62 patients newly diagnosed by their GPs as having hypertension and requiring drug treatment. Main outcome measures: The proportion of patients shown to not need treatment. The discounted costs to the Pharmaceutical Benefits Scheme, Medical Benefits Scheme and patients. Results: 16 of 62 patients (26%; 95% CI, 15%–37%) were normotensive on ABPM and did not require treatment. All monitoring strategies are more expensive in the first year, but the initial costs are offset by year 3 and the monitoring strategies are cost saving thereafter. Sensitivity analysis shows that this result holds across a range of costs of pharmacotherapy and proportion of patients with white coat hypertension. Conclusion: The additional costs of 24-hour ABPM in the first year are offset by savings associated with patients with white coat hypertension who would otherwise have been treated.Ben Ewald and Brita Pekarsk

Trust, constraints and the counterfactual: reframing the political economy of new drugs.

This thesis uses an applied game theoretic framework to address the following question: What is the population health maximising decision threshold price for a new drug? This threshold accommodates: strategic behaviour; inefficiencies in the health care system; budget constraints; suboptimality of displacement to finance the additional cost of new drugs; failure of markets to develop evidence of unpatented services; and the relationship between drug price and future innovation and health. A framework (price effectiveness analysis, PEA) for the analysis of the reimbursement process as a strategic interaction is proposed and tested. PEA uses the results of cost effectiveness analyses as inputs in a model that derives the population health outcomes of reimbursement: the net health effect of i) adoption of the new drug; and ii) displacement to finance its additional costs. The first result is that the health shadow price, βc, is the population health maximising decision threshold, under the conditions of a fixed and allocatively inefficient budget: βc = (1/n-1/m + 1/d)⁻¹ where n is the most cost effective of existing programs in expansion or adoption; m is the least cost effective in contraction, and d is the average ICER of services displaced to finance the additional costs of the new drug at the offer price. Allocative inefficiency is characterised by m-n and suboptimality of displacement by m-d. The second result is that there are restrictive conditions under which there is an incentive for a rational institution to pay a price above βc to take into account the relationship between price and future innovation. However, if these conditions are met, the firm will prefer to raise funds through the capital market rather than contract with an institution. Currently, reimbursing institutions provide an incentive to develop evidence of the cost and effect of patented health technologies. Adopting βc as the new drug decision threshold places a value on evidence of the least and most cost effective services, regardless of whether they are being proposed for reimbursement. Hence, the market’s failure to provide evidence of unpatentable and unpatented health services is addressed and the health gains possible from a budget increased.Thesis (Ph.D.) -- University of Adelaide, School of Population Health and Clinical Practice, 201

Should financial incentives be used to differentially reward 'me-too' and innovative drugs?

Strategies to change the existing mix of innovative and 'me-too' drugs are intended to increase societal value of a given investment in R&D by providing an incentive for firms to invest in drugs that are more likely to be clinically innovative. How can financial incentives be used to change this mix? Will a strategy have its intended consequence or will it have the unintended outcome of reducing the rate at which the population burden of disease is reduced? The perspective of this review is a country such as Australia, Canada or the UK that has universal health insurance and a drug reimbursement process that is informed by economic evidence. A review of the literature was performed and the views of both the proponents and the opponents of such strategies and the mechanisms by which they could be implemented were summarized. The debate is based largely on hypothesized responses by firms to changes in incentives rather than empirical evidence. The main point of contention is whether a changed mix of new molecular entities (NMEs) increases or decreases the total amount of clinical innovation launched each year. The argument presented in this article is that, despite the limited empirical evidence, it is possible to improve our assessment of the likely costs and consequences of a proposed strategy by appealing to economic theory and observations about the reimbursement process. First, the empirical evidence supporting the view that changing a mix of drugs will improve clinical innovation is based on the average launched drug, not the marginal innovative drug otherwise not developed, and therefore could be misleading. Second, the dynamic and complex nature of evidence of clinical innovation will reduce the feasibility of using contractually based mechanisms to implement such a strategy. Also, a single country is unlikely to have an impact on R&D decisions, and variation in the per capita economic value of new drugs would make multi-jurisdiction contracts with one firm difficult to implement. Third, the quality of evidence of the clinical innovation of the lead drug could be reduced if there are fewer or no follow-on drugs. Finally, the existing inefficiencies in the process of displacement to finance new technologies from a capped budget reduces the efficiency with which any additional potential clinical innovation from NMEs will be translated to reduced population burden of disease. The article concludes that it is possible that such a strategy could be costly to implement, and the impact on global burden of disease uncertain in both direction and magnitude. This is likely to be the case even if the average clinical innovation content of innovative NMEs is higher than for me-too NMEs and the mechanisms designed to change the mix of NMEs are effective. Other options to improve the effectiveness with which pharmaceutical clinical innovation reduces burden of disease should be explored, including improved efficiency of both firm R&D and the process of disinvestment to finance new technologies.Pekarsky, Brit

PBS/RPBS cost implications of trends and guideline recommendations in the pharmacological management of hypertension

Copyright © 2002 Australasian Medical PublishingBen D Ewald and Brita Pekarsk