Comparative Effectiveness

The need for continuous cost-effectiveness analysis

At drug launch, treatments have some benefit and cost. However, drug prices may change over time. Additionally, treatment benefits may rise or fall depending on how well efficacy translates into effectiveness and how well physicians learn to manage adverse events.

Mattingly and Love (2020) provide a case study of how cost-effectiveness analysis can change over time. They examine the case study of hepatitis C virus (HCV) treatments, which is well known since sofosbuvir’s “$1,000 a pill” list price sparked a lot of debate, despite broad evidence that the treatment was cost-effective. New HCV treatments later entered the market including elbasvir/grazoprevir, sofosbuvir/velpatasvir and glecaprevir/pibrentasvir. The authors then examine the cost effectiveness of the best available HCV treatment in 2010, 2012, 2014, 2016 and 2018. They find that:

No HCV treatment resulted in a gain of 11.54 QALYs over a 20-year time horizon at a cost of $42,938. Costs for treated groups were $69,075, $123,267, $125,431, $86,782, and $56,470 for the 2010, 2012, 2014, 2016, and 2018 scenarios, respectively. QALYs gained for treated groups were 12.90, 12.97, 13.34, 13.39, and 13.46 for the 2010, 2012, 2014, 2016, and 2018 scenarios, respectively. The incremental cost-effectiveness ratios in each year compared with no treatment were $19,218 per QALY, $56,104 per QALY, $45,829 per QALY, $23,699 per QALY, and $7,048 per QALY.

In short, treatments became more and more effective over time. Initially, cost rose from 2010-2014 and cost-effectivenes worsened between 2010 and 2012. However, as effiacy continued to rise and cost began to fall, cost-effectiveness improved from 2012 to 2018. Now, treatment costs are less than at launch despite new treatments adding more than 0.5 QALYs per patient.

Mattingly and Love make a compelling case that value assessment is not a one-time endeavor, but needs to be revisited as a treatment landscape evolves.

1 Comment

  1. Enjoyed reading this article. I agree fully about the importance of continuous cost effectiveness analysis. There are several variables at play including efficacy, effectiveness, physician’s role in managing/treating, responsiveness and prognosis and price changes. Thank you for this vital information.

    Rajat Dhameja, MD, MHA
    Healthcare Executive
    Providers, Payers

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