Biosimilars and HTA: Results of a Roundtable Discussion

What is the Role of HTA for Biosimilars?OHE convened a roundtable to discuss using HTA to assess biosimilars, including which methods are most appropriate in specific situations. Just published is an OHE Briefing that summarises that discussion[1].

Biosimilars[2] present a range of challenges to both regulators and HTA entities. The number that are available on markets worldwide still is low, which means that experience with their assessment is limited.

OHE convened a one-day roundtable specifically to discuss whether and how biosimilars should be evaluated from a health economics perspective. Participating were ten experts, including leading academics and representatives from the UK regulatory agency, the MHRA; the three UK HTA entities, NICE and its Welsh (AWMSG) and Scottish (SMC) counterparts; and the UK industry trade association, the ABPI. Background for discussion at the meeting included an OHE literature review and ABPI’s position paper on biosimilar medicines. The published Briefing focuses primarily on discussion about recommendation five from the ABPI position paper: ‘Biosimilar medicines should be subject to health technology assessment processes in the UK’.

Current HTA policies for biosimilars in the UK

Currently in the UK, the Scottish Medicines Consortium (SMC) requires a full submission for all biosimilars that details its comparison with the originator, or reference, product. It does not require a particular type of economic analysis, but cost-minimisation analysis has been used for all seven approved submissions to date.

The All Wales Medicines Strategy Group (AWMSG) is more explicit, stating that cost-minimisation analysis is appropriate only when NICE or AWMSG has recommended the reference product for the intended indication or it is in widespread use for the indication. In all other cases, a cost utility analysis is required. In practice, of the seven decisions made, the analyses were cost minimisation, cost savings or budget impact.

NICE does not have a separate policy for biosimilars, although a consultation for one is now in progress.

Roundtable discussion

The sense of the discussion was that the need for HTA for a biosimilar is reduced when the reference product has been recommended by the HTA agency, or is the standard of care, and is expected to exhibit no clinical differences with the reference product.  In such cases, cost minimisation analysis should be sufficient, if HTA is necessary at all. Cost utility analysis would be more appropriate when the originator was rejected for reimbursement or its use restricted. In such cases, moreover, the comparator for the biosimilar HTA assessment should be the standard of care, not the reference product. The majority of the roundtable participants urged that the process be flexible—both for selecting which biosimilars to subject to HTA and which HTA approach to use.

The roundtable also agreed that it is important to prescribe biosimilars by brand name, rather than INN name, to allow tracking of possible adverse events. Because of the nature of biotherapeutics, moreover, physicians and patients should agree explicitly when a biosimilar is substituted for the originator product or for another biosimilar.

Download Mestre-Ferrandiz, J. & Towse, A., 2014. What is the role of HTA for biosimilars? Briefing, 54, London: Office of Health Economics.

For other OHE publications on biosimilars, click here.

For additional information, please contact Jorge Mestre-Ferrandiz.

[1] All participants of the roundtable had an opportunity to suggest revisions to the draft summary, but the content of the final version is entirely the responsibility of its authors.

[2] A ‘biosimilar’ is a biologic medicine that is similar to an existing off-patent version.


Use of Cost-effectiveness Evidence in US Health Care: Seminar Briefing

Can the US Affords to Ignore Cost-effectiveness Analysis?Just published by OHE, this Seminar Briefing summarises remarks at an OHE Lunchtime Seminar by Dr James Chambers of the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center.

Compared to many other countries, cost-effectiveness analysis plays a limited role in US health care. In this publication, Dr Chambers reviews the current use of cost-effectiveness analysis in the US and explores the potential value of including it in decisions about coverage for medical technology, particularly under Medicare, the national public programme primarily for people 65 years of age and older. He reviews the barriers in the US – both legislative and otherwise – to wider adoption of cost-effectiveness evidence as a basis for health care decisions and notes attempts to use payment reform instead to increase incentives for greater efficiency.

Download: Chambers, J., 2014. Can the US afford to ignore cost-effectiveness evidence in health care? Seminar Briefing. London: Office of Health Economics.


OHE Models Incentives for Antibiotic Drug Development

A new model aimed at encouraging the development of new antibiotics was presented[1] recently by OHE’s Chris Hoyle, who collaborated with Adrian Towse and Jorge Mestre-Ferrandiz in designing the model.

Antimicrobial resistance to existing antibiotics is an increasingly serious global health issue that extends to a number of diseases. Earlier OHE research defined the parameters of policy options, which must achieve two objectives: (1) encourage the development of new antibiotics to treat resistant microbes and (2) discourage the overuse that produces resistance.

Chris’s presentation, below, summarises the OHE model, which takes into account the value to society of new antibiotics as well as the risks and rewards for payers and the entities developing the new drugs. It concludes that traditional incentives for R&D/market exclusivity are likely to be insufficient to spur development, and that uncertainty and risk are too great for price alone to provide sufficient incentive. The most effective solution couples an advance market commitment, at national or supranational level, with careful local pricing.


OHE’s previous work on this issue has included thorough analyses of the policy issues worldwide as well as policy options specifically for use  in discussion in the EU. For blog posts about this research, please click here.

[1] Hoyle, C., 2014 Economic incentive for new antibiotics. Presentation at Superbugs & Superdrugs – A Focus on Antibacterials, London, 5-6 March.



Defining the Complementarity of Medical Research Across Sectors in the UK

ResearchersWith funding from an MRC grant[1], the OHE is collaborating with the King’s Policy Institute and RAND Europe on research that, for the first time, will estimate in monetary terms the complementary effect of spending on medical research in the UK by the pharmaceutical industry, charities and the public sector.

The charity, private and public sectors each play an important role in medical research in the UK. The pharmaceutical industry builds on knowledge developed by the public and charity sectors, translating research findings into products that can advance medical practice, preventing or treating illness. To date, however, the extent and characteristics of this process are poorly understood. The analyses that do exist have been done primarily in the US, with data that now are old. It is not clear how well these apply to the UK given differences in the two countries.

The current study will develop a methodology for estimating the magnitude of research spillover in the UK—specifically, how many additional pounds of pharmaceutical industry R&D spending are stimulated by an additional pound of medical research funded by the public or charity sector. It will improve the econometric approach that has been used in US studies and will create a current dataset of public and charity research spending in the UK by major therapeutic area. Work under this grant also will explore whether more private pharmaceutical R&D investment measurably stimulates more charity or public sector spending on medical research in similar therapeutic areas.

Research under the grant is expected to be complete in mid 2015. The investigators on the grant are: Jon Sussex, Yan Feng and Jorge Mestre-Ferrandiz from OHE; Jonathan Grant from the King’s Policy Institute, King’s College London; and Marco Hafner from RAND Europe.

For additional information, please contact Jon Sussex.

OHE’s interest in knowledge spillover and research synergies is long standing. For example, OHE collaborated with RAND Europe in sponsoring a forum to discuss key aspects of spillovers and identify the top priorities for policy research that could help bring spillover effects more explicitly into UK policy decisions. Participants were drawn from senior levels of industry, venture capital, research charities, academia and the public sector. The research being performed under the current grant was identified at the forum as one of two top priorities. For our earlier blog post on this forum, please click here. 

[1] Better measurement of the complementarity between UK public, charity and private medical research. MRC Methodology Research Programme, ref: MR/L010801/1




Using Performance Thresholds to Affect GP Behaviour: Evidence from Scotland

The tougher the better: An economic analysis of increased payment thresholds on the performance of general practice

Yan Feng

Whether and how a change in performance-related payment motivated change in GP behaviour in Scotland is investigated in a recent article[1] by OHE’s Yan Feng and colleagues, Ada Ma (Hong Kong government), Shelley Farrar (University of Aberdeen) and Matt Sutton (University of Manchester).

Under the NHS, general practitioners (GPs) are paid based on a mix of factors, including a pay-for-performance element, the Quality and Outcomes Framework (QOF), which was introduced in 2004. QOF rewards GPs according to performance on specific indicators. Although participation in the QOF is voluntary, it represents an important source of potential income for GPs and nearly all participate.

Previous literature has suggested that the observed improvements in quality of care for chronic disease patients in the QOF scheme were modest. Some research also has found associations between improvements in quality of care as the result of QOF incentives, as well as modest improvement in health outcomes, fewer emergency hospital admissions, lower health care expenditure, and reduced population mortality.

In this article, OHE’s Yan Feng and her colleagues investigate whether and how an April 2006 increase in the performance thresholds required for maximum payment under the QOF changed the behaviour of GPs in Scotland. A difference-in-differences estimator with fixed effects was employed to compare treatment for diseases with revised payment schedules to those without change. The results suggest that the increase in maximum payment thresholds in QOF improved GP performance on clinical indicators by 1.77% on average; low-performing GPs improved significantly more than their high-performing counterparts. The paper concludes that maximum performance thresholds are differentially effective in providing incentives for GPs and hold the potential for improving GP performance across all indicators.

[1]Feng, Y., Ma, A., Farrar, S. & Sutton, M., 2014. The tougher the better: An economic analysis of increased payment thresholds on the performance of general practice. Health Economics, Early view, doi: 10.1002/hec.3022.

For additional information, please contact Yan Feng.


Pricing Variations Within and Across Countries: Gauging Efficiency

Professor Patricia Danzon

Professor Patricia Danzon

OHE collaborated on two articles published in the journal Health Economics recently. In the first, OHE’s Adrian Towse and Jorge Mestre-Ferrandiz collaborated with Patricia Danzon of the Wharton School at the University of Pennsylvania to examine value-based pricing for pharmaceuticals. The research explores which approaches to pricing can produce the greatest efficiency within and across countries, given that countries vary substantially in average per capita income and that incomes within a country also may differ widely. The impact of the absence or presence of comprehensive insurance also is considered.

See: Danzon, P., Towse, A. & Mestre-Ferrandiz, J., 2013. Value-based differential pricing: efficient prices for drugs in a global context. Health Economics. [Online]. DOI: 10.1002/hec.3021.

In the second publication, OHE’s Adrian Towse collaborated with Patricia Danzon of the University of Pennsylvania and Andrew Mulcahy of the RAND Corporation. This paper analyzes what determines prices of originator and generic drugs across countries. The research focuses on drugs to treat HIV/AIDS, tuberculosis, and malaria in middle- and low-income countries (MLICs), with checks for robustness in other therapeutic categories and across the full range of incomes. The authors examine the effects of per capita income, income dispersion, competition from originator and generic substitutes, and whether the medicine is available from retail pharmacies or via tendered procurement by non-government organizations.

The study shows that drugs are least affordable relative to income in the lowest income countries and that relatively high prices in MLICs are associated with income inequalities within the countries.  Although prices of generics are about 30% lower than originators on average, the variance is large. Uncertainty about the quality of generics in these countries means that competition is based on brand, rather than price, and the entry of additional generic competitors has only a weak impact on prices. However, when tendered procurement imposes quality standards, multinational generic suppliers enter the market and prices of both originator and generic drugs are lower compared to retail pharmacy prices.

See: Danzon, P., Mulcahy, A. & Towse, A., 2013. Pharmaceutical pricing in emerging markets: effects of income, competition, and procurement. Health Economics. [Online]. DOI: 10.1002/hec.3013. (For a more comprehensive summary of an earlier version of this article, please click here.)

Professor Danzon also presented this research at OHE’s 50th anniversary conference. The conference proceedings are available for download from this website by clicking here.


Benefiting from the Promise of Personalised Medicine: Recent OHE Presentations

OHE’s Adrian Towse participated in a two-day workshop convened by the Biotherapy Development Association to discuss the process and problems that surround decisions about pricing and reimbursement for innovative oncology medicines in Europe. His presentation, below, focused on the situation in England, including the context and current status of pricing and reimbursement decisions, issues that are peculiar to England’s approach, and others that are common across countries, including those just gaining attention. The latter principally include HTA for companion diagnostics, which can improve both the efficiency and effectiveness of cancer therapies, and pricing by indication rather than adopting a single price for all of a medicine’s uses.

Personalised medicine holds great promised for both improving patients’ outcomes and enhancing the economic efficiency of treatment. Medicines paired with diagnostics are the backbone of personalised medicine, presenting new challenges for health technology assessment. The situation in England, particularly how NICE might respond to this challenge, was the focus of the third networking event co-sponsored by the Association of the British Pharmaceutical Industry (ABPI) and the British In Vitro Diagnostics Association (BIVDA). At this one-day event, speakers set the stage for discussion by describing the context of this challenge for England.

OHE’s Adrian Towse presented on how economic concerns affect development of and access to stratified medicine. He discussed the elements of value of diagnostic tests (see our earlier blog post), and described the conditions needed to both foster useful assessments and ensure subsequent use in the marketplace. His topics included issues of evidence generation, incentives for innovation, the need for flexible approaches to ensuring patients’ access coincident with evidence development, and encouraging uptake and use.

For additional information, please contact Professor Adrian Towse.

OHE remains at the forefront of efforts to develop workable approaches to ensuring the best use and continuing development of personalised medicine. For a summary of recent activities, please click here.


Social Preferences and Burden of Illness in Value-based Assessments

Throughout the year, OHE presents a number of Lunchtime Seminars intended to discuss important current issues in health economics. On 30 January, OHE invited Dr Donna Rowen of the University of Sheffield to present her recent research on defining social preferences.

Dr Rowen’s seminar presentation was based on the results of a recent paper, Eliciting societal preferences for burden of illness, therapeutic improvement and end of life for value based pricing, which she co-authored with colleagues in the Department of Health Policy Research Unit in Economic Evaluation of Health and Care Interventions (EEPRU) at the University of Sheffield. The paper uses evidence from a large, online, discrete-choice experiment to measure the public’s preferences about assigning treatment priority based on severity of illness, likely gain in quality of life, and whether a patient is near the end of life. Survey participants were asked to indicate which patient subgroups should be assigned higher priority by the NHS, allowing the authors to calculate the strength of any social preference for providing health care to the sickest patients first.

The research is intended to inform changes in 2014 in NICE’s methods of value assessment. NICE may replace the existing system of QALY multipliers for end-of-life patients with a more detailed system of burden-of-illness weights derived from the results of the studies by Dr Rowen and colleagues.

The slides for this presentation may be viewed and downloaded by clicking here.

OHE’s Koonal Shah also has been involved in research intended to determine public preferences and assess alternative methods for collecting such perspectives. His research, undertaken in collaboration with colleagues from the University of Sheffield, used similar methods and focused specifically on attitudes towards assigning priority for end-of-life treatment. However, Koonal’s study presented information to survey participants in slightly different, but potentially important ways, such as describing each patient’s gain from treatment rather than health status or life expectancy as the result of treatment.

In January, Koonal presented his findings at the University of Oxford as part of the Health Economics Research Seminar Series at the University of Oxford. His presentation appears below.

 Koonal’s related publications include:

Shah, K.K., Tsuchiya, A. & Wailoo, A.J., 2013. Valuing health at the end of life: an empirical study of public preferences. European Journal of Health Economics, Epub ahead of print. doi: 10.1007/s10198-013-0482-3.

Shah, K. & Devlin, N., 2012. Understanding social preferences regarding the prioritisation of treatments addressing unmet need and severity. Research Paper 12/05, London: Office of Health Economics.

Shah, K., Praet, C., Devlin, N., Sussex, J., Appleby J. & Parkin, D., 2012. Is the aim of the English health care system to maximize QALYs? Journal of Health Services Research and Policy, 17(3), pp. 157-164.

Shah, K., Tsuchiya, A., Risa Hole, A. & Wailoo, A., 2012. Valuing health at the end of life: a stated preference discrete choice experiment. NICE Decision Support Unit report. Sheffield: Decision Support Unit.

For further information, please contact Koonal Shah.



Variations in Outcome and Costs in NHS Hospitals: Recent Report

Variation in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected dataIn a recent report[1],  OHE’s Nancy Devlin and colleagues draw an important conclusion with respect to four common surgical procedures in NHS hospitals in England, that  “ . . . no general evidence [shows] that hospitals with lower resource use have worse health outcomes . . .” This is a particularly salient finding in this time of economic downturn, when using NHS resources to their full extent is crucial.

The report, Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data, is co-authored by Andrew Street, Nils Gutacker, Chris Bojke and Silvio Daidone of the Centre for Health Economics at the University of York and OHE’s Nancy Devlin. It was funded by a UK NIHR Health Services Research Grant.

Since 2009, the NHS in England has been collecting patient-reported outcomes (PRO) data routinely for four elective procedures: unilateral hip replacement, unilateral knee replacement, groin hernia repair and varicose vein surgery. This study uses Hospital Episode Statistics (HES) data combined with reference cost data and PRO data for patients who had these treatments between April 2009 and March 2010.

The report contains two sets of analyses. The first uses econometric techniques to examine variations in the dimensions of patients’ self-reported health status; the ultimate purpose is to facilitate feedback to patients to help them choose among hospitals based on the quality of surgical care. The second part of the project focuses on hospital performance and the relationships between PROs and resource use.

The research produces a number of important insights about the best approaches for using PRO data, the determinants of health outcomes for individual patients, and whether and what variations in outcomes can (and cannot) be explained by differences across hospitals in resource use. In addition to innovative econometric analyses, the report includes useful and specific summaries of the implications of its findings for “practice”—i.e. in analysis of PRO data and in their use to both benefit patients and devise incentives for provide—and “research”—i.e. collecting and analysing data, and setting results in the wider context of hospital and health system performance.

For further information, please contact Professor Nancy Devlin. For an overview of OHE’s extensive activities in patient-reported outcomes measures, click here.

[1] Street, A., Gutacker, N., Bojke, C., Devlin, N. & Daidone, S., 2014. Variations in outcome and costs among NHS providers for common surgical procedures: econometric analyses of routinely collected data. Health Services and Delivery Research, 2(1), pp. 1-112. doi: 10.3310/hsdr02010.


Contracting for Quality in the NHS: 20th Annual Lecture Publication

OHE’s Annual Lecture, given by Professor Alan Maynard in July 2013, is now available as a publication and can be downloaded from this website.

Contracting-for-Quality2014-LARGEProfessor Alan Maynard, University of York, delivered the 20th OHE Annual Lecture five months after release of the Francis Report, a public inquiry into serious failures in patient care at the Mid Staffordshire NHS Foundation Trust. This three-volume, 1,794-page report made 290 recommendations for more regulation. “Sadly”, Professor Maynard notes, “[Francis’s] proposals were not evidenced, not prioritised and not costed”.

As with many earlier inquiries into alleged deficiencies in care in the NHS, the Francis Report’s remedies emphasise additional regulation, an approach with which Professor Maynard disagrees. UK responses to perceived problems in health care quality, he notes, have produced continuous structural “re-disorganisation” over the past 40 years. These rarely have been evidence based; the disruptions created often were more profound than any improvement.

The alternative to “more regulation (as advocated by lawyers and public inquiries) is better regulation”, according to Professor Maynard. Better regulation, in turn, is based on evidence and economic analysis. Outcomes measurement is at the core of the economic approach to reforming health care proposed by Professor Maynard. Understanding outcomes, in turn, allows the adoption of effective incentives for change, both financial and non-financial.

A crucial issue is variation in clinical practice, long of concern in the UK and elsewhere, as Professor Maynard explains. “Contracting for quality and patient protection in the NHS, and all other health care systems”, he concludes, “requires scepticism about medical practice and rigorous performance review of clinicians by clinicians. . . . Reputation should be the engine of quality improvement that is led by clinicians, rather than repetitive political reorganisations and increases in legalistic regulation”.

Download Maynard, A., 2014. Contracting for quality in the NHS: putting the Francis Report in perspective. Annual lecture series. London: Office of Health Economics.

Professor Maynard’s slide presentation for the lecture also is available by clicking here.