Just Released: Health and the Use of Medicines in Wales

Posted on 3 November 2011 by OHE News Editor

In this report commissioned by the ABPI in Wales, OHE Consulting examines the use of medicines in primary care in Wales since 2000 compared to the other countries of the UK. Key findings include a greater number of prescriptions per person in Wales and a more rapid increase in the number of prescriptions per person. This is linked to Wales’s more elderly population and higher rates of chronic illnesses. Despite the increase in volume of prescriptions, however, spending on medicines in Wales has decreased and at a faster rate than elsewhere in the UK. This is explained in large part by a more rapid increase in Wales in prescribing of lower cost medicines, including generics.

The report also shows that overall NHS spending in Wales has been growing faster than spending on medicines. Other recent research, referenced in the report, has suggested that Health Boards in Wales consistently underspend their medicines allocations, although the reasons remain unclear. At the same time, however, Wales lags behind England in the uptake of new primary and secondary care medicines that have received positive appraisals from NICE or from the All Wales Medicine Strategy Group. The report suggests that the increasing availability of generic medicines over the next few years could provide enough savings to help increase the timely uptake of recommended medicines.

For further information, please contact Lesley Baillie or Phill O’Neill at OHE.

Download Baillie, L., Hawe, E., O’Neill, P. and Greville, R. (2011) Health and the use of medicines in primary care in Wales. London: Office of Health Economics.

Does Relative Effectiveness Vary Across Europe?

Posted on 9 August 2011 by OHE News Editor

Ruth Puig-Peiró

The desire to use limited health care resources wisely has driven interest in understanding the relative or comparative effectiveness of medicines. In the Europe Union, discussions continue about whether a pan-European assessment of relative cost-effectiveness is possible and/or desirable. An enduring issue is whether variations among countries are great enough to create important differences in the effectiveness of treatment. Factors include, for example, patients’ characteristics, differences in clinical practice, and other variations at the institutional and national levels that affect both underlying population health and access to care.

At the Spanish Health Economics Association (AES) conference in May 2011, OHE’s Ruth Puig Peiró discussed a recent OHE study that reviewed the available literature on variations in medicines’ efficacy and effectiveness across countries. Considered were clinical trial studies and cost effectiveness studies published in English from 2000 to May 2010. Of the eight studies that qualified, most reported results of relative efficacy from clinical trials, rather than the effectiveness of the treatment in actual clinical practice. A table of the studies is available in the presentation.

The authors note that clinical trials are designed to demonstrate efficacy; they are not intended to tease out differences across countries, but to show overall treatment effects. The underlying assumption is that relative efficacy does not vary substantially from one country to another. Although some such research notes that variations do occur, these rarely are quantified by country.

No studies were found that examine differences in effectiveness across countries – i.e., how well a treatment performs in the real world. The authors suggest that collecting and analysing reliable and comparable registry data would be one means of producing analyses for this purpose, but recognise that this would be a complex and expensive undertaking.

Download Puig Peiró, R. Relative effectiveness across Europe: Do Member States diverge in clinical outcomes from treatment? Presentation at the Asociación de Economia de la Salud. Mallorca, Spain. 5 May 2011.

Effects of Public and Charitable Research Funding

Posted on 20 April 2011 by OHE News Editor

Continuing concern about the UK fiscal deficit makes it likely that government funding of health and medical research will remain under scrutiny. This will include both return on investment, in economic and health status terms, and the interplay between government and other sources of funding for medical research, specifically charitable funding.

Released today is an OHE study commissioned by Cancer Research UK that explores the interdependence between publicly funded and charity funded medical research. In particular, the study focuses on whether and how changes in the levels of government funding affect private funding for charities and, more broadly, medical research and the UK economy as a whole.

The research included a literature review and an interview programme involving key funders and stakeholders directly involved in the UK medical research system. The focus was on understanding the differences in research activities currently funded, how various stakeholders make funding allocation decisions, and the value of joint funding. In addition, OHE organised and facilitated a workshop that provided an element of peer review.

The study found substantial benefits, both financial and qualitative, from the existence of a diversity of funders for UK medical research. These include:

Enabling the conduct of high cost studies that could not be funded otherwise, by sharing costs and risks for research programmes
Providing a stable flow of financial support for medical research over the longer term
Building a favourable research environment by drawing on the differing skills and know-how of funders
Increasing research quality by creating a competitive research environment

Any future reductions in the level of government financial support for medical research are likely to cause disproportionate damage to the ability of charities to raise funds, the report concludes. The research revealed that public spending on medical research is likely to stimulate additional private donations to charities; a cut would have the opposite effect by signalling a decline in the perceived importance of funding for charities and for medical research.

Reductions in the level of government financial support for medical research are likely to have broader negative effects. These are discussed in the report and include, for example, a decline in UK GDP, the possible shifting of the locus of some research to outside the UK, a weakening of the UK’s medical research capacity, and potential harm to standards of care for patients in the UK.

The study recommends the collection or generation of additional UK-specific evidence to fill important gaps in knowledge. This includes how and to what extent public funding of science affects the level of private contribution to UK charities for medical research.

Download Garau, M., Mordoh, A. and Sussex, J. (2011) Exploring the interdependency between public and charitable research. Report for Cancer Research UK. London: Office of Health Economics.

Report on Orphan Drugs Released

Posted on 9 December 2010 by OHE News Editor

OHE Consulting has released new research on orphan medicinal products (OMPs) in Europe that assesses the effects of the European Union’s 1999 Regulation on Orphan Medicinal Products on the European economy and society. Data and indicators of activity related to OMPs in Europe have been patchy and scarce. To fill in many of these gaps, this study collected data on several indicators of activity, completed a confidential survey of OMP developers, developed four case studies and undertook a literature review. The result is a rich tableau of data and information that describe the effects of the OMP Regulation in some detail.

Download Mestre-Ferrandiz, J., Garau, M., O’Neill, P. and Sussex, J. (2010) Assessment of the impact of orphan medicinal products on the European economy and society. OHE Consulting Report. London: Office of Health Economics.

Australia’s Publicly Funded Vaccines Market

Posted on 1 December 2010 by OHE News Editor

The OHE recently published reports on the vaccines markets in Australia and in the UK. These were prepared as case studies for a project funded by the Federal German Ministry of Health (Bundesgesundheitsministerium.) The main findings of the Australian study are outlined below.

Most vaccines, except those for travel and seasonal influenza, are made available in Australia under the National Immunization Programme (NIP). The Department of Health and Ageing (DoHA) purchases and supplies NIP vaccines, which are free to patients. Immunisation

The decision whether to include a vaccine in the NIP is made by the Minister for Health and Ageing. An economic evaluation of the vaccine is the basis for a recommendation to the Minister from the Pharmaceutical Benefits Advisory Committee (PBAC) as to whether the vaccine should be included in the NIP or made available under the same scheme as for prescription drugs. If the Minister agrees, as has been the case to date, the Pharmaceutical Benefits Pricing Authority (PBPA) then must recommend a price to DoHA and assist it in negotiations with the manufacturer. A third group, the Australian Technical Advisory Committee, provides clinical and technical advice to PBAC, DoHA and vaccines manufacturers.

PBAC’s economic assessment of vaccines follows the same process as for prescription drugs, relying primarily on cost utility and/or cost minimization analyses. The authors point out that this may give insufficient weight to the important differences between curative pharmaceutical products and vaccines. PBAC’s approach also may affect pricing by encouraging companies to offer a lower price in order to increase the vaccine’s calculated cost effectiveness. In effect, this may create a target price that could weaken competition among manufacturers.

Pricing and supply of vaccines under the NIP have been centralized for some time, but changes in July 2009 increased centralisation by giving DoHA complete control over procurement. Before then, the eight state governments received funding for vaccine purchases from the central government and each had its own procurement process. Among the reasons for the 2009 change were the perceived inefficiency in the use of these funds by the states and uneven success in meeting immunisation targets. Although no real resistance to this change has surfaced, some anxiety exists among the states and the manufacturers about how well this will work in practice. Ensuring adequate and appropriate supply requires, for example, familiarity with local needs and practices — which the states have and DoHA currently lacks

In principle, the authors point out, centralised purchasing should have certain advantages for the government, including economies of scale and greater influence over manufacturers — not only in pricing, but also in encouraging both local investment and early access to new vaccines. For manufacturers, centralisation was seen as a saving in that it would no longer be necessary to go through procurement exercises in all eight states. Although this single-decision approach could carry some risks for suppliers, DoHA’s well-established practice of splitting the market among vaccine manufacturers mitigates this and is expected to continue.

Download Sussex, J., Shah, K. and Butler, J. (2010) The publicly funded vaccines market in Australia. OHE Consulting Report 10/02. London: Office of Health Economics.

The UK’s Publicly Funded Vaccines Market

Posted on 23 November 2010 by OHE News Editor

The OHE has just published reports on the vaccines markets in Australia and in the UK. These were prepared as case studies for a project funded by the Federal German Ministry of Health (Bundesgesundheitsministerium.) The main findings of the UK study are outlined below.)

The immunisation programme offered at no cost by the NHS throughout the UK is published by the Department of Health (DH) in “Immunisation against Infectious Disease” (widely known as ‘The Green Book’). In addition to routine childhood immunisations, this programme includes some vaccines for subpopulations with particular risks. It does not include seasonal influenza vaccines. To date, all four countries in the UK — England, Northern Ireland, Scotland and Wales — follow these recommendations.

The UK has highly centralised approach to procuring vaccines. According to the 2009 NHS Constitution for England, the DH must provide, through the NHS, all vaccinations that are recommended by the Joint Committee on Vaccination and Immunisation (JCVI). In existence since 1963, the JCVI includes 16 members, most of whom are medical/scientific experts. (Plans are to increase membership soon, adding more lay members and a health economist.) Decisions are based on both science and economics, with the JCVI applying NICE’s incremental cost-effectiveness ratio (ICER) of £20,000-30,000 per QALY in its decisions. In addition to data submitted by the manufacturer, JCVI has access to research on the value of particular vaccines undertaken by the Health Protection Agency, a publicly funded organisation, and may seek advice from other experts. Once the JCVI makes a recommendation, the DH requests bids from suppliers, settles on the actual purchase price, and handles all the logistics of procurement and distribution.

Stakeholders interviewed for the study identified both advantages and disadvantages to the system.

1. All favoured the experienced and specialised JCVI as the evaluator, rather than NICE, both because of the difference between vaccines and curative prescription medicines and because of the deep expertise of the JCVI membership.

2. At the same time, however, many expressed dissatisfaction with the slowness and lack of transparency in the JCVI process. Manufacturers also noted that the DH and the JCVI could be more strategic, and perhaps speedier in the review and decision process, if “horizon scanning” discussions with manufacturers were possible.

3. That JCVI applies NICE’s approach to economic assessments makes data requirements clearer, but adopting the same narrow, NHS-only perspective was considered limiting. Although this may maximise cost-effectiveness, it is not necessarily the most efficient method for the budget of the DH or the public sector as a whole. Moreover, the current approach does not explicitly consider the beneficial societal impact of vaccination, which is both broader and different in kind than that of prescription medicines generally.

4. In effect, the current assessment approach creates a target price for manufacturers that may weaken competition, particularly because the number of suppliers for most vaccines is either small or entirely absent.

5. Where more than one manufacturer produces a vaccine, supply is safeguarded by splitting contacts across suppliers. This also reduces the risk for manufacturers in that even those who had offered a higher bid price still have access to a portion of the market.

Overall, the study found that all parties appear willing to continue with the current, centralised system, albeit with some tinkering around the edges.

Download Sussex, J. and Shah, K.K. (2010) The publicly funded vaccines market in the UK. OHE Consulting Report 10/01. London: Office of Health Economics.

OHE Consulting: Local and Global Expertise

Posted on 14 September 2010 by OHE News Editor

OHE Consulting makes the expertise of the team at the Office of Health Economics available to organisations in all sectors – public, private and voluntary. The consultancy has the knowledge and skills to address a wide range of issues in health care and pharmaceutical policy, economics and statistics. Some topics we address are global in reach, such as the nature and effects of innovation, the challenges of health technology assessment, and the value of global private-public partnerships; some are country specific, such as competition in the NHS; others are sector specific, such as the relationship between spending on medicines and overall efficiency in health care expenditure.

Although some of our consulting products are entirely proprietary, clients may agree to make the results of others available publicly. An example is our report on trends in obesity, just published, that examines the current provision of bariatric surgery in England. The report estimates the potential economic benefits that could be achieved through better adherence to the NICE guideline on clinical support for obesity.

OHE Consulting’s clients include transnational organizations such as the World Bank, WHO and the European Commission; other research groups, such as the Rockefeller Foundation and the Bill and Melinda Gates Foundation; government agencies in the UK and elsewhere; and individual companies and associations in the health care, pharmaceutical and life sciences industries. Inquiries are welcomed.