Section 114 of the Food and Drug Administration Modernization Act of 1997 was intended to increase the flow of health economic information from pharmaceutical manufacturers to managed care decisionmakers. But the legislation raises a host of complex questions and has provoked diverse opinions from inside and outside the pharmaceutical industry. Moreover, the Food and Drug Administration (FDA) has yet to issue interpretative guidance on the subject. The challenge in implementing Section 114 lies in developing a policy that improves health economic information exchange while protecting consumers from misleading claims and preserving incentives for manufacturers to conduct rigorous studies.

Section 114 of the Food and Drug Administration Modernization Act of 1997 was intended to increase the flow of health economic information from pharmaceutical manufacturers to managed care decisionmakers. But the legislation raises a host of complex ... (more »)

Estimating preferences for states of health has been an active area of research in recent years. Unlike psychophysical approaches, which discriminate levels of health status, preference-based approaches incorporate values or utilities for health outcomes and can be used in cost-effectiveness analyses to aid resource allocation decisions. This chapter considers issues and controversies involved in using preference-based measures in economic evaluation in health care, with a particular emphasis on cost-utility analysis and the estimation of quality-adjusted life years. Topics considered include techniques for measuring preferences, the use of preference-based classification systems, the relationship between patient and community preferences, methods for obtaining utilities from clinical trials, mapping health status from health utilities, the development of "off-the-shelf" preference weights, and proposed alternatives to quality-adjusted lift: years. We also consider applications of cost-utility analyses to public health interventions. Although cost-utility analyses have become more popular recently, many challenges remain for the held, Widespread acceptance of the methodology likely awaits more consensus on measurement techniques, as well as educational efforts in the public health and medical communities on the usefulness of the approach.

Estimating preferences for states of health has been an active area of research in recent years. Unlike psychophysical approaches, which discriminate levels of health status, preference-based approaches incorporate values or utilities for health outc... (more »)

Purpose. The Hearth Utilities Index (HUI) is a generic, multiattribute, preference-based health-status classification system. The HUI Mark 3 (HUI3) differs from the earlier HUI2 by modifying attributes and allowing more flexibility for capturing high levels of impairment. The authors compared HUI2 and HUI3 scores of patients with Alzheimer's disease (AD) and caregivers, and contrasted results of a cost-effectiveness analysis of new drugs for AD using the two systems. Methods. In a cross-sectional study of 679 AD patient/caregiver pairs. stratified by patient's disease stage (questionable/mild/moderate/severe/profound/terminal) and setting (community/assisted living/nursing home), caregivers completed the combined HUI2/HUI3 questionnaire as proxy respondents for patients and for themselves. Results. Mean (SD) global utility scores for patients were lower on the HUI3 (0.22[0.26]) than on the HUI2 (0.53 [0.21]). Patient HUI3 utility scores ranged from 0.47(0.24) for questionable AD to -0.23 (0.08) for terminal AD, compared with a range of 0.73 (0.15) to 0.14 (0.07) for the HUI2. Among the 203 patients in the severe, profound, and terminal stages, 96 (48%) had negative global HUI3 utility scores, while none had a negative HUI2 score. The utility scores for caregivers were similar on the HUI3 (0.87 [0.14]) and HUI2 (0.87 [0.11]). Cost-effectiveness analysis of a new medication to treat AD showed somewhat more favorable results using the HUI3. Conclusions. The HUI2 and HUI3 discriminate well across AD stages. Compared with the HUI2, the HUI3 yields lower global utility scores for patients with AD, and more scores for states judged worse than dead. The HUI3 may yield substantially different results from the HUI2, particularly for persons who have serious cognitive impairments such as AD.

Purpose. The Hearth Utilities Index (HUI) is a generic, multiattribute, preference-based health-status classification system. The HUI Mark 3 (HUI3) differs from the earlier HUI2 by modifying attributes and allowing more flexibility for capturing high... (more »)

Managed care organizations would appear to be natural advocates for, and users of, cost-effectiveness analysis (CEA) as a tool for maximizing health outcomes for their covered populations within fixed budgets. There is, however, little evidence that CEA plays a major role in managed care decision making. The purpose of this paper is to identify barriers to both conducting and using CEA in managed care decision making. Lack of understanding about the value and applicability of CEA, and incentives that do not align with a lifetime perspective on either health outcomes or costs may be at least as important as perceived or real methodological limitations of the methodology. Research focused on ways to overcome these barriers, and thereby improve resource allocations, is recommended.

Managed care organizations would appear to be natural advocates for, and users of, cost-effectiveness analysis (CEA) as a tool for maximizing health outcomes for their covered populations within fixed budgets. There is, however, little evidence that ... (more »)

Background: Cost-effectiveness analyses of clinical preventive services are a potential means to aid public health resource allocation. Cost-utility analysis (CUA) is a specific form of cost-effectiveness analysis where results are expressed in terms of cost per quality-adjusted life year (QALY) gained. To increase the transparency and comparability of CUAs, standardization of methods has been recommended. Objectives: The purposes of this study were as follows: (1) identify published articles with original CUAs of primary and secondary clinical preventive services, (2) summarize the ratios found in these analyses, (3) identify articles employing comparable methods, and (4) explore analytic methods employed over time. Methods: As part of a larger study we conducted a comprehensive search of published CUAs in the area of clinical preventive services and systematically collected data on the results of the analyses and analytic methods employed. Cost-effectiveness ratios were standardized and organized into a table. Results: We found 50 CUAs pertaining to clinical preventive services (primary, n=22, 44%; and secondary, n=28, 56%) and 174 cost-effectiveness ratios. These ratios ranged from cost-savings up to $27,000,000/QALY, with a median of $14,000/QALY. Only three (6%) of the CUAs met minimum reference case requirements. There was no apparent improvement of methods over time. Conclusions: Immunizations and chemoprophylaxis have the most favorable cost-effectiveness ratios, and preventive services are more cost-effective when targeted at high-risk populations. However, there is wide variation in the methods used in these analyses. This study allows us to define where improvements in methodologic rigor need to occur, provides a base-line for future audits, and highlights disease areas in clinical preventive services that have been omitted or underevaluated. (C) 2000 American Journal of Preventive Medicine.

Background: Cost-effectiveness analyses of clinical preventive services are a potential means to aid public health resource allocation. Cost-utility analysis (CUA) is a specific form of cost-effectiveness analysis where results are expressed in terms... (more »)

Objective: To demonstrate the use of cost-effectiveness analysis to assess the economic impact of donepezil in the treatment of mild or moderate AD. Background: Cost-effectiveness analyses show the relationship between resources used (costs) and health benefits achieved (effects) for an intervention compared with an alternative strategy. Methods: We developed a model to estimate the incremental cost-effectiveness of donepezil compared with no treatment. Ne determined costs per quality-adjusted life-years gained, a measurement that enhances the comparability of diverse studies. The model projects the progression of AD patients into more severe disease stages and into nursing homes, Data from a randomized clinical trial of donepezil were used to assess the drug's impact on the B-week probabilities of progression. Data on the costs and health-related quality of life associated with different disease stages and settings were taken from published estimates and our companion cross-sectional study, respectively. Results: Donepezil costs are partially offset by a reduction in the costs of care due to enhancement in cognitive functioning and the delay to more costly disease stages and settings. The magnitude of this cost offset and of the effect of donepezil on health-related quality of life depends on the model's assumptions about the duration of the drug effect, where controlled data are lacking. If the drug effect exceeds 2 Sears, the model predicts that for mild AD the drug would pay for itself in terms of cost offsets. Conclusions: The results of the cost-effectiveness model presented here suggest that donepezil may be cost-effective but additional controlled data on long-term drug efficacy are needed.

Objective: To demonstrate the use of cost-effectiveness analysis to assess the economic impact of donepezil in the treatment of mild or moderate AD. Background: Cost-effectiveness analyses show the relationship between resources used (costs) and heal... (more »)

OBJECTIVES. For contingent valuation to provide valid values for policy making, it is important that respondents be well informed about the goods they are asked to value. Few studies, however, have tested the impact of providing this information This study assessed the impact of risk information on patients' willingness to pay for autologous blood donation and derived the willingness to pay in a sample of informed patients. METHODS. Patients were randomized either to receive information about the risks of complications from allogeneic (volunteer) blood transfusions or to base their willingness to pay responses on their own prior knowledge. Four hundred twelve autologous blood donors were recruited from three study sites. Self-administered questionnaires collected information on willingness to pay, risk perceptions, and socioeconomic information. RESULTS. As predicted by our theoretical model, providing risk information reduced the variance in the willingness to pay for autologous blood donation. A tendency for information to reduce the willingness to pay was also found, suggesting that uninformed patients, on average, overestimate the risks of allogeneic blood transfusions. The median willingness to pay in the informed sample was approximately $750 to $1,100, depending on the estimation method, compared with $800 to $1,900 in the uninformed group. Willingness to pay was significantly related to perceived transfusion risk, personal income, and dread of transfusions. CONCLUSIONS. Our results are consistent with an economic model where individuals update their prior risk perceptions with new information. The willingness to pay in the informed sample was far higher than the costs of autologous blood donation, suggesting that total benefits outweigh the costs of the procedure.

OBJECTIVES. For contingent valuation to provide valid values for policy making, it is important that respondents be well informed about the goods they are asked to value. Few studies, however, have tested the impact of providing this information This... (more »)

New treatments for Alzheimer's disease highlight the complex clinical and financial issues at stake with new pharmacotherapies. This paper describes cost-effectiveness analysis as a method for assessing these issues. Cost-effectiveness analyses show the relationship between resources used and health benefits achieved for a medical intervention compared with an alternative strategy. In analyses of treatments of Alzheimer's disease, costs include health care resources, such as diagnostic tests, medications and efforts to monitor or treat side effects, acute hospital care, physicians' services, home health care and nursing home care; non-health-care resources, such as support ser vices provided by paid caregivers; and time spent by family members in unpaid provision of care and by patients in seeking care or undergoing an intervention, Effectiveness of interventions call be assessed by measuring changes in patients' cognitive functioning or by measuring years of life gained and the quality of life during those years. Cost-effectiveness studies often make use of disparate data sources, including data collected as part of randomized controlled clinical trials, and they often use mathematical models to support estimates., Because economic evaluations of new interventions for Alzheimer's disease will likely play an increasingly influential role in clinical and resource allocation in the coming years, physicians and other health system stakeholders should familiarize themselves with the techniques of cost-effectiveness analysis and become critical consumers of the literature describing these analyses.

New treatments for Alzheimer's disease highlight the complex clinical and financial issues at stake with new pharmacotherapies. This paper describes cost-effectiveness analysis as a method for assessing these issues. Cost-effectiveness analyses show ... (more »)

Background. The use of in vitro fertilization has engendered considerable debate about who should have the procedure, whether health insurance should cover the cost, and if so, to what extent. We investigated the cost of a successful delivery with in vitro fertilization. Methods. We calculated the cost per successful delivery with in vitro fertilization (defined as at least one live birth) for a general population of couples undergoing in vitro fertilization and for two subgroups: couples with a diagnosis of tubal disease (who have a better chance of success), and couples in which the woman is over the age of 40 years and the man has a low sperm count (who have a lower chance of success). Information on charges per cycle of in vitro fertilization was obtained from six facilities across the country; delivery rates with this procedure were estimated from the literature. Results. On average, the cost incurred per successful delivery with in vitro fertilization increases from $66,667 for the first cycle of in vitro fertilization to $114,286 by the sixth cycle. The cost increases because with each cycle in which fertilization fails, the probability that a subsequent effort will be successful declines. Sensitivity analyses indicated that the cost per delivery ranges from $44,000 to $211,940. For couples with a better chance of successful in vitro fertilization (i.e., those with a diagnosis of tubal disease), it costs $50,000 per delivery for the first cycle and $72,727 for the sixth. For couples in which the woman is older and there is a diagnosis of male-factor infertility, the cost rises from $160,000 for the first cycle to $800,000 for the sixth. Conclusions. The debate about insurance coverage for in vitro fertilization must take into account ethical judgments and social values. But analyses of costs and cost effectiveness help elucidate the economic implications of using in vitro fertilization and thus inform the policy discussion.

Background. The use of in vitro fertilization has engendered considerable debate about who should have the procedure, whether health insurance should cover the cost, and if so, to what extent. We investigated the cost of a successful delivery with in... (more »)