New health technologies often yield health benefits, but often at a high cost. In Australia, the processes for public reimbursement of high-cost pharmaceuticals and medical devices are different, potentially resulting in inequity in support for new therapies. We explore how reimbursement is different for medical devices compared with pharmaceuticals, including whether higher cost-effectiveness thresholds are accepted for pharmaceuticals. A literature review identified the challenges of economic evaluations for medical devices compared with pharmaceuticals. We used the ventricular assist device as a case study to highlight specific features of medical device funding in Australia. We used existing guidelines to evaluate whether ventricular assist devices would fulfil the requirements for the “Life-Saving Drugs Program”, which is usually reserved for expensive life–extending pharmaceutical treatments of serious and rare medical conditions. The challenges in conducting economic evaluations of medical devices include limited data to support effectiveness, device-operator interaction (surgical experience) and incremental innovations (miniaturisation). However, whilst high-cost pharmaceuticals may be funded by a single source (federal government), the funding of high-cost devices is complex and may be funded via a combination of federal, state and private health insurance. Based on the Life-Saving Drugs Program criteria, we found that ventricular assist devices could be funded by a similar mechanism to that which funds high-cost life-extending pharmaceuticals. This article highlights the complexities of medical device reimbursement. Whilst differences in available evidence affect the evaluation process, differences in funding methods contribute to inequitable reimbursement decisions between medical devices and pharmaceuticals. ... Read more

Background: In 2009, mandatory folic acid fortification of bread-making flour was introduced in Australia to reduce the birth prevalence of preventable neural tube defects (NTDs) such as spina bifida. Before the introduction of the policy, modelling predicted a reduction of 14–49 NTDs each year. Objective: Using real-world data, this study provides the first ex-post evaluation of the cost effectiveness of mandatory folic acid fortification of bread-making flour in Australia. Methods: We developed a decision tree model to compare different fortification strategies and used registry data to quantify the change in NTD rates due to the policy. We adopted a societal perspective that included costs to industry and government as well as healthcare and broader societal costs. Results: We found 32 fewer NTDs per year in the post-mandatory folic acid fortification period. Mandatory folic acid fortification improved health outcomes and was highly cost effective because of the low intervention cost. The policy demonstrated improved equity in outcomes, particularly in birth prevalence of NTDs in births from teenage and indigenous mothers. Conclusions: This study calculated the value of mandatory folic acid fortification using real-world registry data and demonstrated that the attained benefit was comparable to the modelled expected benefits. Mandatory folic acid fortification (in addition to policies including advice on supplementation and education) improved equity in certain populations and was effective and highly cost effective for the Australian population. ... Read more

Background: Risk-sharing arrangements (RSAs) can be used to mitigate uncertainty about the value of a drug by sharing the financial risk between payer and pharmaceutical company. We evaluated the projected impact of alternative RSAs for non–small cell lung cancer (NSCLC) therapies based on real-world data. Methods: Data on treatment patterns of Dutch NSCLC patients from four different hospitals were used to perform “what-if” analyses, evaluating the costs and benefits likely associated with various RSAs. In the scenarios, drug costs or refunds were based on response evaluation criteria in solid tumors (RECIST) response, survival compared to the pivotal trial, treatment duration, or a fixed cost per patient. Analyses were done for erlotinib, gemcitabine/cisplatin, and pemetrexed/platinum for metastatic NSCLC, and gemcitabine/cisplatin, pemetrexed/cisplatin, and vinorelbine/cisplatin for nonmetastatic NSCLC. Results: Money-back guarantees led to moderate cost reductions to the payer. For conditional treatment continuation schemes, costs and outcomes associated with the different treatments were dispersed. When price was linked to the outcome, the payer's drug costs reduced by 2.5% to 26.7%. Discounted treatment initiation schemes yielded large cost reductions. Utilization caps mainly reduced the costs of erlotinib treatment (by 16%). Given a fixed cost per patient based on projected average use of the drug, risk sharing was unfavorable to the payer because of the lower than projected use. The impact of RSAs on a national scale was dispersed. Conclusions: For erlotinib and pemetrexed/platinum, large cost reductions were observed with risk sharing. RSAs can mitigate uncertainty around the incremental cost-effectiveness or budget impact of drugs, but only when the type of arrangement matches the setting and type of uncertainty. ... Read more