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Understanding Cost per QALY: Choosing Effective Medicines

Learn how SMC assesses medicine effectiveness based on Cost per QALY. Explore reasons for non-approval and why some medicines are rejected. Discover the importance of economic evaluation and quality of life considerations.

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Understanding Cost per QALY: Choosing Effective Medicines

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Presentation Transcript

  1. Why does SMC say NO We all want the most effective medicines All medicines cost money Health budgets are limited How do we choose?

  2. How would you choose? • Medicine A costs £1m gives 1 person 1 days extra life • Medicine B costs £1m gives a thousand people 1 years extra life • SMC uses Quality Adjusted Life Year or QALY to compare effect of medicine • Cost per QALY compares economics

  3. What is a QALY? • Quality Of Life 1 Perfect health • 0.5 poor health • 1 year @ QOL of 1 is QALY of 1 • 1 year @ QOL of 0.5 is QALY of 0.5 • 2 years @ QOL of 0.5 is QALY of 1 • Cost per QALY is economic value of medicine. Cost, quality and time

  4. Cost per QALY • Using Cost per QALY means that we can compare the economic effectiveness of medicines for different illnesses. • Not perfect, but it is a useful indicator

  5. Reasons for non-approval • No better than cheaper medicine • Not shown to work • Inappropriate comparator • Not sufficiently strong economic case

  6. Inappropriate Comparator • Test against placebo to see if it works • Test against another treatment (comparator) to see if it is better • But can only accept if comparator is a treatment normally used in Scotland

  7. Not sufficiently strong economic case This is one of the most frequent reasons given for non-approval. It does not necessarily mean that it is too expensive. • Doubtful use of clinical data • Over-optimistic assumptions • Inadequate sensitivity analysis • Very high cost per QALY

  8. Very high cost per QALY Can be a reason although very high cost medicines can be accepted. NICE and SMC decisions show that Cost/QALY<£20 000 often accepted £20-30 000 need strong case >£30 000 often rejected

  9. Top reasons for non-approval • Comparator wrong for Scotland • Doubtful use of clinical data • Over-optimistic assumptions • No economic evaluation • Failure to use final health outcome or calculate QALY (where appropriate)

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