Exploration and Derivation of Incremental Cost-effectiveness Ratio Threshold for Accepting Health Interventions: Literature Review of Previous Decision

Grant Data
Project Title
Exploration and Derivation of Incremental Cost-effectiveness Ratio Threshold for Accepting Health Interventions: Literature Review of Previous Decision
Principal Investigator
Dr Wong, Carlos King Ho   (Principal investigator)
Professor Lam Cindy Lo Kuen   (Co-Investigator)
Start Date
Completion Date
Conference Title
Presentation Title
economic evaluation, cost-effectiveness, threshold, quality adjusted life-years, life expectancy
Health Services
Block Grant Earmarked for Research (104)
HKU Project Code
Grant Type
Seed Funding Programme for Basic Research
Funding Year
Owing to the rapidly development and increased cost of health intervention, health economic evaluation is an essential approach to critically appraise the benefit and limitations of new health intervention. Because of the limited constraints of healthcare resources, the integration of an emerging health intervention to healthcare system has to be well articulated with scientific justifications. From the perspective of health policy maker, the emerging health intervention is not only more effective but also more cost-effective when compared to conventional treatments that might be predominately used in routine clinical practice. By principle, health economic evaluation is a scientific process of review and assessment mandatory undergone by advisory body. Emerging health interventions in the Western countries were primarily assessed by single advisory body, for example, National Institute for Health and Care Excellence (NICE)1 in the UK, Pharmaceutical Benefits Advisory Committee (PBAC) in Australia, Canadian Agency for Drugs and Technologies in Health (CADTH) in Canada, Pharmaceutical Management Agency(PHARMAC) in New Zealand. Such advisory body in respective country have often monitored the effectiveness and cost-effectiveness of emerging interventions in healthcare, and therefore provided national guidance and recommendation on the decision of whether health intervention is likely to be accepted or rejected for implementation in routine clinical practice. The incremental cost-effectiveness ratio (ICER) of a new intervention relative to conventional intervention against the country-specific threshold value is a critical determinant for decision making, while other practical considerations including budgeting and ethical issues are also taken in consideration. In Hong Kong, evaluation and recommendations on publically funded health interventions were not the responsibility of a single advisory body but different committees, depending upon the nature of interventions. Drug Advisory Committee of Hospital Authority2 has the role of recommending pharmaceutical interventions in Hospital Authority. Existing and new pharmaceutical interventions approved by Drug Advisory Committee are included in the Hospital Authority Drug Formulary3 which has been initiated since 2005. Drugs in the formulary list are classified as general drugs with full government subsidy, special drugs to be provided at certain charges, or self-financing drugs. The review process was subject to challenge for a lack of transparency to general public and documentation of the scientific base for decision making.4 Different committees were set up to review scientific evidence and offer recommendations for the prevention of communicable and non-communicable diseases. For example, the Scientific Committee on Vaccine Preventable diseases5, under the Centre for Health Protection, provides scientific advice on strategies for vaccination in local population; the Cancer Expert Working Group (CEWG)6, under the Cancer Coordinating Committee, provides recommendations on suitable cancer prevention and screening measures at the population level. Different committees may use different recommendation criteria including ICER but the transferability of ICER threshold for review process remained uncertain in Hong Kong. There is growing body of health economic analyses that evaluated the health intervention utilized in the public sector of health services in Hong Kong and thereby compared with the overseas incremental cost-effectiveness ratio thresholds to inform decision making. However, incremental cost-effectiveness ratio threshold adopted for comparison is rather diverse, with the vast majority of studies using the threshold of GBP 20,000 - 30,000 cost per QALY gained suggested by NICE1 in the UK. Studies in the United States adopted the threshold of USD 50,000 per life-year or QALY gain suggested by a cost-effectiveness analysis of hospital renal dialysis study in 19927. Developed countries like the UK and US have generally agreed ICER thresholds but this is to be established in Hong Kong. One particular method8 for threshold estimation is to infer the value of ICER threshold from the previous decisions, such that the relationship between the decision and ICER values of previous health interventions was applied to measure an overall threshold value over the past decision making processes. Alternative approach of setting the ICER threshold as three-fold of national GPD per capita was recommended by the World Health Organization9. Research on the appropriate ICER threshold for Hong Kong is lacking. Purpose The aim of this study is to explore whether there are ICER thresholds among health policy makers in their decisions on accepting the health intervention in Hong Kong when the ICER of emerging intervention was below ICER threshold. By extension, the study will derive separate thresholds that will be applicable for a wide range of health problems and clinical settings. Objectives 1. To estimate the incremental cost-effectiveness ratio (ICER) thresholds applied by health policy makers in Hong Kong 2. To examine the relationship between the probability of acceptance and the incremental cost-effectiveness ratio, and 3. To identify other practical considerations making of previous decisions to accept the health intervention. References 1. National Institute for Clinical Excellence. Guide to the Methods of Technology Appraisal (reference N1618). London: NICE; 2008. 2. Hospital Authority. Drug Advisory Committee. http://www.ha.org.hk/hadf/en_dac.html. Accessed Accessed at 1 Jan 2015. 3. Hospital Authority. HA Drug Formulary. http://www.ha.org.hk/hadf/en_hadf.html. Accessed Accessed at 1 Jan 2015. 4. Lau EWL, Leung GM. Is the Hospital Authority's drug formulary equitable and efficient? Hong Kong Med J. 2008;14(5):416-417. 5. Scientific Committee on Vaccine Preventable Diseases, Centre for Health Protection,. http://www.chp.gov.hk/en/sas6/101/110/106.html. Accessed Accessed at 1 Jan 2015. 6. The Cancer Expert Working Group on Cancer Prevention and Screening. http://www.dh.gov.hk/english/pub_rec/pub_rec_lpoi/pub_rec_lpoi.html#Surveillance_and_Epidemiology_Branch. Accessed Accessed at 1 Jan 2015. 7. Grosse SD. Assessing cost-effectiveness in healthcare: history of the $50,000 per QALY threshold. Expert Review of Pharmacoeconomics & Outcomes Research. 2008;8(2):165-178. 8. McCabe C, Claxton K, Culyer AJ. The NICE Cost-Effectiveness Threshold: What it is and What that Means. PharmacoEconomics. 2008;26(9):733-744. 9. World Health Organization. Cost effectiveness and strategic planning (WHO-CHOICE): Cost-effectiveness thresholds. http://www.who.int/choice/costs/CER_thresholds/en/. Accessed 1 January 2015. 10. Robinson R. Economic evaluation and health care. What does it mean? BMJ. 1993;307(6905):670-673. 11. Husereau D, Drummond M, Petrou S, et al. Consolidated Health Economic Evaluation Reporting Standards (CHEERS) statement. BMC Medicine. 2013;11(1):80.