Affordability, Cost-Effectiveness and Uncertainty: An Integrated Approach for Decision-Making on Medicines

The main objective of this thesis was to develop an integrated approach of cost-effectiveness, affordability and the associated uncertainty in order to improve decision-making on medicines. To achieve this, the current magnitude of uncertainty and its management in reimbursement decision-making needed to be assessed. Furthermore, it was imperative to identify and to develop methods for improved quantification as well as improved management of various sources of uncertainty, thereby contributing to improved decision-making on access to innovative medicines. Besides, a method to integrate affordability and cost-effectiveness needed to be developed. For this, the relationship between the willingness-to-pay threshold and Budget Impact (BI) needed to be elucidated and quantified. The findings presented in this thesis can lead to the following implications: Making the optimal decision at the right time: When policy-makers require affordability to be part of decision-making and not merely for price negotiations, affordability must be appraised in conjunction with cost-effectiveness and uncertainty. The herein presented population Net Monetary Benefit (pNMB) approach is the only method that currently achieves this and can include time and flexibility using Real Options Analysis (ROA). Revisiting budget impact: The current evidence-base on the inaccuracy of BI estimates, supplemented by the work presented in this thesis, unequivocally requires decision-makers to accept that BI in its current form can be no more than a tool for price-negotiations. However, BI by means of opportunity costs, definitely has a role in driving reimbursement decisions. In order to warrant such a role for BI, BI estimation techniques should be improved. This thesis provides the foundation of a new BI estimation paradigm that does justice to the opportunity costs associated with public funding of medicines. Moving towards a continuous access paradigm: The bivariate distribution of pNMB using BI and the Incremental Cost-Effectiveness Ratio (ICER) can be a very beneficial tool for designing managed entry agreements for novel medicines. Combined with incorporation of timeliness by for example ROA, this approach could lead to an actively managed more flexible and continuous access paradigm here the distinction between early access and regular is finally seamless. Medicine Pricing: Medicine prices can be used as a variable in the pNMB approach. Then using a threshold approach, the maximum price given the current evidence on cost-effectiveness and BI, including uncertainty, could be generated. This fully transparent method can easily be updated over time and can thus deliver a new pricing model where effectiveness, quality of evidence and affordability transparently coalesce into a product’s maximum price. To conclude, an integrated approach of cost-effectiveness, affordability and the associated uncertainty has been developed: The herein presented pNMB-driven method that integrates these aspects allows decision-makers to conduct a single, integrated appraisal of all possible BI and ICER scenarios that are driven by the inevitable uncertainty that accompanies these outcomes. This pNMB method is therefore able to provide decision-makers with information on the potential risk and value of medicines that was not possible before