Agreement promises faster access to more cost-effective treatments

A key feature of the new agreement between the Irish Pharmaceutical Healthcare Association, the HSE, and Department of Health, announced last week, is the promise of faster access to medicines once they have been proven to be cost-effective.

From Sept 2011 to Jun 2012, at least eight new drugs were deemed cost-effective — but were not available for patients through the reimbursement schemes. These included drugs for multiple sclerosis, heart conditions, bipolar disorder, and hepatitis C.

Therefore the new agreement is good news for patients, for whom access delays to cost-effective medicines should be reduced, meaning patients will have faster access to life-saving drugs.

This also avoids stockpiling, which was a fear in the past owing to long delays between drugs being deemed cost-effective and approval for the drug schemes being granted, which has associated storage and spoiling costs.

Granting approval and establishing cost-effectiveness, though intricately linked, are two distinctive processes. Approving and subsequently reimbursing drugs refers to the inclusion of the drugs on one or more of the HSE’s drug schemes through the patient care reimbursement schemes.

Across these, there are over 5,000 items classified as “drugs” deemed reimbursable. The average cost of drugs on the list is €28.19. The cost of these range from 1c (extemporaneous preparation items) to €735.02 (a 150mg pre-filled syringe for schizophrenia).

To establish cost-effectiveness an economic evaluation is performed. This estimates the costs and benefits of the drug and its alternative(s), and compares them. Thus it investigates if the new drug is value for money.

Such evaluations are necessitated by the need for choices in allocating scarce healthcare resources. The demand for healthcare resources is ever increasing, as society’s needs and wants grow and change.

The number and type of healthcare technologies, including drugs and medical devices, are also increasing.

While resources are consistently scarce, the current economic climate means healthcare sources are contracting even further. As a result, choices have to be made. Thus not all new drugs can be afforded and priority is given to those demonstrating value for money. This does not mean that the cheapest drug is chosen.

Rather, it looks at the cost of the additional health outcomes the drug delivers using an economic evaluation — usually a measure of health outcome.

The Irish Pharmaceutical Healthcare Association agreement is replacing the 2006 agreement. With respect to economic evaluations and assessing cost-effectiveness, the previous agreement stated: “The HSE reserves the right to assess new and existing technologies (pharmaceuticals, diagnostics, and devices) that may be high-cost or have a significant budget impact on the Irish healthcare system.”

It’s no surprise there has been an increased use of economic evaluations in the health sector, particularly with respect to drugs.

To date, responsibility for such evaluations lies with the National Centre for Pharmacoeconomics and the Health Information and Quality Authority.

A review of the evaluations completed indicates a 12-fold increase in the number of evaluations conducted between 2006 and 2011, of which 92% over the six years were evaluations of drugs. To date in 2012, there is a nine-fold increase in the number of evaluations reported compared to 2006.

While the details of when and where economic evaluations will be required under the new agreement are yet to be revealed, the trend over the last five years is sure to continue, as the Government strives to deliver value-for-money health services.

This, along with the commitment in the new agreement that new medicines found to be cost effective will be reimbursed, is promising news for healthcare in Ireland.

* Aileen Murphy is a lecturer at the Department of Economics, UCC