The use of health economics evaluation tools can mitigate uncertainty in early-stage decision making both from a development and adoption perspective.
By: M. P. Craven and M. Allsop, University of Nottingham and Bitecic Ltd, Leeds, UK
It is well known that pharmaceutical manufacturers spend vast amounts on evaluating new products. This is alongside demands from purchasers that the value of costly new products be demonstrated. Spending on medical device evaluation is historically less but rising. In 2003, Cookson and Hutton1 highlighted the increasing use of clinical and economic evaluations for devices at the high-risk, high-revenue spectrum in Europe and stated that greater use of these would be essential to enable purchasers to make decisions at the time of their launch. They also pointed out that while clinical evaluation is now highly regulated for medical devices, economic evaluation was typically left as a matter of self-regulation. This being so, an understanding of health economic principles is not yet pervasive in the industry, and expertise is lacking especially amongst smaller enterprises.
In a climate of economic austerity, there is great pressure on SMEs in terms of market access and finance for both development and day-to-day operations. In the UK context, although there is recognition by the government that the healthcare industry is a plus for the economy, there are fears of cutbacks in expenditure on medical technologies alongside the belt-tightening forecasts for the National Health Service (NHS). All of this points to minimising uncertainty in early stage decision-making within development and adoption processes.
Demand for economic evaluation has been steadily increasing from purchasers and regulators. In Britain, one of the outcomes of the Healthcare Industries Task Force initiative was to bring economic evaluation considerations into purchasing guidance by the creation, in 2005, of the Centre for Evidence-based Purchasing (CEP) out of the more technically orientated Device Evaluation Service. More recently the new National Institute of Health and Clinical Excellence (NICE) Evaluation Pathway Programme for Medical Technologies, that has recently subsumed the work of CEP, makes demands on manufacturers to provide their own evidence of economic value from existing literature or from de novo economic models. Cost effectiveness is something that is explicitly absent from their existing Interventional Procedures Programme. The NHS also has been striving to improve its level of innovation through the efforts of the National Innovation Centre and the National Technology Adoption Centre and through programmes such as QIPP (quality, innovation, productivity and prevention). This has resulted in wider interest in health economics in the NHS.
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| Figure 1: The HE tool application throughout the development process to focus cost-effectiveness thinking from idea generation to implementation in clinical service delivery. |
Since its inception, the UK collaboration MATCH (Multidisciplinary Assessment of Technology Centre for Healthcare) has maintained that uncertainty in decision making about medical devices can be mitigated by the use of formal methods and by mutual understanding of these methods by suppliers and buyers. As a partner of both industry and the NHS, MATCH identified the need for increased knowledge of health economics methods and for tools to support industry in using these. To introduce and demonstrate the tools to industry, MATCH began hosting workshops in 2007. The content of the workshops involves an overview of the MATCH portfolio of services and tools for use in industry, alongside focused presentations covering MATCH’s two major research themes—health economic evaluation and user needs assessment. Adopting this approach enables the presentation of a condensed and tailored discussion of tools for industry that stem from project work within the academic research groups that form MATCH.
Beneath is a description of workshops that have focused specifically on the presentation and demonstration of the MATCH health economic evaluation (HE) tool. The backgrounds of, and feedback gathered from, workshop delegates is discussed to provide insight into this means of engaging industry to enhance the understanding and practice of the economic evaluation of health technologies.
Determining cost effectiveness
The HE tool arose from discussions between MATCH, its industrial partners in the medical device industry and the NHS. With health economics receiving wider recognition as a means of evaluating innovative technologies, and the existence of a range of regulatory and reimbursement hurdles to overcome when bringing a medical device to market, MATCH sought to provide a tool to support those going through this process (Craven et al.2; Lu et al.3). It is advantageous for companies to identify which products are likely to have the greatest impact early in the development process. Therefore, the HE tool provides a means of supporting the innovator/manufacturer focus on gathering information that is required to develop a health economics perspective (costs linked to a new device, for example). This focus ensures that manufacturers are considering the generation of appropriate data during the early development stages, as a foundation to more refined cost-effectiveness arguments in the promotion and transfer of a new device into clinical service delivery (Figure 1). Data used in the HE tool does not need to be accurate at the beginning of the development process. Manufacturers can use different, hypothetical data sets to generate a range of scenarios that explore the parameters that are likely to affect the overall cost effectiveness of a device. This can be done by entering different data values, or using the sensitivity analysis built into the tool, in addition to working against different willingness-to-pay thresholds that might be set by NICE or a reimbursement agency. As a device continues through into the later stages of development, data that is generated during, for example, trialling and testing can be updated in the HE tool to provide an increasingly valid cost-effectiveness argument. These arguments are expressed in terms of a cost-utility analysis, which is aligned to one of the main methods used by NICE in its appraisal of healthcare technologies.
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| Overview of MATCH universities and project themes |
In order to adopt a strategy that facilitates access to those most likely to benefit from the workshops, a range of organisations were consulted. In-house workshops were hosted through member universities of the MATCH collaboration (Brunel University and the University of Nottingham, for example), and external networks were involved to support wider dissemination of workshop details and to host further MATCH workshops. MATCH focuses its support on the UK healthcare technology sector and user communities, thus workshops were tailored to representatives from small and medium size enterprises (SME) because of the dominance of this company structure within the sector (HM Government3). The Health Technology and Medicines Knowledge Transfer Network (HealthTech KTN), several of the regional Medilink organisations, South East Technologies Alliance (SEHTA) and the Association of British Healthcare Industries (ABHI) were all involved in separate workshop events. These organisations recruited interested industry members through their own networks, and hosted the events.
In total, 178 participants have taken part in 10 workshops across the United Kingdom, with feedback gathered from 56 delegates via postevent questionnaires. The workshops provided access to professionals from the healthcare industry, the NHS and university researchers in healthcare, amongst others.
Workshop feedback
Delegates from SMEs represented the majority of those providing feedback, reflective of their presence within the medical device sector. The remaining delegates were from large companies, universities, and the NHS. The roles of the delegates within the organisations varied, with the majority of participants working as directors (including general managers, and those serving specifically commercial, design, technology and sales roles). Remaining categories of job roles included managers (including general, sales, innovation, product development and health economics), managing directors, chief executives, research associates and senior researchers, consultants, and sales and marketing staff.
The HE tool was designed for medical device companies to implement a basic cost-effectiveness analysis to compare the costs and outcomes of a clinical intervention using their product with an existing alternative. In line with suggestions that manufacturers should consider such value assessment during an early stage of development to support marketing and acceptance (Luce and Elixhauser5), most delegates suggested that the HE tool would be of use during research and development. The application of its use within sales and marketing work was also notable, perhaps stemming from the framing of a technology to support transfer through procurement practices, for example. Less frequent suggestions of its application included use within commissioning, the formation of grant applications, and business development. Therefore, the workshops were successful at maintaining and/or developing delegates’ views on the application of HE within the early stages of product development; its value in the later stages of product development was also noted.
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| Overview of the backgrounds to workshops delegates, and the breakdown of roles represented within the sectors |
Delegates were asked about how they currently demonstrate the value of a product from their company. The most common means of achieving this was through the results of clinical trials and other studies. Several respondents cited the use of key opinion leaders. Although several companies noted the use of cost-effectiveness studies, very few delegates made reference to aligning the representation of value in their innovation with those sought by NICE and for technology adoption within the NHS. To demonstrate the value of technology within this context, comparisons are often made between the cost of an innovation with those of an existing device or treatment, whilst accounting for any differences in health benefits that can be gained by a patient being treated with the innovation versus an existing device or treatment. The calculations rely on cost-utility analyses, and therefore a basic understanding of health economics is required in order to use this to express the value of an innovation. MATCH’s HE tool bridges this knowledge gap by providing an accessible means to devise analyses that can promote the framing of technology for the NHS or other health system that uses the Quality Adjusted Life Year (QALY) as a measure of patient benefit.
Among workshop attendees, the understanding of health economics prior to the MATCH presentations was mixed: most delegates indicated low or almost no knowledge of health economics (64%). Other delegates expressed medium (23%), high (11%) or expert knowledge (2%). It was expected that most delegates would have little to no understanding of health economics, given that the workshops were aimed at introducing attendees to the subject area, and its relevance to medical device development. Despite the initially low levels of health economics understanding, 81% of delegates suggested that they saw a requirement for the HE tool and would look to apply it within their own work. Areas of anticipated application included preparation of a business case to purchasers—an early sanity check before developing a more advanced cost-effectiveness analysis— to work alongside existing value proposition calculations and return on investment calculations on bids. The remaining 19% indicated only a possibility that they would implement the HE tool within their own work.
In summary, despite indications that most delegates had low levels of health economics understanding, a large proportion of those who attended workshops could identify a use and likely application of an HE tool within their company. Through integration of health economics thinking within the development of health technology, manufacturers are provided with support in both understanding and developing its cost effectiveness. MATCH is now focused on refining the existing HE tool, and looking to apply workshops to specific topics such as orthopaedics or cardiology, to demonstrate how cost effectiveness can be explored in a particular context. Having identified a demand for the workshops, MATCH will now look to explore how to refine the workshops and tools to further support industry in the value assessment of medical devices from concept to mature product. MATCH also provides workshops on formal methods and tools to support the capture of user needs and requirements.
References:
1. Cookson R, Hutton J., “Regulating the economic evaluation of pharmaceuticals and medical devices: a European perspective,” Health Policy, 63, 167–178 (2003).
2. Craven M. P. et al., “Deploying a spreadsheet tool for early economic value assessment of medical device innovations with healthcare decision makers,” Journal of Management & Marketing in Healthcare, 2, 3, 1–15 (2009).
3. Lu B et al., “Can Health Economics aid decision making in healthcare innovation in academia?” International Journal of Tech. Transfer and Commercialisation, In press.
4. HM Government, “Strength and Opportunity: The landscape of the medical technology, medical biotechnology and industrial biotechnology enterprises in the UK,” 2009.
5. Luce, B. R., Elixhauser A, “Outcomes Research: Documenting the value of a medical device,” Medical Device and Diagnostic Industry, January 1999.
Michael Craven, PhD,
is Senior Research Fellow, MATCH, Faculty of Engineering, University of Nottingham, University Park, Nottingham NG7 2RD, UK
tel. +44 1159 513 804
*Matthew Allsop, PhD,
is Senior Project Manager, Bitecic Ltd,
Icon Business Centre, 4100 Park Approach, Thorpe Park, Leeds LS15 8GB, UK
tel. +44 1133 970 324
* to whom all correspondence should be sent
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