Achieving dynamic efficiency in pharmaceutical innovation: Identifying the optimal share of value and payments required.

It has been argued that cost-effectiveness analysis of branded pharmaceuticals only considers static efficiency, neglects dynamic effects and undermines incentives for socially valuable innovation. We present a framework for designing pharmaceutical pricing policy to achieve dynamic efficiency. We develop a coherent framework that identifies the long-term static and dynamic benefits and costs of offering manufacturers different levels of reward. The share of value that would maximise long-term population health depends on how the quantity and quality of innovation responds to payment. Using evidence of the response of innovation to payment, the optimal share of value of new pharmaceuticals to offer to manufacturers is roughly 20% (range: 6%-51%). Reanalysis of a sample of NICE technology appraisals suggests that, in most cases, the share of value offered to manufacturers and the price premium paid by the English NHS were too high. In the UK, application of optimal shares would offer considerable benefits under both a public health objective and a broader view of social welfare. We illustrate how an optimal share of value can be delivered through a range of payment mechanisms including indirect price regulation via the use of different approval norms by an HTA body.

Cefiderocol for treating severe aerobic Gram-negative bacterial infections: technology evaluation to inform a novel subscription-style payment model.

Background: To limit the use of antimicrobials without disincentivising the development of novel antimicrobials, there is interest in establishing innovative models that fund antimicrobials based on an evaluation of their value as opposed to the volumes used. The aim of this project was to evaluate the population-level health benefit of cefiderocol in the NHS in England, for the treatment of severe aerobic Gram-negative bacterial infections when used within its licensed indications. The results were used to inform the National Institute for Health and Care Excellence guidance in support of commercial discussions regarding contract value between the manufacturer and NHS England. Methods: The health benefit of cefiderocol was first derived for a series of high-value clinical scenarios. These represented uses that were expected to have a significant impact on patients' mortality risks and health-related quality of life. The clinical effectiveness of cefiderocol relative to its comparators was estimated by synthesising evidence on susceptibility of the pathogens of interest to the antimicrobials in a network meta-analysis. Patient-level costs and health outcomes of cefiderocol under various usage scenarios compared with alternative management strategies were quantified using decision modelling. Results were reported as incremental net health effects expressed in quality-adjusted life-years, which were scaled to 20-year population values using infection number forecasts based on data from Public Health England. The outcomes estimated for the high-value clinical scenarios were extrapolated to other expected uses for cefiderocol. Results: Among Enterobacterales isolates with the metallo-beta-lactamase resistance mechanism, the base-case network meta-analysis found that cefiderocol was associated with a lower susceptibility relative to colistin (odds ratio 0.32, 95% credible intervals 0.04 to 2.47), but the result was not statistically significant. The other treatments were also associated with lower susceptibility than colistin, but the results were not statistically significant. In the metallo-beta-lactamase Pseudomonas aeruginosa base-case network meta-analysis, cefiderocol was associated with a lower susceptibility relative to colistin (odds ratio 0.44, 95% credible intervals 0.03 to 3.94), but the result was not statistically significant. The other treatments were associated with no susceptibility. In the base case, patient-level benefit of cefiderocol was between 0.02 and 0.15 quality-adjusted life-years, depending on the site of infection, the pathogen and the usage scenario. There was a high degree of uncertainty surrounding the benefits of cefiderocol across all subgroups. There was substantial uncertainty in the number of infections that are suitable for treatment with cefiderocol, so population-level results are presented for a range of scenarios for the current infection numbers, the expected increases in infections over time and rates of emergence of resistance. The population-level benefits varied substantially across the base-case scenarios, from 896 to 3559 quality-adjusted life-years over 20 years. Conclusion: This work has provided quantitative estimates of the value of cefiderocol within its areas of expected usage within the NHS. Limitations: Given existing evidence, the estimates of the value of cefiderocol are highly uncertain. Future work: Future evaluations of antimicrobials would benefit from improvements to NHS data linkages; research to support appropriate synthesis of susceptibility studies; and application of routine data and decision modelling to assess enablement value. Study registration: No registration of this study was undertaken. Funding: This award was funded by the National Institute for Health and Care Research (NIHR) Health Technology Assessment Policy Research Programme (NIHR award ref: NIHR135591), conducted through the Policy Research Unit in Economic Methods of Evaluation in Health and Social Care Interventions, PR-PRU-1217-20401, and is published in full in Health Technology Assessment; Vol. 28, No. 28. See the NIHR Funding and Awards website for further award information.

This project tested new methods for estimating the value to the NHS of an antimicrobial, cefiderocol, so its manufacturer could be paid fairly even if very little drug is used in order to reduce the risk of bacteria becoming resistant to the product. Clinicians said that the greatest benefit of cefiderocol is when used for complicated urinary tract infections and pneumonia acquired within hospitals caused by two types of bacteria (called Enterobacterales and Pseudomonas aeruginosa), with a resistance mechanism called metallo-beta-lactamase. Because there were no relevant clinical trial data, we estimated how effective cefiderocol and alternative treatments were by doing a systematic literature review of studies that grew bacteria from infections in the laboratory and tested the drugs on them. We linked this to data estimating the long-term health and survival of patients. Some evidence was obtained by asking clinicians detailed questions about what they thought the effects would be based on their experience and the available evidence. We included the side effects of the alternative treatments, some of which can cause kidney damage. We estimated how many infections there would be in the UK, whether they would increase over time and how resistance to treatments may change over time. Clinicians told us that they would also use cefiderocol to treat intra-abdominal and bloodstream infections, and some infections caused by another bacteria called Stenotrophomonas. We estimated how many of these infections there would be, and assumed the same health benefits as for other types of infections. The total value to the NHS was calculated using these estimates. We also considered whether we had missed any additional elements of value. We estimated that the value to the NHS was £18­71 million over 20 years. This reflects the maximum the NHS could pay for use of cefiderocol if the health lost as a result of making these payments rather than funding other NHS services is not to exceed the health benefits of using this antimicrobial. However, these estimates are uncertain due to limitations with the evidence used to produce them and assumptions that had to be made.

Using economic analysis to inform health resource allocation: lessons from Malawi.

Despite making remarkable strides in improving health outcomes, Malawi faces concerns about sustaining the progress achieved due to limited fiscal space and donor dependency. The imperative for efficient health spending becomes evident, necessitating strategic allocation of resources to areas with the greatest impact on mortality and morbidity. Health benefits packages hold promise in supporting efficient resource allocation. However, despite defining these packages over the last two decades, their development and implementation have posed significant challenges for Malawi. In response, the Malawian government, in collaboration with the Thanzi la Onse Programme, has developed a set of tools and frameworks, primarily based on cost-effectiveness analysis, to guide the design of health benefits packages likely to achieve national health objectives. This review provides an overview of these tools and frameworks, accompanied by other related analyses, aiming to better align health financing with health benefits package prioritization. The paper is organized around five key policy questions facing decision-makers: (i) What interventions should the health system deliver? (ii) How should resources be allocated geographically? (iii) How should investments in health system inputs be prioritized? (iv) How should equity considerations be incorporated into resource allocation decisions? and (v) How should evidence generation be prioritized to support resource allocation decisions (guiding research)? The tools and frameworks presented here are intended to be compatible for use in diverse and often complex healthcare systems across Africa, supporting the health resource allocation process as countries pursue Universal Health Coverage.