How Economic Evaluation is Used
  for Drug Reimbursement and
       Formulary Decisions
     Asia Pacific Perspective

    Gary M. Oderda, Pharm.D., M.P.H.
         Professor and Director
      University of Utah College of
                                   Current Status
 • At the ISPOR Seoul meeting in 2008 nearly
   every Asian country indicated they use a
   version of Health Technology Assessment in
   making drug use reimbursement and
   formulary decisions.
 • In most countries these decisions are made
   without considering cost effectiveness.
 • Pharmacoeconomic based Health
   Technology Assessment is growing but small
Yang, Bong-Min, The Future of Health Technology Assessment in
Healthcare Decision Making in Asia. Pharmacoeconomics 2009;27(11):891-901
             Current Status
Formal HTA Programs   Informal HTA Programs
    •   Australia           •   Bangladesh
    •   Malaysia            •   Bhutan
    •   Singapore           •   Brunei
    •   Hong Kong           •   Cambodia
    •   New Zealand         •   India
    •   China               •   Indonesia
    •   Phillipines         •   Laos
    •   Korea               •   Maldives
    •   Thailand            •   Mongolia
    •   Taiwan              •   Nepal
    •   Iran                •   Pakistan
                            •   Sri Lanka
                            •   Vietnam
         Presentation Focus
• Four countries at varying phases of
  development will be discussed
  •   Australia
  •   Taiwan
  •   South Korea
  •   Thailand
• Population
• GDP $809.2
  billion (2008)
• GDP Per Capita
• Universal Health Insurance since 1984
• Government supports
  • Medicare
    • Hospitals
    • Providers (Physicians and Others)
  • Pharmacy Benefits Scheme (PBS)
    • All residents are eligible
    • Lower co-pays for low income patients
• PBS established by the National Health
  Act of 1953 and ammendments
  • Objective – To provide access to life
    enhancing medicines at an affordable price
    taking into account effectiveness, cost and
    cost-effectiveness of medicines
  • The Government may negotiate prices
• Pharmacy Benefits Advisory Committee
  • Provides advice to the Minister of Health
  • Considers
    • Clinical Effectiveness
    • Safety
    • Cost Effectiveness
  • Mandatory submission of economic
    information by manufacturers
• PBAC Economic Guidelines
  • Societal Perspective
  • Only direct costs required
  • Must include
     • Comparison with treatment to be replaced
     • Evidence of effectiveness
     • Incremental and Sensitivity Analyses
  • Strong Preference for
     • Head to head trials
     • Cost Utility Analyses
• Coverage provided for new drugs that are being
  considered for PBAC listing
• Evaluation of submissions to PBAC (1994-
  2004, N=858) that included QALY’s gained
  (N=116) or Life Years gained (N=138)
• Compared to average submissions, the
  change in likelihood of coverage was
  • Clinical significance +21%
  • Life threatening conditions +38%
  • Increase of $A10,000 from mean value of
    $A46,400 -6% in incremental cost/QALY

             Harris AH, 2009
• Population
• GDP $738.8
• GDP Per Capita
• Social health insurance modeled after Japan and
• NHI Scheme 2005 - Single Payer system
• Health Care 6.1% of GDP (2006)
• Center for Drug Evaluation (CDE) established 2007
   – Provides evidence of comparative effectiveness and cost
   – Dossiers submitted to CDE undergo independent scientific
     assessment with additional input from the medical
   – Committee members and opinion leaders from medical
     associations serve as an external advisory board
• Bureau of NHI uses HTA evidence for listing and
• Deliberations and discussions are not made public
• Data submitters have opportunity for input
• Data submission is voluntary
• A guideline for submission exists (GMSPE) but it is
  not official
• Industry believe that conducting PE studies and
  confirmation of CE should guarantee a higher price
• Resource allocation depends more on negotiations
  than HTA evidence (Huang, N, Pricing and Reimbursement
    Meeting, Bangkok, 2008)
           South Korea
• Population
• GDP $1.344
• GDP Per Capita
              South Korea
• Launched a universal National Health
  Insurance system in 1989
• Operated at a deficit
• Guidelines for Economic Evaluation of
  Pharmaceuticals in Korea (KPEG)
• Policy using economic evaluation data in
  making drug reimbursement decisions (2006)
• Positive List System (PLS) created in 2008.
  Lists covered drugs selected utilizing economic
  evaluation data.
                South Korea
• Prior to the PLS
  – Large number of drugs on reimbursement list
     • 21,000
     • Cost effectiveness and budget impact rarely
     • Contained many substitutable drugs and a large
       number of small and medium sized companies
       competing strongly
  – Quick Adoption
     • Second in the world to review 25 of 61 new drugs in
     • Lack of adequate clinical and pricing data available
                South Korea
• All new drugs – PE HTA
• Existing drugs evaluated over time
• HTA Implementing Organization (HIRA)
  •   Company submits PE data
  •   Staff critique and prepare HTA report
  •   Reviewed by government appointed expert panel
  •   Concerns about bias, transparency, and staffing
  •   78 drugs evaluated from January 2007 to June
          South Korea
• Detailed information shared between HIRA
  and manufacturer but is not published
• ICER threshold is a key criterion used
• Population
• GDP $553.4 billion
• GDP Per Capita
• Universal Coverage Scheme (UCS) (30
  Baht Plan) implemented in 2001
• 3.5% of GDP related to health care
• Introduction of HTA viewed as key to
• HTA unit as part of the Ministry of Public
• National List of Essential Medicines
• Drugs approved by the Thai FDA based
  on efficacy, safety and quality
• Public health insurance pays for NLEM
• Public sector drug prices negotiated at
  central and hospital levels.
• Ministry of Commerce – price controls
  with ceiling prices
• Rapid Growth of HTA
• Health Intervention and Technology Assessment
  Program (HITAP) 2006
  • National guidelines for HTA (2008)
  • Introductory and Advanced training in economic
    evaluation issues provided
  • Working to increase staffing and infrastructure
  • Completed ~12 HTA evaluations
  • Revision of NLEM in 2008 was the first time that
    pharmacoeconomic evidence played an official role in
    designing reimbursement
•   Four countries
•   Four strategies
•   Some more advanced than others
•   All have made significant progress
•   We can all learn from their organization,
    successes and challenges.
•   Kim C. Health technology assessment in South Korea. Int J Tech
    Assessment in Health Care, 25:Supplement 1 (2009);219-223.
•   Sivalal S. Health technology assessment in the Asia Pacific Region.
    Int J Tech Assessment in Health Care, 25:Supplement 1 (2009);196-
•   Teerawattananon Y, et al. Historical development of health technology
    assessment in Thailand. Int J Tech Assessment in Health Care,
    25:Supplement 1 (2009);241-252.
•   Harris A, et al. The role of value for money in public insurance
    coverage decisions for drugs in Australia. A retrospective analysis
•   Halley D. The history of health technology assessment in Australia. Int
    J Tech Assessment in Health Care, 25:Supplement 1 (2009);61-67.
•   Yang B. The future of health technology assessment in healthcare
    decision making in Asia. Pharmacoeconomics 2009;27(11):891-901.

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