In this book, we provide detailed instructions for creating a credible budget- impact anal- ysis for a new health-care intervention. We also present many examples showing how the different components of a budget-impact analysis have been completed for different types of health conditions. The components of a credible budget-impact analysis that are presented in this book are shown in Fig. 1.3 and include the following:
• A determination of the analytic framework needed for estimating the budget impact based on health system budget-impact analysis guidelines, health system and condition characteristics, decision-maker needs, and data availability
Analytic framework for a budget scenario
(Health system structure and BIA guidelines, condition characteristics, and data availability) Total population in the jurisdiction of interest
Annual budget and annual resources use and/or health outcomes
Patients living with disease/condition
Current Projected time 1 Projected time N
Drug costs
Disease related
costs
Treatment mix Treatment mix
Eligible
population Eligible
population Eligible
population Eligible
population
Eligible population
Eligible population Patients living with
disease/condition
Patients living with disease/condition
Drug costs
Disease related
costs
Drug costs
Disease related costs Treatment mix
Fig. 1.3 Conceptual diagram for completing a budget-impact analysis. BIA budget-impact analysis
J. Mauskopf and S. Earnshaw
• Estimation of the treated population size and relevant descriptors without and with the new intervention in the treatment mix
• Determination of the time horizon
• Determination of the current treatment mix and changes in this treatment mix over the analysis time horizon with and without the new intervention
• Estimation of changes in the intervention-related costs in the treatment mix over the analysis time horizon
• Estimation of changes in condition-related costs over the analysis time horizon
• Choice of computing framework to reflect the chosen analytic framework, condi- tion and intervention characteristics, and data availability
• Presentation of the results in a format useful for the budget holder
• Estimation of the uncertainty of the budget-impact analysis estimates
• Validation of the budget-impact analysis estimates
In Fig. 1.3, we present a general conceptual diagram that illustrates the calcula- tions needed to estimate the budget impact of the current or future treatment mix.
To keep the exposition simple, this book focuses on the budget impact of adding a new drug to current drugs for disease treatment. However, in Chap. 13 we describe approaches that can be used to address challenges that might be encountered when applying the methods described in this book to budget-impact analyses for other types of health-care interventions, such as vaccines, diagnostics, surgical procedures, and devices. Throughout the book, we illustrate each component of a budget- impact anal- ysis with examples. Each chapter also includes exercises to allow interested readers to develop their skills for completing each component of the analysis.
Exercises
Exercise 1.1 Discuss the importance of budget-impact analyses for developed versus developing nations.
Exercise 1.2 Discuss the importance of budget-impact analyses for acute ver- sus chronic conditions and for rare versus common conditions.
Exercise 1.3 A nation has not observed an increase in the average age of the populations for over 50 years. In fact, the population size within the nation has remained constant during this time. Explain why a budget-impact analysis may or may not be important to be performed when a new drug is introduced.
Exercise 1.4 List five different types of bodies (e.g., USA Managed Care Organizations) that might be interested in budget-impact analyses. Why might these bodies be interested in budget-impact analyses versus a cost-effectiveness analysis?
Exercise 1.5 Identify a drug that has just been introduced for a particular con- dition. Identify attributes of this drug that may affect a budget holder’s overall health-care budget.
Exercise 1.6 Identify a drug that has just been introduced for a particular con- dition. Discuss how the population characteristics, competing drugs, resource use/
costs, and results presented may differ when examining the impact that this drug has on a budget holder’s budget versus when examining the cost-effectiveness of this drug. Identify issues specific to the chosen drug and condition.
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Exercise 1.7 Obtain budget-impact analysis guidelines from at least two coun- tries. Compare and contrast components of the guidelines. How do the guidances differ? What level of detail is presented in the different guidance documents?
Exercise 1.8 Obtain guidelines for budget-impact analyses and cost- effectiveness analyses for one country. Compare and contrast the guidance around the population, competing drugs, resource use/costs, and results.
Exercise 1.9 A new drug enters the market at a cost that is comparable to or lower than other drugs currently being used to treat the condition. Discuss the importance of the use of a budget-impact analysis to support the affordability of this new drug.
Exercise 1.10 Identify situations in which a budget-impact analysis might be more important to a budget holder than a cost-effectiveness analysis.
References
Agency for Health Technology Assessment (AHTA). Guidelines for conducting health technology assessment (HTA). Version 2.1. Warsaw: AHTA; 2009.
Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. National health expenditure (NHE) accounts: NHE summary including share of GDP CY 1960 to 2014. 2016. https://www.cms.gov/Research-Statistics-Data-and-Systems/
Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.
html. Accessed 18 Mar 2016.
Cuyler A. The directory of health economics. 3rd ed. Edward Elgar Publishing; Cheltenham, UK 2014.
Drummond MF, Sculpher MJ, Claxton K, Stoddart GL, Torrance GW. Methods for the economic evaluation of health care programmes. 4th ed. Oxford University Press; Oxford, UK 2015.
Marshall DA, Douglas PR, Drummond MF, Torrance GW, Macleod S, Manti O, et al. Guidelines for conducting pharmaceutical budget impact analyses for submission to public drug plans in Canada. Pharmacoeconomics. 2008;26(6):477–95.
Mauskopf JA, Sullivan SD, Annemans L, Caro J, Mullins CD, Nuijten M, et al. Principles of good practice for budget impact analysis: report of the ISPOR task force on good research practices- -budget impact analysis. Value Health. 2007;10(5):336–47.
National Institute for Health and Care Excellence (NICE). Guide to the methods of technology appraisal 2013. 2013. http://nice.org.uk/process/pmg9. Accessed 5 Aug 2016.
Neyt M, Cleemput I, Van de Sande S, Thiry N. Belgian guidelines for budget impact analyses. Acta Clin Belg. 2015;70(3):175–80. doi:10.1179/2295333714Y.0000000118.
Patented Medicine Prices Review Board (PMPRB). Budget impact analysis guidelines: guidelines for conducting pharmaceutical budget impact analyses for submission to public drug plans in Canada. 2007.
Pharmaceutical Benefits Advisory Committee (PBAC). Guidelines for preparing submissions to the Pharmaceutical Benefits Advisory Committee. Version 4.5. 2015 http://www.pbac.pbs.gov.
au/content/information/printable-files/pbacg-book.pdf. Accessed 11 Sep 2015.
Sullivan SD, Mauskopf JA, Augustovski F, Caro JJ, Lee KM, Minchin M, et al. Budget impact analysis—principles of good practice: report of the ISPOR 2012 budget impact analysis good practice II task force. Value Health. 2014;17(1):5–14. doi:10.1016/j.jval.2013.08.2291.
United Nations Department of Economic and Social Affairs. World population ageing: 1950–2050.
New York: United Nations; 2001. http://www.un.org/esa/population/publications/worldage- ing19502050/. Accessed 4 Apr 2016.
WellPoint. Health technology assessment guidelines: drug submission guidelines for new prod- ucts, new indications, and new formulations. 2008. http://www.pharmamedtechbi.com/~/
media/Images/Publications/Archive/The%20Pink%20Sheet/70/043/00700430001/wellpoint_
formulary_guidelines.pdf. Accessed 4 Apr 2016.
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© Springer International Publishing AG 2017
J. Mauskopf et al., Budget-Impact Analysis of Health Care Interventions, DOI 10.1007/978-3-319-50482-7_2
Determining the Analytic Framework
Sorrel Wolowacz, Josephine Mauskopf, and Stephanie Earnshaw
Abstract Before the inputs needed for a budget-impact analysis for a new drug can be determined and their values derived and before the computer model can be designed to perform the analysis, an analytic framework must be established. The analytic framework provides the overall approach to the analysis, and its compo- nents are described in this chapter. This framework might vary from jurisdiction to jurisdiction and from budget holder to budget holder within the same jurisdic- tion. Design of the analytic framework requires an understanding of jurisdiction requirements for a budget-impact analysis. Also required is an understanding of the health system and the relationship between the characteristics of the health system and how the new drug will affect the budget for a specific health plan or region. The introduction of a new drug can affect the budget in multiple ways. The most important components to understand for a jurisdiction when constructing a budget-impact analysis are the eligible population, the potential use of the drug in the treatment pathway, and the budget holder cost perspective and time horizon.
Once these are understood, model specifications can be prepared to guide the analysis.
Keywords Budget-impact analysis • Analytic framework • Eligible population
• Time horizon • Treatment pathway • Cost perspective • Model specifications
S. Wolowacz (*) • J. Mauskopf • S. Earnshaw
RTI Health Solutions, RTI International, Manchester, UK e-mail: swolowacz@rti.org
12
The goal of a budget-impact analysis for a new drug1 is to assess the impact that introducing the new drug into the treatment mix for patients who are eligible for the new drug will have on the annual budget for a health plan or region. The first step in developing the budget-impact analysis is to establish an analytic framework that defines the overall approach to the analysis. The design of the analytic framework should be consistent with jurisdiction-specific guidelines or requirements for a bud- get-impact analysis if they are available. The design of the framework might vary from jurisdiction to jurisdiction and from budget holder to budget holder within the same jurisdiction.
The analytic framework requires an understanding of the health system and the relationship between the characteristics of the health system and how the new drug will affect the budget for a specific health plan or region. The introduction of a new drug can affect the budget in multiple ways. The following components are important to understand for a jurisdiction when constructing a budget-impact analysis:
• Eligible population within the jurisdiction
• Budget holder time horizon
• Potential use of the new drug within the treatment mix
• Budget holder cost perspective
Once these are understood, a flow diagram and model specifications can be pre- pared to guide the analysis. Each of these components is described in the following sections.
1 In this chapter, we will make the simplifying assumption that the analytic framework is being designed to evaluate the introduction of a new drug for one jurisdiction and one type of budget holder within that jurisdiction. In practice, it may be more efficient to choose an analytic frame- work that can be readily adapted for use in multiple jurisdictions and for several types of budget holders or that can be used to evaluate other types of health-care interventions. Building flexibility for use in multiple jurisdictions or by different budget holders into the analysis will be discussed further in Chap. 7. Changes in the analytic framework needed for budget- impact analyses for other health-care interventions are described in Chap. 13.
Chapter Goal
To identify and discuss the analytic framework that will determine the com- ponents of a budget-impact analysis for a new drug for the jurisdiction(s) of interest. The components of a budget-impact analysis include the eligible population size and relevant descriptors, time horizon, treatment mix, cost perspective, and results presentation. They will be used in a set of specifica- tions for the analyses and may be used to formulate a detailed flow diagram to guide the budget-impact analysis.
S. Wolowacz et al.