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Cost-effectiveness analysis: what is it and why is it important for clinical practice?

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Prof. dr. Andrea Manca

29 June 2017

One of the main objectives of MDS-RIGHT is to generate evidence identifying the most cost-effective treatment strategies for patients with lower-risk MDS in healthcare systems throughout the participating countries.

This type of evidence is becoming increasingly influential in shaping clinical practice.

Many countries nowadays require robust evidence demonstrating new treatments provide ‘value for money’ before they are made available for use. In this blog, we describe the role that cost-effectiveness evidence plays in healthcare policy, as well as the implications that it may have for patients.

The Fundamental Economic Problem

Policy-makers in charge of healthcare budgets have to contend with a fundamental economic problem, that is deciding how to allocate limited resources when there are many competing demands for their usage. This problem is often compounded in many European healthcare systems due to the effects of ageing populations and pressures to introduce innovative (expensive) medical technologies. Although some of these additional demands can be absorbed through increases in healthcare budgets, e.g. by raising taxes or insurance premiums, this will not always be a sustainable solution. For healthcare systems operating with a fixed budget, any decision to adopt innovative health technologies, costing more than current standard care, implies that savings will need to be made by displacing services elsewhere. Cost-effectiveness analysis (CEA) seeks to inform this type of decisions by weighing up whether the health improvements for patients generated by the innovative technologies are expected to outweigh the losses in health occurring from the displacement of services elsewhere. We call this ‘value for money’.

The Cost-Effectiveness Framework

Cost-effectiveness research has predominantly revolved around the identification of healthcare interventions expected to deliver maximum improvements in patients’ health for a given budget. To pursue this objective, the health economics research community has developed the Quality-Adjusted Life Year (QALY) – a composite health outcome measure combining both survival and quality of life effects in one numeraire – to quantify changes in patient health. The main strength of the QALY lies in its ability to facilitate comparison of health benefits across a broad spectrum of disease areas, which consequently enables policy-makers to assess which interventions deliver ‘value for money’.

Existing Studies for MDS treatments

To date, there have been a number of cost-effectiveness studies comparing interventions for the treatment of MDS. Most of the published studies compared treatment strategies for patients with intermediate-2 and high-risk MDS (also known as higher-risk MDS).  There are few cost-effectiveness studies to date that have assessed treatments for patients with low- or intermediate-1-risk (lower-risk) MDS . One such study was conducted in 2013 and compared Lenalidomide against standard care in patients with a deletion-5q genetic abnormality  in the National Health System (NHS) for England and Wales.  The findings of this study were used by the National Institute for Health and Care Excellence (NICE) – a policy-making body in the UK responsible for issuing guidance to improve health and social care – to decide whether or not Lenalidomide should be used in the NHS.   Ultimately, the NICE appraisal committee used this evidence to recommend that Lenalidomide should be made available for the treatment of transfusion-dependent patients, in whom all other therapeutic options are either insufficient or inadequate.  A number of other examples in Europe exist where local healthcare policy makers used cost-effectiveness evidence to decide whether, and for whom, to provide treatment.  


The quality of the value assessment provided by novel healthcare interventions depends critically on the quality of the available clinical and economic real world evidence.

Researchers in the MDS-RIGHT project will investigate the cost-effectiveness of healthcare interventions for the treatment of patients with lower-risk MDS using the EUMDS registry.

It is anticipated that a number of subgroup analyses could be performed given that these patients are known to vary in terms of their disease classification and other health issues. Although this project is concerned with healthcare practice in MDS patients among participating countries, the researchers intend to generate country-specific evidence where feasible. This will be important to account for differences between countries, e.g. differences in clinical practice patterns (dictated by resources and/or licensing constraints) and relative prices across countries.

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