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Hartwell D, Jones J, Baxter L, et al. Peginterferon Alfa and Ribavirin for Chronic Hepatitis C in Patients Eligible for Shortened Treatment, Re-Treatment or in HCV/HIV Co-Infection: A Systematic Review and Economic Evaluation. Southampton (UK): NIHR Journals Library; 2011 Apr. (Health Technology Assessment, No. 15.17.)

Appendix 8Net benefit framework

Cost-effectiveness decision rules and the incremental cost-effectiveness ratio

Standard decision rules for considering the cost-effectiveness of an intervention (I), compared with a given comparator (C), focus on the difference in effect (ΔE = EIEC also referred to as the incremental effect) and the difference in cost (ΔC = CICC also referred to as the incremental cost). The decision rules are outlined using the cost-effectiveness plane as shown in Figure 24, below.

FIGURE 24. Cost-effectiveness plane for intervention (I) compared with comparator (C).

FIGURE 24

Cost-effectiveness plane for intervention (I) compared with comparator (C).

If the incremental cost is negative and the incremental effect is positive (SE quadrant), the intervention is unequivocally cost-effective (it is dominant, achieving better outcomes at lower cost).

If the incremental cost is positive and the incremental effect is negative (NW quadrant), the intervention is unequivocally not cost-effective (it is dominated, achieving poorer outcomes at higher cost).

If both the incremental cost and the incremental effect are negative (SW quadrant) or both the incremental cost and the incremental effect are positive (NE quadrant) no such unequivocal statements can be made. Determining whether the intervention is cost-effective depends on a threshold value (λ), defined as the maximum amount society is willing to pay for an incremental health gain or, equivalently, as the minimum amount society is willing to accept for foregoing an incremental health gain. The intervention would be regarded as cost-effective if its incremental cost-effectiveness ratio is lower than the threshold (ΔCE < λ) for ICERs in the NE quadrant or higher than the threshold (ΔCE > λ) for ICERs in the SW quadrant.

Cost-effectiveness decision rules and incremental net benefit

The inequalities (ΔCE < λ for ICERs in the NE quadrant and ΔCE > λ for ICERs in the SW quadrant) can be re-arranged to give equivalent inequalities on the cost scale (incremental net monetary benefit) or on the effect scale (incremental net health benefit) (see Briggs and colleagues 2006):

incremental net monetary benefit: λ×ΔEΔC>0

incremental net health benefit: ΔEΔCλ>0

One of the drawbacks of the incremental cost-effectiveness ratio is that the location of negative ICERs [whether they are in the SE (dominant) or NW (dominated) quadrant] cannot be determined without reference to other contextual information (the incremental cost and incremental effectiveness underlying the ratio or the quadrant of the cost-effectiveness plane). Similarly, positive ICERs cannot be interpreted (given that the decision rules depend on whether the ICER lies in the NE or the SW quadrant) without such additional information. In contrast, the incremental net benefit (regardless of the scale) provides an unambiguous decision rule, although this implies knowledge of the threshold value (λ), which has been a subject of considerable debate in the context of NICE decision making (see Appleby and colleagues 2007, McCabe and colleagues 2008, Raftery 2009 and Towse 2009). Current NICE methodological guidance suggests presenting expected net monetary health benefits using values of £20,000 and £30,000 per QALY for λ.

Example This report presents cost-effectiveness results for shortened treatment duration using peginterferon alfa-2a combination therapy in genotype 1 patients (see Table 44), peginterferon alfa-2a combination therapy in genotype 2 or 3 patients (see Table 45) and peginterferon alfa-2b combination therapy in genotype 1 patients (see Table 50). The table below presents these results along with the incremental net benefits.

For genotype 1 patients treated with peginterferon alfa-2a, the ICER is positive and ranges from approximately £35,000 to £65,000 per QALY gained. Without reference to the incremental cost and incremental QALY estimates we cannot determine which quadrant (NE or SW) the ICER is located in – therefore we do not know which cost-effectiveness decision rule to apply. However, the incremental net monetary benefits (or equivalently the incremental net health benefits) are positive at both suggested threshold values, suggesting that reduced duration of treatment is a cost-effective option for genotype 1 patients treated with peginterferon alfa-2a.

For genotype 1 patients treated with peginterferon alfa-2b and genotype 2 or 3 patients treated with peginterferon alfa-2a the ICER is negative. Again, without reference to the incremental cost and incremental QALY estimates we cannot determine which quadrant (NW or SE) the ICER is located in – therefore we do not know whether shortened treatment duration dominates or is dominated by standard duration. The incremental net benefits are positive at both suggested threshold values, suggesting that reduced duration of treatment is a cost-effective option in these patient groups.

Shortened treatment duration with peginterferon in different patient groups

The table below provides details of the incremental cost and outcome, ICERs and incremental net monetary (health) benefits for shortened treatment duration with peginterferon in different patient groups.

Treatment: patient groupRCTIncrementalICER (£ per QALY gained)Incremental net benefit
MonetaryHealth
Cost (£)Outcome (QALYs)λ = 20,000λ = 30,000λ = 20,000λ = 30,000
PEG α-2a: genotype 1Liu and colleagues53−4807−0.1434,51020076070.100.02
Yu and colleagues 200854−5212−0.0864,880452647220.180.09
PEG α-2b: genotype 1Berg and colleagues59−89960.49−18,35918,79623,6960.940.79
PEG α-2a: genotype 2 or 3Yu and colleagues55−21070.08−26,338370745070.190.15
von Wagner and colleagues 200854−31460.23−13,678428841760.390.33

PEG α, peginterferon alfa.

References

  • Appleby J, Devlin N, Parkin D. NICE's cost-effectiveness threshold. How high should it be? BMJ. 2007;335:358–9. [PMC free article: PMC1952475] [PubMed: 17717337]
  • Briggs A, Claxton K, Sculpher M. Decision modelling for health economic evaluation. Oxford: Oxford University Press; 2006. Handbooks in Health Economic Evaluation.
  • McCabe C, Claxton K, Culyer AJ. The NICE cost-effectiveness threshold: what it is and what that means. Pharmacoeconomics. 2008;26:733–44. [PubMed: 18767894]
  • Raftery J. Should NICE's threshold range for cost per QALY be raised? No. BMJ. 2009;338:b185. [PubMed: 19171562]
  • Towse A. Should NICE's threshold range for cost per QALY be raised? Yes. BMJ. 2009;338:b181. [PubMed: 19171561]
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Cover of Peginterferon Alfa and Ribavirin for Chronic Hepatitis C in Patients Eligible for Shortened Treatment, Re-Treatment or in HCV/HIV Co-Infection: A Systematic Review and Economic Evaluation
Peginterferon Alfa and Ribavirin for Chronic Hepatitis C in Patients Eligible for Shortened Treatment, Re-Treatment or in HCV/HIV Co-Infection: A Systematic Review and Economic Evaluation.
Health Technology Assessment, No. 15.17.
Hartwell D, Jones J, Baxter L, et al.
Southampton (UK): NIHR Journals Library; 2011 Apr.

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