Report 1

Executive Summary

The U.S. healthcare system has always been focused on curative treatment. Costeffective analysis gives a strong argument for moving towards a more preventive approach. There are, however, some issues in cost-effective analysis such as discounting and discrepancies in some of the analyses’ assumptions, but ultimately the evidence appears sound. Unfortunately, healthcare policy is difficult to change, policy makers have their own agenda of what they feel are important programs, many argue the validity of the analyses themselves, physicians are not ready to give up on life-saving techniques, and people often look at total system costs rather than future benefits. Ultimately, policy makers need to implement more preventive tactics so they are able to improve healthcare delivery and control rising costs.

Benjamin Franklin once said, “An ounce of prevention is worth a pound of cure.” When he spoke those words he was speaking of not only of prevention’s medical benefits, but of its application in all facets of life. Medically speaking, all can agree that the prevention of a disease is a much more desirable outcome than the treatment of one. Prevention of coronary heart disease is a major focus of today’s healthcare system. 3hydroxy-3-methylglutaryl-coenzyme A reductase inhibitors (statins) are established as first-line cholesterol-lowering drugs and are the pharmacologic treatment of choice because of their effectiveness and safety. Currently the U.S. spends approximately 14% of its gross domestic product (GDP) on healthcare, over $1.5 trillion dollars. This number balloons to over $2.2 trillion if you include direct costs as well as indirect costs from lost productivity due to illness or death. Cardiovascular disease is the single largest killer of men and women in the world, and the cost of heart disease and stroke for the year 2003 was approximately $351 billion: $209 billion for health care expenditures and $142 billion for lost productivity. Statins have proven to be very effective in lowering levels of low density lipoprotein cholesterol (LDL-C). Treatment of patients at risk for coronary heart disease (CHD) with statins can significantly reduce the number of deaths associated with the disease and ultimately reduce healthcare expenditures. Pharmacoeconomic Evaluation In considering different types of medical treatments or interventions, a basis of comparison has to be established. Healthcare dollars are limited and need to be allocated to those areas that can do the most good. As a result, we turn to pharmacoeconomic modeling to search for the most efficient and effective way to allocate healthcare

resources. There are four possible outcomes when making an economic evaluation. In this case the costs verses the quality of the medical intervention (the better the outcome) is being evaluated. Figure 1 shows a decision box illustrating these outcomes. Figure I. Decision Box

Outcomes that fall in the high quality/high cost and low quality/low cost regions need to be further analyzed to determine if they are reasonable courses of action. To make a decision, a selection criteria needs to first be created and then all of the courses of treatment need to undergo pharmacoeconomic evaluation. This type of evaluation is used because it assigns values to the outcomes allowing for quantitative comparisons. These values differ depending on the type of analysis performed. Table I lists the three most prevalent pharmacoeconomic evaluations used by health economists. Table I. Types of phamacoeconomic evaluations3

Cost benefit analysis (CBA) measures all costs and benefits of competing therapies in terms of monetary units. Cost-effectiveness analysis (CEA) measures the costs of all competing therapies, but it measures the consequences in terms of natural units, such as lives saved. In this case, the cost of therapy is divided by its effectiveness, hence the more effective the treatment the lower the value. This value is useful because it provides a way to compare alternative therapies that may not have the same efficacy, but are now in the same terms, such as years of life saved. Cost-utility analysis (CUA) is similar to CEA, except that it compares quality adjusted life years (QALYs). This adjusts the measure by weighting it with a utility value that takes into account the quality of the years, (i.e. the years that are pain-free, or in an acceptable mental state). All of the analyses can be used to determine the most cost-effective course of treatment depending on what criteria is initially established. Cost Benefit Analysis The cost-effectiveness of a treatment is dependent on the underlying risk for the patient, the efficacy of the drug, and the cost of the drug. In the case of statin treatment an incremental cost effective ratio is useful to compare the costs among treatments with different statins. This CBA takes into account the varying costs and effectiveness of each of the statins. The cost-effectiveness ratio is defined at the difference in the cost of the two treatments (statin and usual care) divided by the difference in their effectiveness5: Cost/Effectivness =

Cost ( statin )

−

Cost (usual care)

Effectiveness ( statin )

−

Effectiveness (usual care)

A drug’s efficacy is its ability to produced the desired effect drug. A drug is effective if it can achieve the desired effect. The effectiveness of the statins increases with dosage, but the efficacy is an inherent property of the statin. Therefore, to increase

the drug effectiveness the dosage of a given statin can be increased or an alternate statin with a higher efficacy can be administered at the same dose. Table II lists the prices and effectiveness, expressed as percent reduction in LDL-C. Table II. Statin Dosages by Effectiveness (Percent Reduction in LDL-C) and Price4*

The table indicates that the cost-effective ratio decreases (becomes more costeffective) as the dosage increase among each drug. This is because the increase in the level of effectiveness, or percent reduction in LDL-C, is greater than the increase price among escalating dosage levels. Using the data from Table II and expressing the cost as annual statin cost, Figure II illustrates the data as a scatter plot. The curve approximates the “efficient frontier.” This is the lowest annual drug cost that any given level of effectiveness. Here, the drug acquisition costs are the only costs being considered and the effectiveness is expressed as percent reduction in LDL-C. This, however, does not take into account what percent reduction in LDL-C is actually needed. As stated earlier, the cost-effectiveness of a treatment is also dependent on the underlying risk for the patient. Risk factors include, by are not limited to cigarette smoking, hypertension, age, family history of CHD, diabetes, obesity, or other forms of atherosclerotic disease.

Figure II. Annual Statin Cost by Percent Reduction in LDL-C4 The annual drug costs are approximated using the data from Table II. The statin dosages that lie on the line are labeled as the first letter of the statin name followed by the dosage level.

The number of risk factors plays a role in the necessity of a patient to reach their treatment goals, and this initially determines which statin to use. A treatment is only cost-effective if it works. For example, for patients in the lowest CHD risk groups, lowefficacy statins such as prevastatin may still bring a patient to their treatment goal. In low risk groups the efficacy becomes less important and price becomes the more important determinant of cost-effectiveness. In higher risk groups the efficacy of the drug is the larger determinant, since the LDL-C targets are lower for patients that have more risk factors. As demonstrated, cost benefit analysis is useful to determine which statin treatment is the most cost-effective depending on the situation, but is doesn’t reveal if statin treatment is cost effective from a societal standpoint. Cost Effectiveness/Utility Analysis The most widely accepted measure has currently been the QALY. In the US, it is generally accepted that $50,000/QALY is cost-effective. For countries that spend less on

healthcare this value is lower. It should be noted that use of this cost-effectiveness analysis is generally from a societal perspective. It is used to measure the costs and benefits of treatments so that healthcare policy makers can make comparisons. It is not calculating the value to prolong an individual’s life, but more calculating the economic impact that each intervention would have on society if implemented. Many studies have been conducted comparing the cost-effectiveness of various drug treatments for lipid lowering. The following data that is discussed listed in Tables III-IV on pages 8-9. For lipid-lowering treatments by statins, the values obtained covered a large range. Statin treatment can be a very expensive means of primary treatment in low-risk populations, with values reaching $775,000/QALY (Table III). This value is so high because the level of effectiveness is low in a less risky patient population. If the patient is at a greater risk for CHD, then the drug is more effective at reducing mortality. Cost-effective analysis takes into account absolute differences between treatments rather that relative ones. For example, a 20% reduction in mortality may save one life per thousand in very low risk population and five lives per hundred in high-risk populations.1 Therefore, in the high-risk population the effectiveness of the drug is much greater and because the in CEA/CUA the cost of therapy is divided by the effectiveness this becomes much more cost-effective as a secondary treatment in patients with multiple risk factors. In fact, most of the data in Table IV indicates that using statins as a secondary treatment saves lives at a cost below the $50,000/QALY threshold.

Table III. Lipid Lowering Primary Prevention Cost-Effectiveness Studies1

Table IV. Lipid Lowering Secondary Prevention Cost-Effectiveness Studies1

The relationship between the risk factors and the cost effectiveness can be more easily illustrated in Table V. Table V. The Effect on the Cost per Life-Years Saved of Statin Treatment as Risk Factors Increase.4

The data in this table shows the inverse relationship of patient risk to cost-effectiveness. Issues facing Cost-Effective Analysis Although it seems that there is a large amount of economic support stating treatment for lipid-lowering, there are some issues in cost-effective analyses. First, is the discounting of future benefits. In most of the evaluations, the costs are not discounted to take into account the time value of money. For example, an intervention that costs $25,000 to put in place now is less than a $50,000 investment 20 years from now, but it may not be as cost-effective depending on the discount rate. The overall net present value (NPV) may be lower. Another issue is how to decide what value to use for the level of effectiveness or utility. These values are extrapolated numbers, and may not be accurate if the data supporting them is weak.

Second, is many of the most cost-effective treatments are for people with multiple risk factors, meaning they are at risk for multiple diseases. If an intervention stops someone from sudden death by cardiovascular disease, but keeps them alive to die of cancer without any gain in quality years, then that intervention is not economically attractive even though is cost-effective in stopping sudden death. Third, is the current analyses are from a “societal” perspective, but yet there is no single “societal” decision maker. The cost-effectiveness of the interventions may differ dramatically depending on a group’s perspective. For example, one would assume that managed care companies would support much of these analyses and push policy makers to put most of these strategies in place. However, a single managed care company’s perspective takes into account that an individual patient is likely to keep health insurance with that company for only a couple of years. Therefore, paying for interventions that may not show any benefits for decades has no value to them. Fourth, is that although a treatment is cost-effective many people still look at the total system cost. The National Cholesterol Education Program published a report outlining revised guidelines for cholesterol control. In it, the panel recommends that 36 million Americans should be taking a lipid-lowering agent. This recommendation would cost society more that $500 billion over the next 20 years.1 This would certainly decrease the amount of cardiovascular disease, and the number of deaths associated with it, and at a value of lower than the $50,000/QALY threshold, but it would come at the expense of other medical investments.

Conclusion The results suggest that statin therapy is a cost-effective treatment to reduce major coronary events and total mortality in patients with high risk. It is also important to note that usually in the studies, the price associated with the drugs is the average wholesale price (AWP), and so an increase in the number of generics in the market will make statin treatment even more cost-effective in the future. If the issues that limit the number of treatment programs that include statin therapy can be overcome, than not only will future healthcare costs be reduced, but millions of lives will be saved.

REFERENCES 1. Krumholtz HM, Wientraub WS, Bradford WD, Heidenreich PA, Mark DB, Paltiel AD. Task Force #2-The Cost of Prevention: Can We Afford It? Can We Afford Not To Do It? JACC Vol. 40, No. 4, 2002:579-651. 2. Eyre H et al. Preventing Cancer, Cardiovascular Disease, and Diabetes. A Common Agenda for the American Cancer Society, the American Diabetes Association, and the American Heart Association. Circulation 2004:109:3244-3255. 3. Peterson AM and McGhan WF. Pharmacoeconomic Impact of Non-Compliance with Statins. Pharmacoeconimics 2005; 23 (1) 13-25. 4. Szucs TD, Belisari A, Mantovani LG. Is Preventive Medical Care Worth the Cost? Biologicals 1997;25:247-252. 5. Branning G. Heathcare Systems and Pharmaceutical Companies. Fall 2005. 6. Tosteson AN, Weinstein MC, Unink MG et al. Cost-effectiveness of populationwide educational approaches to reduce serum cholesterol levels. Circulation 1997;95:24-30.