We need to be sensitive to cost, particularly as it relates to new drug development and how these costs factor into patient choices. —Erica R. Thaler, MD
Explore This IssueJune 2019
Michael G. Stewart, MD, MPH, professor and chairman in the department of otolaryngology–head and neck surgery at Weill Medical College of Cornell University and otolaryngologist-in-chief at New York-Presbyterian Hospital/Weill Cornell Medical Center, addressed the issue of cost effectiveness (CE) assessment of biologics, which he said can be fairly complex.
“The concept of CE is cost divided by effectiveness,” he explained. “For example, if you start with something that costs $10,000 and it gives you 0.4 units of improvement in some outcome measure, that is $25,000 per unit of improvement. And if you have a $9,000 treatment that gives you 0.3 units, that would be $30,000 per unit of improvement, and that treatment is less costly but is also less cost effective.
He said it is important to remember that the cost is not just what is charged to the patient or their insurance; it is desirable to use cost rather than charges, but it also can be challenging to establish what the actual costs are. He added, “It can be equally difficult to assess exactly what is the effectiveness—is it an improved CT score, fewer admissions for asthma, a better quality of life, etc.?”
When measuring effectiveness, it is also important to assess duration of effect, said Dr. Stewart. Researchers typically used quality-adjusted life years (QALYs) to measure the value of health outcomes, and this is assessed by multiplying the utility of an outcome state with its duration in years. In the U.S., it is generally accepted that a level of acceptable cost effectiveness is approximately $50,000/QALY or less. “For example,” he added, “with cochlear implantation, cost effectiveness was calculated as $12,000 to $15,000/QALY. So, although it is an expensive one-time intervention, it is cost effective over the long term. Compare that to joint replacement ($20,000/QALY) and a coronary artery bypass graft in a 70-year old ($90,000/QALY).”
“Examining a 2019 Annals of Asthma, Allergy and Immunology study from Anderson and Stanley, we see that the calculated cost effectiveness of biologics for asthma is $325,000–$391,000/QALY (Ann Allergy Asthma Immunol. 2019;122:367–372); so, the drugs are not only expensive, they are not very cost effective when compared to other treatments. In addition, the incremental (or additional) cost effectiveness ratio of biologics versus long-term steroids in asthma is $174,000/QALY. The authors calculated that a 67% to 80% discount in drug price would be needed to reach an acceptable comparative level of cost effectiveness,” Dr. Stewart added.
Erica R. Thaler, MD, is professor and vice chair of otolaryngology–head and neck surgery at the University of Pennsylvania in Philadephia. Painting a clear picture of reality, Dr. Thaler said, “I am going to attempt to put some context around the issue of cost analysis so that you can understand what you’re suggesting to patients. We need to be sensitive to cost, particularly as it relates to new drug development and how these costs factor into patient choices. I will say that at least now we have more alternatives. When I graduated from residency in 1995, we were telling patients that their only options were surgery or Prednisone. And now, here we are 25 years later, and we are just beginning to have viable alternatives.”
The cost of bilateral endoscopic sinus surgery varies greatly by code, and the charges also differ by institution, with the institutional charges not including anesthesia or hospital fees, she said. “I think it is fair to say that you can double surgeons’ fees numbers if you think about this in an all-inclusive manner,” she added.
Regarding traditional medical therapy, Dr. Thaler noted that Prednisone is the “workhorse” when it comes to NP, largely because it is inexpensive. “Even topical steroids such as fluticasone aren’t overly economically burdensome. Lavage is relatively expensive, with a [prescription of] .25/mg/2ml daily costing $281/month. Montelukast is pricey, with 10 mg costing $248.22. Compared to biologics, however, these are all relatively inexpensive,” she said.
Putting your patients on a biologic will cost approximately $40,000 per year; insurance will cover some of this expense, but this will vary according to payer, she added. “The bottom line is that there is no set algorithm for patients with chronic sinusitis and nasal polyposis. The physician and patient, in partnership, need to figure out what is best for overall patient outcome. Cost-benefit should be first and foremost related to the medical care of the patient.”