The role of value for money in public insurance coverage decisions for drugs in Australia: a retrospective analysis 1994-2004.
OBJECTIVE
To analyze the relative influence of factors in decisions for public insurance coverage of new drugs in Australia.


METHODS
Evidence presented at meetings of the Australian Pharmaceutical Benefits Advisory Committee (PBAC) that makes recommendations on coverage of drugs under Pharmaceutical Benefits Scheme.


METHODS
All major submissions to the PBAC between February 1994 and December 2004 (n = 858) if one of the outcomes measured was life year gained (n=138) or quality-adjusted life years (QALYs) gained (n=116).


RESULTS
Clinical significance, cost-effectiveness, cost to government, and severity of disease were significant influences on decisions. Compared to the average submission, clinical significance increased the probability of recommending coverage by 0.21 (95% confidence interval [CI] 0.02 to 0.40), whereas a drug in a life-threatening condition had an increased probability of being recommended for coverage of 0.38 (0.06 to 0.69). An increase in $A10,000 from a mean incremental cost per QALY of $A46,400 reduced the probability of listing by 0.06 (95% CI 0.04 to 0.1).


CONCLUSIONS
The PBAC provides an example of the long-term stability and coherence of evidence-based coverage and pricing decisions for drugs that weighs up the evidence on clinical effectiveness, clinical need, and value for money. There is no evidence of a fixed public threshold value of life years or QALYs, but willingness to pay is clearly related to the characteristics of the clinical condition, perceived confidence in the evidence of effectiveness and its relevance, as well as total cost to government.
Harris
Anthony H
AH
Monash University, Victoria, Australia. anthony.harris@buseco.monash.edu.au
Hill
Suzanne R
SR
Chin
Geoffrey
G
Li
Jing Jing
JJ
Walkom
Emily
E
D001315:Australia; D003657:Decision Making; D019458:Insurance Coverage / Q000191:economics*; D007356:Insurance, Pharmaceutical Services; D015233:Models, Statistical; D009313:National Health Programs; D004364:Pharmaceutical Preparations / Q000191:economics*; D019057:Quality-Adjusted Life Years; D012189:Retrospective Studies
D004364:Pharmaceutical Preparations