Points of View The Cost-Effectiveness Evaluation System in Japan: Past and Future -Implications from a Comparison of Japan and the U.K.

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Yuki Miura, Senior Researcher, Pharmaceutical and Industrial Policy Research Institute

1. Introduction

The multifaceted value of pharmaceuticals has been manifested in various ways, including the emergence of new modalities (hereafter referred to as "new modalities"). In addition, with the spread of COVID-19 infection, people have begun to discuss health and economics as issues closer to home for the public. Focusing on pharmaceuticals, including vaccines, there is growing interest in the impact of productivity losses associated with the spread of COVID-19 infection. In recent years, in the framework of Japan's cost-effectiveness evaluation system, the evaluation of the value of pharmaceuticals has come to take into account not only efficacy, safety, and treatment cost, but also the impact on work and the degree of reduced burden on family members and medical personnel, etc. It is therefore extremely important to visualize the degree of impact of these multifaceted factors of pharmaceuticals and to gain public acceptance for the It is extremely important to visualize the impact of these multifaceted factors and to gain the public's understanding. However, there are still some problems in visualizing these effects, such as the availability of data collection and the development of indices tailored to the Japanese population.

This paper describes how the cost-effectiveness evaluation system was studied and evaluated in the Health Technology Assessment (HTA) in Japan, and how elements that cannot be captured by the analytical framework and incremental cost-effectiveness ratio (ICER) have been studied and evaluated. The study will examine how factors that cannot be captured by the analytical framework and ICER (incremental cost-effectiveness ratio) have been considered and evaluated. Comparisons will also be made with the National Institute for Health and Care Excellence (NICE) in the U.K., which evaluates medical technologies using the same analytical methods as those used in Japan and has accumulated many case studies. We would like to consider whether the current cost-effectiveness assessment is sufficient or whether the process necessary to correctly assess the various values of pharmaceuticals, in particular, needs to be expanded.

Cost-effectiveness evaluation system in Japan

In Japan, the cost-effectiveness evaluation system became operational in April 2019. Until the system was put into operation, the Central Social Insurance Medical Council (hereafter referred to as "Chuikyo") reviewed the results of the study, the implementation of the system, the results of the study by experts, and opinions from related industries, etc., and the Special Committee on Cost-Effectiveness Evaluation and the Joint Committee discussed the issues and proposed ^responses1). Subsequently, the Cost-Effectiveness Evaluation Subcommittee of the Central Council of Medical Examiners held ongoing discussions, and the current cost-effectiveness evaluation system is now in operation.

Japan's cost-effectiveness evaluation system is unique compared to those in other countries in that it aims to select eligible items once they are covered by insurance and to adjust prices based on the evaluation results. As a result, it is possible to provide medical services under the insurance coverage quickly without impeding the access of patients in need of treatment (hereinafter referred to as "patient access"). Since the purpose of HTA is price adjustment, its analytical method is calculated based on ICER, and the price adjustment is based on whether or not it is cost-effective when compared to the control technology.

The nature of HTA in other countries varies, and as shown in Table 1, there are cases where HTA is used to determine reimbursement and other cases where HTA is used for price adjustment.

Taking NICE in the U.K. as an example, QALY (quality-adjusted life year) is used as the basis of ^analysis3) and ICER is calculated. If the calculated ICER is below a defined cost-effectiveness threshold (20,000 to 30,000 pounds per QALY, with some mitigation measures), the ICER is judged to be cost-effective. The results of this analysis are used to determine reimbursement, and for the period from March 2020 to December 2021, 52% (510/980 cases) of all cases were recommended, excluding anticancer agents, while 14% (139/980 cases) were not recommended under the same conditions4. ⁴⁾. In the U.K., cost-effectiveness results are not the only factor used to make decisions, but various aspects are considered to avoid impeding patient access, such as mitigating thresholds due to prolonged life at the end of life, remedies for analysis with uncertainty, etc., and opinions from stakeholders (clinical experts, patient experts, etc.), unmet needs, etc. are taken into account. In the process of comprehensive evaluation, factors that cannot be incorporated into ICER, such as opinions from stakeholders (e.g., clinical experts and patient experts) and the magnitude of unmet needs, may also be taken into account ^.5) In Japan, there are many cases of comprehensive evaluation.

The process of comprehensive evaluation has been studied extensively in Japan, and is described in the next section.

(3) History of the consideration of the comprehensive evaluation (appraisals) in the Japanese cost-effectiveness evaluation system (4) History of the evaluation of the completed Japanese cost-effectiveness evaluation system

When it was introduced on a trial basis, the comprehensive evaluation mainly considered "whether analysis by the distributor or public analysis is more appropriate from a scientific standpoint" and "whether the subject product is an anticancer drug or other product that should be relaxed under the criteria. In this respect, the evaluation was not literally "comprehensive" like NICE, etc., and the scope of the evaluation was quite ^limited6).

In the evaluation of the trial introduction, Table 2 was proposed as the ethical and social consideration factors and requirements for applicable items in the comprehensive evaluation.

At the 48th meeting of the Special Committee on Cost-Effectiveness Evaluation of the Central Medical Council, six items were proposed as ethical and social factors to be considered, and later, two items, innovation and treatment for pediatric diseases, were deleted.

The reasons for the deletion of the items rearranged from the initial proposal are as follows. Innovation was removed from the items based on the fact that it was already taken into consideration at the drug price calculation ^stage8).

The item for treatment of pediatric diseases was established with the background of not depriving treatment opportunities for pediatric patients, who are not numerous, and in fact, in a simulation using a hypothetical case at the Chuikyo Expert Committee on Cost-Effectiveness Evaluation, it was determined that "ICER is 7.5 million yen/QALY, which is not cost-effective. However, the final evaluation stated that "the cost-effectiveness evaluation is acceptable," taking into consideration the fact that "Drug A is a treatment for pediatric-specific disease X, for which the prognosis is poor. This would be the overall evaluation from an ethical and social perspective in a typical comprehensive evaluation. However, since pediatric diseases were excluded from the cost-effectiveness evaluation, the discussion converged on the direction that they did not need to be added to the items in the appraisals, and they were ^removed9).

Table 3 shows the results of the evaluation of 13 items (7 pharmaceuticals and 6 medical devices) that were subject to the trial introduction, and whether or not they were subject to ethical and social ^{considerations10)}.

Table 3 shows the evaluation results for the seven pharmaceutical products that were subject to trial introduction. Of the seven products, five of them were applicable to the ethical and social considerations, five were useful from a public health perspective (e.g., to combat infectious diseases), and two were applicable to treatments for serious diseases that do not significantly improve quality of life but prolong survival. The two drugs in the latter category were anticancer agents. Although this result does not apply to all drugs and selected items for cost-effectiveness evaluation due to the biased target diseases, it indicates that there are cases where cost-effectiveness evaluation becomes difficult with the results of ICER-based analysis and uniform judgment criteria. After the trial introduction, a measure was established to raise the ICER criteria from the basic category for those items for which consideration was deemed necessary in the comprehensive evaluation, such as anticancer drugs (Table 4). At the time of price adjustment, the price adjustment coefficients for usefulness addition, etc. and operating margin are weighted averaged by the percentage of patients in the analyzed population to which the price adjustment coefficients are applicable according to the ICER category.

The consideration of "additional costs not included in the analysis from the standpoint of public healthcare" in Table 2 was allowed for additional analysis within the "Analysis Guidelines for Cost-Effectiveness Evaluation in the Central Social Insurance Medical Council" (hereinafter referred to as "Analysis Guidelines"). In addition, the Guidelines also state that the position of the analysis must be clearly stated and the range of costs must be determined accordingly. The Guidelines are based on the "public medical care position," which is to be implemented within the scope of the public medical insurance system regarding costs, comparison and control techniques, target populations, and so on. The position of analysis and the range of costs are described in Table 5.

As mentioned above, since Japan is based on the public medical insurance system, the costs of medical technologies that are public medical costs and all related medical costs such as hospitalization costs, examination costs, and costs when an adverse event (AE) occurs are also included. NICE will conduct the basic analysis from the standpoint of public health care and nursing care, and will therefore conduct the analysis from the standpoint of public health care and nursing care in Japan. NICE will describe the history of studies on the treatment of public long-term care costs in Japan, since NICE will conduct its basic analysis from the standpoint of public health care and long-term care.

Treatment of public care costs

It was decided that studies on public long-term care costs, etc. would continue to be conducted by the research group with reference to efforts in other countries, and that future studies would be conducted based on the progress of such ^studies11). While the UK takes the position of public health and long-term care, the analytical guideline clearly states that in Japan, the position of public health care is the basis.

The second edition of the analytical guidelines, which was approved by the Chuikyo General Assembly in February 2019, states that public long-term care costs are not included in the basic analysis, but may be included in additional analyses based on estimates of public long-term care costs based on domestic findings. Although not used for price adjustment, it was positioned to be used as a reference for future mechanisms through publication of analysis results and accumulation of case ^studies12).

In the third edition of the Guidelines for Analysis approved by the Chuikyo General Assembly in January 2022, the sentence "Analysis from the standpoint of public medical care and nursing care" may be conducted if the impact on public nursing care costs is important for the technology to be ^evaluated13) remains unchanged, but an additional sentence was added, In the case of analysis from the "public medical and nursing care perspective," it was added that if actual data is available, the impact on the quality of life of family members and other caregivers and nurses may be taken into account.

In addition, with the recent enactment of the Act for Partial Revision of the Health Insurance Act, etc. for the Purpose of Appropriate and Efficient Management of the Medical Insurance System, the Receipt Information/Specified Health Examination Information Database (hereinafter referred to as "NDB") and the Long-Term Care Insurance Comprehensive Database (hereinafter referred to as "Long-Term Care DB") are to be consolidated for analysis and to be used for public benefit. In order to promote the use of the databases for public interest purposes, regulations were established for their provision to research ^{institutions14)}. It can be inferred that expectations will increase for its use in cost-effectiveness evaluations in the future.

Treatment of productivity loss

The handling of productivity losses was also discussed in the same process as that for public care costs. Until the second edition of the Guidelines, productivity losses resulting from the inability to work due to the disease were not included in the basic analysis. In the additional analysis, the position is that a broader range of costs should be considered (Table 5), and productivity losses estimated based on national findings may be included. While not used for price adjustment, the results of the analysis were to be made public and examples accumulated for reference in future mechanisms. The treatment of productivity losses differs in other countries as well. The United Kingdom evaluates medical technology without adding productivity loss to the analysis results. For example, in the analysis of the technology for Bylvay (target disease: progressive familial intrahepatic cholestasis), which was evaluated in the NICE Guidance on Technology Assessment for Rare Diseases, the company submitted costs including productivity losses, but after NICE pointed out that this was outside the standard method, the costs were recalculated without productivity losses, and the final results were not included in the analysis. However, after NICE pointed out that this was out of the standard method, the company recalculated the costs without the productivity loss, and the final evaluation was made.

Based on the history of consideration of these comprehensive evaluations, we investigated whether there were any cases in which a position other than public health care was taken in the cost-effectiveness evaluations conducted under the Analytical Guidelines Version 2, whether there were any differences in the range of costs included in the analysis based on the results of the evaluations between Japan and the UK, and whether there were any considerations for the comprehensive evaluation.

4. analysis of cost-effectiveness evaluation items that have been completed in Japan by comparison between Japan and the U.K. 5.

The item categories covered by this system and their trends over time are shown in Figure 1, which is based on a report published on the website of the Center for Health Economics and Evaluation Research (CORE2 HEALTH: C2H) ¹⁵⁾ of the National Institute of Health and Medical Sciences as of December 2022.

Since the introduction of the cost-effectiveness evaluation system, 4 items were selected for FY 2019, 8 items for FY 2020, 15 items for FY 2021, and 10 items for FY 2022 as of December 12 (Figure 1). The categories of these items are classified as H1 to H5, respectively. Please refer to Supplement 1 at the end of this document for a detailed classification of these categories. In the comparable drug method, items for which the additional utility allowance is calculated, and in the cost accounting method, items for which the additional utility allowance is calculated or disclosed less than 50%, are classified as H1 and H2, respectively, with the peak market size of 10 billion yen or more and the peak market size of 5 billion yen or more. According to the publicly available information on C2H, all of the items designated as H2 have already been evaluated.

The analysis period for cost-effectiveness evaluation is 9 months for company analysis, 3 months for public analysis or 6 months for re-analysis, and 2 to 3 months for comprehensive evaluation by a specialized organization, which in total takes more than one year from the selection of items for evaluation. In Japan, not all drugs are subject to the cost-effectiveness evaluation system, which targets drugs and medical devices that are highly innovative and have a large fiscal impact (with some exceptions, such as for pediatric patients), so the number of cases is limited compared to other countries, which must be considered when discussing the analysis results.

In this study, we targeted the items in Figure 1 whose evaluation status had been terminated, and investigated whether there were any differences in the treatment of costs or productivity losses included in the analysis between Japan and the U.K., and whether there were any other analyses other than the "public health care cost position". The survey covered items that were not listed as similar items, had information on costs and productivity losses in the information published by C2H, and for which NICE evaluation guidance had been published (Table 6).

Although the costs incorporated into the analysis for the four surveyed items differed depending on the comparison and contrast techniques used, only the portion of the costs that corresponded to Japanese public health care costs was included in the analysis for both Japan and the UK (for the UK, the results were from NICE), while in the UK, caregivers' quality of life was included in the denominator of the ICER for some items. In the U.K., however, caregiver quality of life is included in the denominator of the ICER (Table 7).

Based on these results, the differences in the overall assessment between Japan and the U.K. are described based on the U.K. NICE's assessment guidance for the four items, and the factors that led to their consideration.

Items requiring consideration such as anticancer drugs

Although Cabometix (generic name: cabozantinib malate) was not found in the CABOSUN trial, economic models estimated that it prolonged life by an average of about 6 months compared to standard treatment (sunitinib and pazopanib), and NICE considered this as a terminal stage ^{consideration16)} NICE added this as an end-of-life consideration16) . (TA542: untreated renal cell carcinoma) Similar to NICE, a higher than usual standard (7.5 million yen/QALY) is allowed in Japan. This is because this is an item that requires anticancer drugs and other considerations in Japan's comprehensive evaluation process. The results of the cost-effectiveness evaluation showed that sunitinib was the comparator technology for the first-line treatment of unresectable or metastatic renal cell carcinoma, and the ICER category was between 2 million yen/QALY and 7.5 million yen/QALY. After second-line treatment, everolimus and axitinib were used as the comparator technology, and the ICER category was between 2 million yen/QALY and 7.5 million yen/QALY. The price adjustment coefficients based on ICER category were all 1.0, weighted by the percentage of patients. The price adjustment factor based on the ICER category was 1.0 for both technologies, weighted by the percentage of patients, resulting in no change in price adjustment.

Enhertz (trastuzumab deluxe Tecan) was conditionally recommended using the Cancer Drug Fund (CDF) because it exceeds ICER criteria, although NICE concluded that it is likely to meet the criteria for end-of-life treatment because of its plausible improvement in survival at 3 months. This is a conditional recommendation using the CDF. (TA704) In Japan, as in NICE, a higher standard than usual (7.5 million yen/QALY) is allowed for ENHART because it is an anticancer drug. The results of the cost-effectiveness evaluation of Enhertz showed that for third-line or later treatment of HER2-positive inoperable or recurrent breast cancer with prior chemotherapy, trastuzumab plus vinorelbine was the comparator technology and the ICER category was between 7.5 million yen/QALY and 11.25 million yen/QALY. Patients with HER2-positive (IHC3+), curatively unresectable, advanced or recurrent gastric cancer with HER2-positive disease that progressed after cancer chemotherapy and who were to receive third-line chemotherapy, were treated with nivolumab as the comparator technology, and the ICER category was between 11.25 million yen/QALY and 15 million yen/QALY. For HER2-positive (IHC2+ and ISH+) patients receiving chemotherapy, nivolumab was the comparator technology and the ICER category was cost-incremental (equal efficacy and increased cost compared to the comparator technology). .1, weighted by patient proportion, resulting in a price adjustment of 2.15%.

Cabometix and Enhertz received action by raising the threshold because they were recognized as end-of-life treatments. Similarly, Japan uses a higher-than-normal standard (7.5 million/QALY) for anticancer ^drugs17), so these were found to receive similar consideration in Japan and the UK.

The results of the Japanese cost-effectiveness evaluation of Kymriah (generic name: tisagen lecleucel) are shown in Table 8. Detailed analyses were not available in the report because patient percentages were not disclosed due to company confidentiality. For the leukemia indication, the price was judged to be reasonable with an ICER category of less than 7.5 million yen/QALY for both target populations, but for the lymphoma indication, the price exceeded this threshold. As a result, a price adjustment of 4.3% was made; since the NICE evaluation guidance did not meet the criteria for end-stage treatment, the evaluation was made at the usual standard (20,000 to 30,000 pounds per QALY). Japan used a higher-than-normal standard (7.5 million/QALY) for evaluation, which led to differences in the overall evaluation between the two countries. Although different from the overall evaluation, we would like to add that NICE recommends the use of Kymriah through the CDF, so it is possible to use it in clinical practice in both Japan and the UK.

Items related to public care costs

The third edition of the Japanese analytical guidelines states that the impact on QOL values on family members and other caregivers and nurses may be taken into account when the analysis is conducted from a "public health and nursing care standpoint. None of the four items in the analysis took the public care position out of the non-public health care position (Table 7), and although NICE allows the addition of public health care and care effects to the basic analysis, since there were no differences in costs other than public health care costs among the items in this study, whether they were included in the utility values or not was not Investigated.

The NICE evaluation guidance for Yurtomiris (generic name: labulizumab) included health-related quality of life, including not only patients but also caregivers. We speculate that this is due to the fact that the current therapy, eculizumab, is administered at 2-week intervals, whereas yurtomilis is better administered every 8 weeks, among other factors. Caregiver health quality of life values were changed to be used in the calculation of ICER after the third edition of the analytical guidelines, and it is expected that they will be included in future cost-effectiveness analyses in Japan.

The NICE evaluation guidance for Cabometix uses the utility values used in the guidance for tivozanib because QOL data were not collected in the CABOSUN trial. A review of the tivozanib guidance confirmed the description of quality of life for patients, but not for family and other influences. Although Japan's analysis is from a public healthcare standpoint, it is based on data from the METEOR study (comparison of cabozantinib and everolimus) for second-line and later treatment and estimated using Japanese quality of life values, so the impact of family members and others is not indicated.

Items related to productivity loss

Kimuria has an analysis other than the "public health care cost position" and submits the results of a firm analysis that includes productivity losses (Table 9). In accordance with the Analytical Guidelines, 2nd Edition, the analysis including productivity losses was not used to adjust prices, but the results of the analysis were such that the cost savings described with respect to productivity would be reduced. Kimuria had a significant impact on costs related to productivity losses because treatment allows for almost complete reintegration into society.

It is difficult to say from this case alone whether the impact of kimuria on productivity has the potential to be applied to other items in the future, and we would like to wait for further evaluation cases to accumulate. In addition, as mentioned above, NICE did not include productivity loss in its evaluation results. This is an issue that should be considered in Japan in the future to determine how the impact of productivity loss should be used for price adjustment. Among the comprehensive evaluation, there are various things to consider, such as whether the ICER category needs to be raised as in the case of anticancer drugs, etc., or whether a price adjustment factor that exceeds 1.0 should be used. However, the items selected for cost-effectiveness evaluation are those with significant fiscal impact, and it is necessary to take into account the social situation in Japan when considering price adjustment. In addition, since the impact of productivity loss is an indirect cost, the scope of its inclusion in the analysis, estimation methods, etc. still vary among countries. In the future, we would like to examine cases in which the impact of productivity loss is reflected in the evaluation, referring to recent cases in the Netherlands, South Korea, Sweden, and other countries where analysis including productivity loss has been conducted.

Treatment of public care costs in the UK NICE Technology appraisal (TA) guidance

Although there were differences between Japan and the U.K. in terms of the position of analysis, the third edition of the Guidelines for Analysis states that analysis from the "public health and care perspective" may be conducted if the impact on public long-term care costs is important for the technology under evaluation. Since Table 7 was limited to four target items, we will base our discussion on a report examining another set of evaluation guidance in the United Kingdom.

The results of the survey of 30 publicly available UK NICE TA guidance documents shown in Table 10 indicate that 13 included costs for in-home care services and facility care services covered by Japanese long-term care insurance, and another 6 were under consideration for inclusion.19) Six included costs for direct non-medical care services, and one included costs for in-home care services and facility care services covered by Japanese long-term care insurance, In six cases, the final decision was based on the analysis results excluding direct non-medical expenses such as nursing care costs, because it was difficult to identify whether each item of direct non-medical expenses included in the costs was within the scope of services covered by the PSS (Personal Social Services). The report is based on the results of an analysis that excludes direct non-medical expenses such as nursing care costs.

Although this report is limited to neurological conditions, based on the position of the UK analysis, 43% (13/30) of the cases included costs related to public care costs.

Summary and Future Prospects

This paper examines the operation of Japan's cost-effectiveness evaluation system to date and, through comparison with the UK, considers whether the current cost-effectiveness evaluation is sufficient or whether the process necessary to properly evaluate the various values of pharmaceutical products requires expansion. In the current comprehensive evaluation, the standard values for items that require consideration, such as anticancer drugs, have been raised, and consideration for anticancer drugs seems to be more flexible compared to the lack of standard values such as for terminal care in the UK. On the other hand, how to evaluate public care costs and productivity loss in the future, which could be an indicator of social factors such as reduction of the burden of caregiving by patients' families and improvement of labor ^{productivity19)}, although there is a movement to include QOL values of family caregivers, etc. in the analysis, the reduction of family caregivers' burden (physical and mental However, while the UK has reflected and taken into account the QOL values of family caregivers in its analysis of care costs (e.g., physical and mental burden) ^{5) and} services covered by the PSS, in Japan there are no or few examples of their use in evaluations, and the issue of obtaining Japanese data is still an issue for future consideration. In the cost-effectiveness evaluation system for the purpose of price adjustment, as mentioned in the handling of public long-term care costs, those already incorporated into ICER, as in the U.K., should be incorporated into the analysis by referring to examples from other countries, including the U.K., such as incorporating the QOL of family caregivers into the analysis, or by incorporating the QOL of family caregivers in the comprehensive evaluation process. Various measures could be considered, such as raising the criteria for ICER categories as requiring consideration, such as anticancer drugs, or establishing a price adjustment factor that exceeds 1.0. However, in the case of drugs like Kymriah, which have an impact when there is an avoidance of productivity loss that exceeds medical costs, the financial impact is so great that the balance between benefits and burdens must also be taken into account, and the extent to which this can be added in the price adjustment framework when the evaluation process is expanded is a new This is a new issue to be considered when expanding the evaluation process.

In addition, the survey covered a limited number of products (four), and the information published in the report was limited. We look forward to a review of the system and further accumulation of cost-effectiveness evaluation cases in order to properly evaluate the various values of highly innovative drugs. 2.

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