Page 79 - Effective healthcare cost containment policies Using the Netherlands as a case study - Niek W. Stadhouders

The marginal benefits of healthcare spending in the Netherlands
Chapter 4
The marginal benefits of healthcare spending in the Netherlands
Medical innovations have been a major driver of health care growth (Smith et al., 2009), but also brought along major increases in health and longevity (Cutler and McClellan, 2001; Skinner and Staiger, 2015). Recently, however, a more disturbing trend has become visible as pharmaceutical companies target smaller patient groups, and new drugs are becoming much more expensive at modest effectiveness gains (Pearson, 2017). For example, Spinraza®, a new drug targeting the orphan disease spinal muscular atrophy (SMA), entered the US market in 2017 with estimated treatment costs of $375,000 to $750,000 per patient per year. More and more countries question whether these new medicines should be reimbursed. Denmark refused reimbursement of Spinraza®, citing unacceptable high costs. In the UK, reimbursement was refused pending price negotiations. The Irish National Centre for Pharmacoeconomics suggested a tenfold decrease in the price of Spinraza®, estimated at €501,069 per QALY, before reimbursement would be cost-effective (NCPE, 2017). In the Netherlands a price reduction of 85% was deemed necessary before uptake into the mandatory benefit package would be advised (ACP, 2018). At the same time that these new technologies demand extra funds, health spending is becoming increasingly constrained (Robinson, 2015). Therefore, new technologies increasingly require disinvestment of existing care (Hollingworth et al., 2015).
4.1 Introduction
To guide spending decisions, health losses due to disinvestment should be compared to the gains of innovations. This idea is embodied in cost-effectiveness thresholds: new technologies should add more value than a predefined threshold in order to be reimbursed (Neumann et al., 2014). Countries using thresholds include the UK, New Zealand, Australia and Ireland (Edney et al., 2018; Eichler et al., 2004; Harris, 2016; O’Mahony and Coughlan, 2015). The Netherlands currently uses a range of reference values for new drugs of between €20,000 and €80,000 (Reckers-Droog et al., 2018). However, these thresholds have no empirical base and thus may not truly reflect the opportunity costs, risking inefficient reimbursement decisions (Thokala et al., 2018). If the aim of the health system is to maximise population health, improving the estimate of the opportunity costs could inform the decision process and increase population health. Opportunity costs could be empirically estimated using a supply-side approach (Woods et al., 2016). For the UK, utilising regional variation in spending and outcomes, a threshold of £12,936 per QALY was estimated (Claxton et al., 2015a). Recently, cost-effectiveness thresholds have also been estimated for
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