Impact of technology advances on cost effectiveness of drugs

Abstract

Inappropriately designed economic decision models can direct decision makers to make incorrect choices when selecting an agent for therapy. This dissertation aims to demonstrate the influence of health technologies on the costs, effectiveness and cost-effectiveness ratios of drug therapies. The empirical analysis was performed by using living donor kidney transplantation as a case study, with data from the University of Maryland. The first objective was to assess the impact of a switch in the type of surgery from the open donor to the laparoscopic donor nephrectomy procedure on the cost-effectiveness of tacrolimus. The second objective was to assess the impact of a potential learning curve associated with new technology on the cost-effectiveness ratio of tacrolimus. Clinical data for the study was obtained from the Division of Transplantation, graft rejection information from the pathology department, and financial information from the billing department. The use of tacrolimus was associated with a 56% lower risk for acute rejections, but with increased associated charges of {dollar}16,791. An unadjusted estimation of the cost-effectiveness ratio (CE), resulted in a marginal amount of {dollar}282,737 to avoid an acute rejection. Accounting for technological adoption to laparoscopic donor nephrectomy and other covariates (comorbidities, rejection, in-hospital stay, donor relation, demographics), the marginal amount was re-estimated to be at {dollar}165,055, which was {dollar}117, 682 lower than the original unadjusted estimate. The influence of the learning curve of the new technology was assessed by calculating the CE-ratio with each additional transplant procedure performed. With each additional laparoscopy patient, the CE ratio improved initially, till it reached a steady state, indicating that the learning curve influenced CE-ratio estimations. The results suggest that improvements in the surgical technique impact on the cost-effectiveness ratios of immunosuppressive regimens. If not accounted for, changes in health technology could confound the results when estimating the cost effectiveness of drugs. The cost-effectiveness ratio of a new technology tends to improve over time as the implementation costs are distributed over a longer time span and improvements are made through the process of learning. The cost-effectiveness ratio is a dynamic measure since technology is not a constant term in the real world.