Developing Guidance for Budget Impact Analysis

Abstract

The role of economic evaluation in the efficient allocation of healthcare resources has been widely debated. Whilst economic evidence is undoubtedly useful to purchasers, it does not address the issue of affordability which is an increasing concern. Healthcare purchasers are concerned not just with maximising efficiency but also with the more simplistic goal of remaining within their annual budgets. These two objectives are not necessarily consistent. This paper examines the issue of affordability, the relationship between affordability and efficiency and builds the case for why there is a growing need for budget impact models to complement economic evaluation. Guidance currently available for such models is also examined and it is concluded that this guidance is currently insufficient. Some of these insufficiencies are addressed and some thoughts on what constitutes best practice in budget impact modelling are suggested. These suggestions include consideration of transparency, clarity of perspective, reliability of data sources, the relationship between intermediate and final end-points and rates of adoption of new therapies. They also include the impact of intervention by population subgroups or indications, reporting of results, probability of re-deploying resources, the time horizon, exploring uncertainty and sensitivity analysis, and decision-maker access to the model. Due to the nature of budget impact models, the paper does not deliver stringent methodological guidance on modelling. The intention was to provide some suggestions of best practice in addition to some foundations upon which future research can build.

Cost-Effectiveness Analysis and the Formulary Decision-Making Process

“…BIA, also called cost-impact analysis, provides an approach to evaluate the true financial impact of a new drug on the provider' s budget, an increasing concern with new drug introductions and rising overall drug costs. 46 BIA typically evaluates the total pharmacy costs incurred by adding 1 new drug into the formulary, from the purchaser' s perspective. For example, Meyer et al, using administrative claims data, estimated the incremental budget impact of a new interferon beta-1a product.…”

The use of budget impact analysis in the economic evaluation of new medicines in Australia, England, France and the United States: relationship to cost-effectiveness analysis and methodological challenges

“…Good practices for budget impact analysis (BIA) have been increasingly developed since the year 2000 [1,2]. As a financial approach, BIA is currently mandatory to support manufacturers' formulary submissions for national or provincial reimbursement in many countries (e.g.…”

Budget impact analysis in economic evaluation: a proposal for a clearer definition

“…It assesses the financial consequences of the introduction of a new technology in a specific setting in the short-to-medium term [1]. BIA is supposed to be complementary to more established types of EEs, providing additional information for decisions on the reimbursement of new technology [1].…”

“…This sort of measure can only be introduced by additional funding or by disinvesting from alternative treatments, the latter generally being very difficult in practice [1].…”

“…BIA should provide useful information to tackle the new hurdle of ''affordability'', after having fulfilled the better-known hurdles of ''safety'', ''efficacy'', and ''added value'' of new treatments over existing ones [1,3,7].…”