The Irish Cost-Effectiveness Threshold: Does it Support Rational Rationing or Might it Lead to Unintended Harm to Ireland’s Health System?

Abstract

Ireland is one of the few countries worldwide to have an explicit cost-effectiveness threshold. In 2012, an agreement between government and the pharmaceutical industry that provided substantial savings on existing medications set the threshold at €45,000/quality-adjusted life-year (QALY). This replaced a previously unofficial threshold of €20,000/QALY. According to the agreement, drugs within the threshold will be granted reimbursement, whereas those exceeding it may still be approved following further negotiation. A number of drugs far exceeding the threshold have been approved recently. The agreement only applies to pharmaceuticals. There are four reasons for concern regarding Ireland's threshold. The absence of an explicit threshold for non-drug interventions leaves it unclear if there is parity in willingness to pay across all interventions. As the threshold resembles a price floor rather than a ceiling, in principle it only offers a weak barrier to cost-ineffective interventions. It has no empirical basis. Finally, it is probably too high given recent estimates of a threshold for the UK based on the cost effectiveness of services forgone of approximately £13,000/QALY. An excessive threshold risks causing the Irish health system unintended harm. The lack of an empirically informed threshold means the policy recommendations of cost-effectiveness analysis cannot be considered as fully evidence- based rational rationing. Policy makers should consider these issues and recent Irish legislation that defined cost effectiveness in terms of the opportunity cost of services forgone when choosing what threshold to apply once the current industry agreement expires at the end of 2015

Cost-effectiveness thresholds: methods for setting and examples from around the world

“…Irish regulators legally established a 45,000 EUR/QALY threshold for HTA of pharmaceuticals in 2012, after an agreement between government and the pharmaceutical industry [97,98]. This value substituted the previous implicit threshold of 20,000 EUR/QALY.…”

“…New medicines with ICERs below 45,000 EUR/QALY will have its reimbursement guaranteed, and the prices of other new medicines would be further negotiated. It has been argued that the value chosen has no empirical basis and should be revised to account for opportunity costs [97,98].…”

Personalising adherence-enhancing interventions using a smart inhaler in patients with COPD: an exploratory cost-effectiveness analysis

“…Adherence-enhancing interventions seem generally cost-effective, given all ICERs are below the Irish cost-effectiveness threshold of €45,000/QALY. 8 In other words, this means that all adherence-enhancing interventions would cost less than €45,000 to gain one life-year in perfect health. For each cluster, the theoretical intervention would result in additional life years and QALYs gained.…”

Beneluxa: What are the Prospects for Collective Bargaining on Pharmaceutical Prices Given Diverse Health Technology Assessment Processes?

“…Finally, an obvious and fundamental part of the HTA decision framework is the use of cost-effectiveness thresholds. Ireland is the only Beneluxa member that has a clear threshold, which is currently €45,000 per quality-adjusted life-year (QALY) [11]. The Dutch do not employ a single threshold but suggest a wide range of €20,000-80,000 per QALY, depending on disease severity [10].…”