Uncertainty and Cures: Discontinuation, Irreversibility, and Outcomes-Based Payments: What Is Different About a One-Off Treatment?



The advent of “cures” for gene disorders1 and for some long-term conditions such as hepatitis C virus has raised several policy and analytical challenges. These arise in part from both assumptions routinely made when conducting cost-effectiveness analysis, which might need to be revised when evaluating cures, and rigidities within most healthcare systems, which are particularly acute when dealing with a cure. We assume that the healthcare system should not be biased in favor of cures, or biased against them. Cures should be judged in terms of the expected returns offered to the payer and the patient.


For simplicity we focus on one uncertain parameter—duration of treatment effect. We assume that although the existence of the health effect is immediately visible, the duration of the health effect is unclear. The consequences of the effects not lasting may be either reversion to the previous health state (with whatever treatment regimen was supporting this) or a need to re-treat with the cure; that is, the effect is not permanent but can be repeated. For simplicity we assume reversion to the previous health state is the only option.


Figure 1 presents the incremental costs and effects associated with the one-off and repeat-dose treatments (compared with routine treatment) in the incremental cost-effectiveness plane. Given the fixed, upfront, cost associated with the one-off treat- ment, there is very little uncertainty in the associated expected costs (essentially a horizontal line) although there is considerable uncertainty in the expected QALYs associated with treatment. For the repeat-dose therapy, there is a high level of uncertainty in both the expected costs and expected QALYs and the 2 are posi- tively correlated, reflecting the fact that the iterations where the treatment generates the most QALYs (ie, treatment is most effec- tive) involve longer treatment duration and thus greater costs.

As such, for the one-off treatment it is the iterations in which the treatment is least effective (ie, the duration of effect is the shortest) that are not cost-effective whereas the opposite holds for the repeat- dose treatment. Here, it is the iterations in which the treatment is most effective (ie, the duration of effect is the longest) that result in ICER values that are close to (above) the threshold. This is because in these iterations the costs of repeat-dose treatment are higher, and because of the assumption of waning effectiveness, the additional cost of producing each additional QALY increases in these iterations.

Figure 2 shows the cost-effectiveness acceptability curve (CEAC) and the expected value of perfect information (EVPI) associated with the one-off treatment and repeat-dose treatment, respectively, compared with routine treatment. The degree of decision uncertainty (as measured by the EVPI) associated with the one-off treatment is 4 times that of the repeat-dose treatment, with a maximum population EVPI of more than $160 million as compared with less than $40 million, and a probability of being cost-effective at the $50 000 threshold of 86% as compared with 100% for the repeat-dose treatment. Because treatment outcomes are the same in terms of QALY gains and the net present value of treatment cost is the same, and we have only a prevalence effect with no continuing incidence, the only difference between the 2 treatment profiles is the discontinuation effect, that is, the irreversibility of payment should the one-off treatment stop working. The effect of introducing an outcomes-based payment equivalent to the cost of the one-off treatment will, however change the profile of the one-off treatment to resemble the ongoing treatment (ie, the financial irreversibility is removed for the payer).


Payers are concerned that one-off cures bring great uncertainty with the consequential risk of incorrect adoption decisions, and significant budget impact from large one-off payments. Innovators worry about bias against cures in favor of repeat treatment, which is not in patients’ interest. At stake is the need to ensure that health systems are not biased in either direction: “for” or “against” one-off treatments. We find that even in the absence of a difference in uncertainty of outcomes, adverse payoffs differ. The greater financial risk associated with a cure is related to the issue of treatment discontinuation, driven by irreversibility. Financial arrangements or risk sharing can, however, eliminate differences for the payer as between one-off and repeat therapies by removing the financial impact of the irreversibility. Outcomes-based payments rather than amortization payments are likely to better reflect the underlying irreversibility, but can be equivalent when treatment failure results in rapid death. We also note that pragmatic adjustments may need to be made to take account of cost-ineffective comparators and of the potential impact of new entrants, which will change the price dynamics as between the one-off and repeat forms of treatment.

AuthorsAdrian Towse, MA, MPhil, Elisabeth Fenwick, PhD
JournalISPOR Value in Health
Therapeutic AreaOther
Service AreaModeling & Meta-Analysis
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