Cadth’s $50,000 Cost-Effectiveness Threshold: Fact or Fiction?

Abstract

Objectives: The Canadian Agency for Drugs and Technologies in Health (CADTH) does not formally state a cost-effectiveness threshold for new medicines. A threshold of CAD$50,000 per quality-adjusted life-year (QALY) is often cited as a benchmark, but there is limited evidence to confirm the accuracy of this figure. To inform future submissions, CADTH appraisals were reviewed to determine whether a cost-effectiveness threshold can be inferred. Methods: All publicly-available CADTH appraisals (assessed under the common drug review [CDR] or pan-Canadian Oncology Drug Review [pCODR]) from January 2010 to May 2016 were reviewed. The decision, rationale, and economic analysis presented were extracted. Results: Between January 2010 and May 2016, CADTH published 279 drug appraisals: 215 under CDR and 64 under pCODR. 29 submissions (10%) were recommended, 163 (58%) were recommended with restrictions, and 87 (31%) were not recommended. Cost-utility analyses were presented in 63/64 pCODR submissions and 83/215 CDR submissions, with other forms of economic analysis (e.g. cost-minimization, cost comparison) in the remaining submissions. Incremental cost-effectiveness ratios (ICER, expressed in cost per-QALY) were often revised upwards by the review committee, and submissions were commonly recommended with restrictions conditional on improved cost-effectiveness. In several appraisals, CADTH included wording such as “a [X%] price reduction would be required for the ICER to fall to [~$50,000]” or “the ICER was $50,000. Conclusions: There is some evidence to suggest that CADTH’s cost-effectiveness threshold is ~$50,000 per-QALY, but this is neither consistently applied nor explicitly stated. Further, CADTH will often make decisions based on alternative forms of economic analysis. Although cost-effectiveness analysis has limitations, formally stating a cost-effectiveness threshold would improve transparency and may improve equitable access to new medicines