Cost-effectiveness analysis and formulary decision making in England: Findings from research

In a context of rapid technological advances in health care and increasing demand for expensive treatments, local formulary committees are key players in the management of scarce resources. However, little is known about the information and processes used when making decisions on the inclusion of new treatments. This paper reports research on the use of economic evaluations in technology coverage decisions in England, although the findings have a relevance to other health care systems with devolved responsibility for resource allocation. It reports a study of four local formulary committees in which both qualitative and quantitative data were collected. Our main research finding is that it is an exception for cost-effectiveness analysis to inform technology coverage decisions. Barriers to use include access and expertise levels, concerns relating to the independence of analyses and problems with implementation of study recommendations. Further barriers derive from the constraints on decision makers, a lack of clarity over functions and aims of local committees, and the challenge of disinvestment in medical technologies. The relative weakness of the research-practice dynamics in this context suggests the need for a rethinking of the role of both analysts and decision makers. Our research supports the view that in order to be useful, analysis needs to better reflect the constraints of the local decision-making environment. We also recommend that local decision-making committees and bodies in the National Health Service more clearly identify the 'problems' which they are charged with solving and how their outputs contribute to broader finance and commissioning functions. This would help to establish the ways in which the routine use of cost-effectiveness analysis might become a reality. Summary of findings - Local formulary decision-making committees vary in their capacity, functions and scope of responsibility. Their primary function appears to be to control spending rather than evidence-based technology coverage. - Most committees routinely request information on clinical effect and costs but few request cost-effectiveness information. - Case study committees had only limited capacity to access and interpret economic evaluations. Further barriers included concerns regarding bias in studies, the inability to implement savings, and ethical objections to underlying values of health economics. - A number of features of the decision-making environment appeared to militate against emphasis on cost-effectiveness analysis including: unclear relationships with resource allocators; an explicitly political decision-making process, and; poorly specified decision-making criteria. - These factors, combined with constraints on the capacity to generate, access and interpret information, led to a minor role for cost-effectiveness analysis in the decision-making process.