NOTE: This article is the eighth in a series of 10 articles and is part of our Economic Evaluation in Healthcare 101 course. You can find a course overview and links to all 10 course modules here:

Economic Evaluation in Health Technology Assessment (HTA)

As healthcare systems globally strive to deliver effective, equitable, and sustainable care, the need for evidence-based decision-making has grown ever more critical. At the intersection of economics, clinical effectiveness, and policy lies Health Technology Assessment (HTA)—a multidisciplinary process that evaluates the value of health technologies to inform reimbursement, pricing, and implementation decisions. Among the core components of HTA is economic evaluation, which systematically compares the costs and outcomes of healthcare interventions. This essay explores the role of HTA in decision-making, presents case studies of major HTA agencies, and discusses the global landscape of economic evaluation and HTA.

1. Role of HTA in Decision-Making

HTA serves as a bridge between scientific evidence and healthcare policy. It is defined by the World Health Organization as “the systematic evaluation of properties, effects, and/or impacts of health technology” (WHO, 2015). Health technologies include pharmaceuticals, medical devices, diagnostic tests, surgical procedures, and public health interventions.

HTA agencies play a crucial role in determining coverage, pricing, and reimbursement decisions. Governments and healthcare payers use HTA findings to decide whether to approve new drugs, negotiate pricing with manufacturers, or set reimbursement policies. HTA also helps ensure equity in healthcare access by prioritizing interventions that provide the greatest benefit to society.

For example, a new cancer drug may extend life expectancy but be extremely costly. HTA evaluates whether the additional cost justifies the health benefits, guiding policymakers on whether the drug should be covered by public health insurance or require price negotiations.

Economic evaluation within HTA focuses on assessing the cost-effectiveness of interventions—asking not only “Does it work?” but also “Is it worth it?” The aim is to ensure that healthcare investments maximize value for money while improving population health.

Key functions of HTA in decision-making include:

  1. Reimbursement and coverage decisions: Determining whether a technology should be funded by public or private payers.
  2. Price negotiation and risk-sharing: Supporting discussions on cost-based pricing and conditional reimbursement.
  3. Clinical guideline development: Informing the incorporation of technologies into national or regional treatment pathways.
  4. Budget impact assessment: Estimating short-term affordability alongside long-term value.

Economic evaluation methods used in HTA commonly include cost-effectiveness analysis (CEA), cost-utility analysis (CUA)—often expressed in cost per quality-adjusted life year (QALY)—and budget impact analysis (BIA). Together, these methods allow for a comprehensive appraisal of both clinical and economic value.

Reference:

  1. Drummond MF, Sculpher MJ, Claxton K, et al. (2015). Methods for the Economic Evaluation of Health Care Programmes, 4th ed.

2. Case Studies: NICE (UK), CADTH (Canada), ICER (US)

NICE (National Institute for Health and Care Excellence, UK)

Established in 1999, NICE is globally recognized for its rigorous and transparent HTA processes. It uses cost-utility analysis with QALYs as the standard measure of health benefit and applies a willingness-to-pay (WTP) threshold of approximately £20,000–£30,000 per QALY.

Key features:

  • Requires submission of detailed economic models from manufacturers.
  • Considers equity, innovation, and disease severity in addition to cost-effectiveness.
  • Issues guidance that is binding for the National Health Service (NHS) in England and Wales.

Example: NICE’s recommendation to fund CAR-T therapies like Kymriah was based on a managed access agreement due to clinical uncertainty and high costs, reflecting its use of conditional reimbursement mechanisms (NICE, 2018).

CADTH (Canadian Agency for Drugs and Technologies in Health)

CADTH provides non-binding HTA recommendations for public drug plans across Canadian provinces. Its Common Drug Review (CDR) process evaluates clinical, economic, and patient evidence, often using a cost-utility framework.

Key features:

  • Engages patients and clinicians through structured input submissions.
  • Collaborates with the pan-Canadian Pharmaceutical Alliance (pCPA) for price negotiation.
  • Uses incremental cost-effectiveness ratios (ICERs) and contextual considerations (e.g., budget impact, unmet need).

Example: CADTH’s evaluation of eculizumab (Soliris) for atypical hemolytic uremic syndrome recommended price reductions due to extremely high costs per QALY, illustrating its use of economic evaluation to promote affordability.

ICER (Institute for Clinical and Economic Review, US)

ICER is a non-governmental body that produces HTAs to inform pricing and access in the largely market-based U.S. system. Its reports often guide decisions by private insurers and pharmacy benefit managers.

Key features:

  • Uses CEA and CUA to calculate cost per QALY and cost per equal value life year gained (evLYG).
  • Applies value-based price benchmarks to assess alignment with clinical benefit.
  • Encourages transparency by publicly releasing draft reports for stakeholder comment.

Example: ICER’s 2021 review of aducanumab for Alzheimer’s disease found it not cost-effective at current prices, influencing payer coverage decisions despite FDA approval.

References:

  • NICE. (2018). Technology appraisal guidance: Tisagenlecleucel for treating relapsed or refractory B-cell acute lymphoblastic leukaemia in people aged up to 25 years.
  • CADTH. (2022). Guidelines for the Economic Evaluation of Health Technologies: Canada, 4th ed.
  • ICER. (2021). Aducanumab for Alzheimer’s Disease: Effectiveness and Value.

3. Global Perspectives on Economic Evaluation and HTA

While HTA is well-established in high-income countries, its importance is growing in low- and middle-income countries (LMICs), where resource constraints make priority setting essential.

Emerging HTA systems:

  • Thailand’s HITAP (Health Intervention and Technology Assessment Program) integrates HTA into national decision-making, using cost-effectiveness thresholds based on GDP per capita.
  • Brazil and Colombia have introduced HTA to support their universal health systems.
  • India launched the Medical Technology Assessment Board (MTAB) to support cost-effective health service expansion.

Global health institutions such as the World Health Organization (WHO) and Health Technology Assessment international (HTAi) advocate for HTA as a tool for universal health coverage (UHC). They emphasize capacity building, institutional frameworks, and data systems as enablers of sustainable HTA in diverse settings.

However, challenges persist, including:

  • Limited local data on costs and outcomes.
  • Capacity constraints (e.g., lack of trained health economists).
  • Political and institutional barriers to implementation.

Despite these obstacles, HTA is increasingly recognized as a key enabler of evidence-informed, equitable health systems around the world.

References:

  • Teerawattananon Y, Tantivess S, Yothasamut J, et al. (2009). Historical development of HTA in Thailand. Int J Technol Assess Health Care, 25(S1), 241–252.
  • WHO. (2015). Health technology assessment: Global overview and its role in universal health coverage. Geneva.

Conclusion

Economic evaluation is central to the function of Health Technology Assessment, helping decision-makers identify interventions that offer the most value for health investment. Institutions like NICE, CADTH, and ICER exemplify the diverse ways HTA frameworks are applied in different health systems. Globally, HTA is gaining prominence as countries seek to balance innovation with affordability and health equity. As healthcare demands grow, robust, context-specific HTA systems supported by high-quality economic evaluations will remain indispensable tools for sustainable health policy.

References

  • Drummond MF, Sculpher MJ, Claxton K, et al. (2015). Methods for the Economic Evaluation of Health Care Programmes, 4th ed. Oxford University Press.
  • NICE. (2018). Technology appraisal guidance: Tisagenlecleucel for treating relapsed or refractory B-cell acute lymphoblastic leukaemia.
  • CADTH. (2022). Guidelines for the Economic Evaluation of Health Technologies: Canada, 4th ed.
  • ICER. (2021). Aducanumab for Alzheimer’s Disease: Effectiveness and Value.
  • Teerawattananon Y, Tantivess S, Yothasamut J, et al. (2009). HTA in Thailand. Int J Technol Assess Health Care, 25(S1), 241–252.
  • WHO. (2015). Health technology assessment: Global overview and its role in universal health coverage. Geneva.
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