Published in:
01-08-2017 | Practical Application
How to Appropriately Extrapolate Costs and Utilities in Cost-Effectiveness Analysis
Authors:
Laura Bojke, Andrea Manca, Miqdad Asaria, Ronan Mahon, Shijie Ren, Stephen Palmer
Published in:
PharmacoEconomics
|
Issue 8/2017
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Abstract
Costs and utilities are key inputs into any cost-effectiveness analysis. Their estimates are typically derived from
individual patient-level data collected as part of clinical studies the follow-up duration of which is often too short to
allow a robust quantification of the likely costs and benefits a technology will yield over the patient’s entire lifetime. In
the absence of long-term data, some form of temporal extrapolation—to project short-term evidence over a longer
time horizon—is required. Temporal extrapolation inevitably involves assumptions regarding the behaviour of the
quantities of interest beyond the time horizon supported by the clinical evidence. Unfortunately, the implications for
decisions made on the basis of evidence derived following this practice and the degree of uncertainty surrounding
the validity of any assumptions made are often not fully appreciated. The issue is compounded by the absence of
methodological guidance concerning the extrapolation of non-time-to-event outcomes such as costs and utilities.
This paper considers current approaches to predict long-term costs and utilities, highlights some of the challenges
with the existing methods, and provides recommendations for future applications. It finds that, typically, economic
evaluation models employ a simplistic approach to temporal extrapolation of costs and utilities. For instance, their
parameters (e.g. mean) are typically assumed to be homogeneous with respect to both time and patients’
characteristics. Furthermore, costs and utilities have often been modelled to follow the dynamics of the associated
time-to-event outcomes. However, cost and utility estimates may be more nuanced, and it is important to ensure
extrapolation is carried out appropriately for these parameters.