Measuring the cost-effectiveness of vaccines targeting infectious diseases: Lessons learned from COVID-19

Cost-effectiveness modelling is a powerful tool in understanding the value health interventions can bring to populations. For vaccines that target infectious diseases, as Pragya Khurana and Dr Richard Pitman of ICON explain, cost-effectiveness research can power evidence generation and decision-making that helps keep people safe.

As the world saw with COVID-19, infectious diseases and the pandemics they cause can put immense strain on healthcare systems, particularly with regard to labour, resources, and funding. Nearly three years after the initial outbreak began, the UK’s National Health Service (NHS) still feels the pandemic’s burden. Even today, many patients have to wait 12 or more hours to be admitted to accident and emergency departments, and cancer patients are forced to delay treatment due to slim provider availability.

“By almost every measure of performance of the NHS, it’s apparent that the system is under extreme strain,” says Richard Pitman, PhD, lead health economist and epidemiologist at ICON. “In that environment, the cost of delivering services has increased.”

To help manage the burden of infectious diseases, vaccines are a powerful public health tool, as well as a medical intervention, explains Pragya Khurana, epidemiologist at ICON. By reducing not only the inoculated person’s disease risk, but also that of those around them, vaccines generate value for healthcare systems by reducing transmissions and improving patient outcomes.

But as pandemics evolve, healthcare costs shift, and more vaccines come to market, how do these environmental factors impact the cost-effectiveness of vaccines over time?

Health economics researchers such as Dr Pitman and Khurana use real-world evidence (RWE) to build cost-effectiveness models that demonstrate the value that vaccines bring to healthcare systems. With an increasingly strained NHS and a looming threat of additional pandemics, their research can inform policymakers’ strategies for future vaccine rollout processes. By applying learnings from COVID-19 to build smarter cost-effectiveness models, there is much that healthcare researchers can do to improve the policy-level response to future public health emergencies.

An overview of cost-effectiveness modelling

Cost-effectiveness models help healthcare stakeholders weigh the cost of a medical intervention against the benefit it brings to people and populations.

“Within health economics,” Khurana explains, “cost-effectiveness modelling seeks to establish which of a set of alternative interventions would provide the greatest health benefit to a population, given the amount of funding and resources available.” The models are informed by a set of inputs, she continues, including the costs that are associated with the intervention itself and the savings that result from the reduction of disease.

To measure health gains, researchers use Quality-Adjusted Life Years (QALYs), “a unit that aims to standardise the value of health outcomes by the length and quality of life for patients,” says Khurana. According to the UK’s National Institute for Health and Care Excellence (NICE), one QALY is equal to one year of life in perfect health, meaning a person is able to carry out their normal activities free of pain or mental disturbance.

Cost-effectiveness, then, is often expressed as a ratio of the additional cost per QALY earned, or the incremental cost-effectiveness ratio, says Khurana.

Considerations for researchers building vaccine cost-effectiveness models

When studying the cost-effectiveness of a vaccine, researchers must take a variety of factors into account.

“When you do cost-effectiveness analyses, you construct a transmission model that tries to predict the number of future cases of an infectious disease that there will be under the current system, versus how many there will be if you introduced a new vaccine,” Dr Pitman explains. These calculations also consider the ways the vaccine is deployed, such as how many doses are recommended in a regime, how many boosters are required to maintain protection, and the net impact of immunity in a population.

To gather the data needed to build these cost-effectiveness models, researchers have increasingly moved from clinical trial data to RWE.

“Clinical trial estimates of incidence of outcomes may not be representative of the patient experience in real practice,” Khurana says.

Clinical trials, which occur in a highly controlled environment and include only people of certain demographic and health backgrounds, have often been criticised for their lack of representativeness. Instead, real-world data (RWD) – the raw information from insurance or administrative claims, electronic health records, patient registries, or other sources which, when analysed, becomes RWE – may more accurately depict health outcomes in specific regions because they include a wider group of the population.

RWE also offers a more holistic, often longitudinal view of patients’ health over time, where clinical trial data represents a momentary picture of health outcomes during a specified time window. Health economists can select relevant, country-specific RWD sources to power their cost-effectiveness models in a way that represents the regions and populations they seek to understand.

In addition to data considerations, it’s also important that health economists understand the country and health system-specific context that may impact the model and the decisions it seeks to inform.

For example, in the UK, Dr Pitman explains, the NHS operates within a fixed budget. This means that the NHS has a set amount of money to spend on health interventions, and, as a result, introducing a new intervention to NHS populations means that the funds used to purchase that product must be allocated away from another area within the health system.

These calculations are especially important when purchasing a vaccine to distribute to an entire population in order to ward off infectious disease.

“In order to justify spending money on a new vaccine and not on the other things that it would have been used for, the amount of health that you get from the new vaccine must exceed what would have been the benefit had that money remained in the health service,” Dr Pitman says.

Using cost-effectiveness evidence to inform vaccine decision-making

Stakeholders across healthcare use information from cost-effectiveness models to shape their vaccine decisions.

For the pharmaceutical companies that manufacture vaccines, researchers may use RWD to feed models of how their company’s vaccine impacts the ongoing transmission of a disease in the real world. These can be critical inputs to understanding the vaccine’s effectiveness after it’s approved. Then, given evidence of health gains, pharma could leverage the information to set a price for their product.

Cost-effectiveness evidence can be key for pharma leaders as they engage with regulators and payers.

“Pharmaceutical companies aim to provide evidence that their vaccine is as effective as it appeared in the clinical trials, then offer a price that would mean that their vaccine is deemed cost-effective by reimbursement bodies,” Dr Pitman says.

On the other side of healthcare decision-making, regulatory and reimbursement bodies may use cost-effectiveness model outputs to apply a population health lens to balancing costs and health gains. In the UK, for example, the NHS must make decisions on behalf of about 40 million residents who are eligible to receive a vaccine. Therefore, not only must they assess the safety and efficacy of a vaccine, Dr Pitman explains, but they also must understand which choice of vaccines would provide the best control of the disease.

“They use cost-effective modelling as evidence to inform policy,” Khurana says. “It’s a very quantifiable way to evaluate the trade-offs and opportunity costs, not only from an economic and clinical perspective, but also from a societal perspective.”

While patients may not perform cost-effectiveness research themselves, Khurana says, they feel the impact of the policy decisions it informs through the vaccines available to them and any subsequent effects on their or their loved ones’ health.

“If vaccines are provided and allocated as efficiently as possible, it means you’re getting the most increase in QALY, or you’re allowing patients in other aspects of the health system to receive better health outcomes as well,” Khurana says. “They’re interconnected.”

Importantly, cost-effectiveness research also raises the standard for future vaccines.

“The process of putting vaccines through that evaluation means there is a continual pressure for vaccines to be improved and for patients to get access to the best vaccines that the health system can afford,” Dr Pitman says.

Findings on the economic impact of COVID-19 on UK healthcare resources

The severity of COVID-19 created a unique environment for vaccine development. “The early vaccines that were rolled out didn’t have to go through formal cost-effectiveness evaluations because, in comparison to a baseline of no vaccine, they were going to have shown beneficial health outcomes in immunised individuals,” Khurana says. “As long as those vaccines were safe, moderately effective, and not extraordinarily high priced, they would be deemed cost-effective.”

However, introducing new vaccines into the COVID-19 environment became more difficult as the pandemic and vaccine standards evolved. For example, Khurana continues, as healthcare costs increased during the pandemic, so did the cost of a QALY. “This increases the economically justifiable price of a vaccine entering a more expensive healthcare environment,” she says. “Especially in a fixed budget system, this means budgetary constraints.”

A cost-effectiveness study from ICON investigated the increased healthcare costs caused by COVID-19 and how this may impact the cost-effectiveness ratio for new vaccines. Given the high cost incurred by the pandemic – estimated at £89 billion on health and social care – the cost of one QALY also increased. Therefore, if the cost of a QALY was about £30,000 before the pandemic, and now costs, for example, £60,000, this would mean that the same amount of money spent before the pandemic on a year of good health may now only achieve half of a QALY. While a new vaccine or other health intervention may be seen as cost-effective in this environment, due to budget squeezes and rising costs, it may not necessarily be affordable for a health system.

“There’s tension between the idea of the affordability and the budget impact of a new vaccine versus its cost-effectiveness,” Dr Pitman says.

In addition to the immense financial strain COVID-19 placed on all parties, the pandemic also posed novel challenges to the data scientists and epidemiologists involved in RWE research. For health economists like Khurana, “the general uncertainty around the epidemiological aspects of COVID made it difficult to forecast trends,” she shares.

Researchers turned to learnings from influenza and other past infectious diseases to inform cost-effectiveness modelling efforts during COVID-19.

“We used a combination of statistical approaches to better understand the surveillance and administrative RWD, hand-in-hand with targeted studies, to provide the base data for the modelling that goes into cost-effectiveness,” Dr Pitman says.

Though questions remain about COVID-19 and its impact – both on health economics and beyond – Dr Pitman acknowledges that “what you see in the data is the tip of the iceberg.” Ongoing efforts from the Office of National Statistics and other groups to increase testing and data reporting have helped to make progress on gaining a full picture of COVID-19’s effects on healthcare.

Looking ahead to future pandemics and the impact of cost-effectiveness research

Dr Pitman doesn’t view COVID-19 as a once-in-a-century event, especially with an increasingly connected global population. The pandemic has, however, provided a “wake-up call” to emergency responders, and systems are being put in place to collect data quickly that can power cost-effectiveness models and further research to inform policymakers’ decisions.

The response to future infectious disease outbreaks, Dr Pitman explains, must be holistic. While cost-effectiveness is a key measure as new interventions are introduced to the market, he says, “I wouldn’t want people to think of cost-effectiveness as the be-all and end-all of public health in terms of vaccines.” As new strains or new pathogens emerge, public health leaders must harness the lessons learned from COVID-19 to ensure an effective response.

“Overall, cost-effectiveness modelling is quite a powerful tool to quantify and take into consideration multiple factors that impact health and healthcare,” Khurana says. “By combining that with some of the things we’ve learned from a societal perspective during this pandemic, we can gain the most insight moving forward.”

Critically, this includes “a continual re-evaluation of vaccines and the health system in order to make sure that we maintain the necessary control – and remain prepared for things that might be thrown at us in the future,” Dr Pitman says.

As global healthcare systems continue to recover from COVID-19, it’s important to keep in mind the critical role that vaccines play in keeping people safe and healthy.

“Vaccines remain one of our most cost-effective interventions, but at the same time, because they’re so good, they’ve become a victim of their own success,” Dr Pitman says. Infectious diseases can have devastating effects, but because conditions like polio have been largely eradicated due to vaccines in high-income countries, people may forget about their contribution to the reductions in childhood mortality, improvements in general health, and increased standards of living.

“Those diseases haven’t gone away. Maintaining people’s faith in vaccines and the maintenance of national immunisation programmes is critical to our ongoing health,” Dr Pitman says.

“My parting remarks,” Khurana offers, “are to wash your hands and get vaccinated.”

Pragya Khurana, MPH, has focused on epidemiology and data analytics projects within the real-world evidence space. She has experience in multiple therapeutic areas, including oncology and infectious diseases. Pragya has a strong understanding of epidemiologic study design and conduct of analysis, and she has provided statistical programming support and insight at various RWE study stages.

Richard Pitman, PhD, has over 30 years’ experience in the epidemiology, burden of illness, and mathematical modelling of infectious diseases, particularly relating to the cost-effectiveness of interventions and policy issues. Disease area expertise includes influenza, SARS, rotavirus, respiratory syncytial virus, tuberculosis, directly transmitted childhood infections, and HIV.

ICON plc is a world-leading healthcare intelligence and clinical research organisation. From molecule to medicine, we advance clinical research providing outsourced services to pharmaceutical, biotechnology, medical device, and government and public health organisations. We develop new innovations, drive emerging therapies forward and improve patient lives. With headquarters in Dublin, Ireland, ICON employed approximately 41,150 employees in 113 locations in 53 countries as of 30 September 2022. For further information about ICON, visit: www.iconplc.com.

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