Over the past 30 years, the focus in health technology assessment in Australia has been to promote assumption driven simulated imaginary cost-effectiveness claims. The Australian Pharmaceutical Benefits Advisory Committee (PBAC) guidelines for cost-effectiveness value claims are in this tradition: a belief that imaginary or ‘approximate information’ claims are both a necessary and sufficient guide for pricing and access in formulary decisions. While the Commonwealth government has long supported these guidelines, increasing concerns over the burden imposed on manufacturers by regulation and the lengthy process by which claims finally were accepted by the PBAC led to the 2022-2027 strategic agreement between the Commonwealth and Medicines Australia. An assessment of the PBAC guidelines is a key part of the review with a number of position papers presented in late 2023 following earlier consultation. Unfortunately, little will probably change if the parties continue to endorse both the creation of imaginary non-evaluable claims, putting to one side the standards of normal science, as well as continuing to ignore the standards for Rasch or fundamental measurement. The quality adjusted life year (QALY) continues to play a central role in imaginary although, with ordinal utilities it is a mathematically impossible construct.

The purpose of this brief note is to make the case for rejecting outright the current PBAC belief in the gold standard of assumption driven model simulations to create imaginary (false and non-evaluable) cost-effectiveness claims and a continued reliance on ordinal scores to asses cost-effectiveness rather than the Rasch standard of interval or ratio measures which have been a standard outside of HTA for over 50 years. The proposed new start in HTA for Australia is to base all value claims whether for clinical physical outcomes, patient or caregiver reported outcomes and drug and resource utilization outcomes (not costs) on three premises:

  • All value claims must refer to single attributes that meet the demarcation standards for normal science: they must be credible, evaluable and replicable
  • All value claims, notably for patient or caregiver reported outcomes. must be consistent with the limitations imposed by the standards of fundamental measurement: they must be unidimensional with linear, interval and invariance properties
  • All value claims must be supported by an agreed protocol detailing how they are to be assessed in a meaningful timeframe

Acceptance of these premises means the rejection of assumption driven, modeled simulation and imaginary (non-evaluable or false) cost-outcomes claims; in particular incremental cost-outcomes ratios. In effect, the PBAC guidelines. This is the solution, if  the PBAC (or successor group) is to retain credibility. The focus must be on protocol supported value claims which can be evaluated and reported to health decision makers in a meaningful timeframe, supporting ongoing reappraisals over the lifetime of the product.

Working Paper No. 2 2024 is a shorted version of the submission to the HTA Review. The link is: