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- PublicationNICE's Discounting Review: Clear Thinking on Rational Revision Meets Obstacle of Industrial InterestsThe National Institute of Health and Care Excellence (NICE) recently published a review of discounting practice and theory as part of a consultation on its current methods guidelines. The review examines the case for revision or retention of current methods. The changes considered include eliminating favourable rates in certain special cases and the reduction of the base-case rate for costs and health effects from 3.5 to 1.5%. The review also notes the potential need to reduce the cost-effectiveness threshold to accommodate a discount rate reduction, explaining that an agreement between the UK government and the pharmaceutical industry proscribes changing NICE's threshold range until the end of 2023. We believe NICE should be commended for a useful overview of the existing literature and relevant issues. We firmly endorse NICE's view that favourable discount rates are not a good way to apply a preference for certain interventions. Similarly, we support the option of reducing the discount rate to 1.5%, which better accords with real government borrowing costs. We suggest further work to clarify the appropriate theoretical basis for the NICE's social discount rate and the sensitivity of the threshold to changes in discounting. The prospects of a necessary discount rate reduction appear to depend on whether a threshold reduction can be achieved within NICE's current range or if the range itself must be revised downwards. NICE has usefully informed the debate around discount rates. Ultimately, the path to a methodologically consistent and evidence-based revision of discounting depends on whether NICE needs to adjust the threshold too and if it is free to do so.
Scopus© Citations 1 11
- PublicationDiscounting the Recommendations of the Second Panel on Cost-Effectiveness in Health and MedicineTwenty years ago, the "Panel on Cost-effectiveness in Health and Medicine" published a landmark text setting out appropriate methods for conducting cost-effectiveness analyses of health technologies. In the two decades since, the methods used for economic evaluations have advanced substantially. Recently, a "second panel" (hereafter "the panel") was convened to update the text and its recommendations were published in November 2016. The purpose of this paper is to critique the panel's updated guidance regarding the discounting of costs and health effects. The advances in discounting methodology since the first panel include greater theoretical clarity regarding the specification of discount rates, how these rates vary with the analytical perspective chosen, and whether the healthcare budget is constrained. More specifically, there has been an important resolution of the debate regarding the conditions under which differential discounting of costs and health effects is appropriate. We show that the panel's recommendations are inconsistent with this recent literature. Importantly, the panel's departures from previously published findings do not arise from an alternative interpretation of theory; rather, we demonstrate that this is due to fundamental errors in methodology and logic. The panel also failed to conduct a formal review of relevant empirical evidence. We provide a number of suggestions for how the panel's recommendations could be improved in future.
Scopus© Citations 22 6