Suppose there is a very serious illness—let’s call it horror-With significant impact on patient morbidity and mortality. is the only available treatment for horror
There is a medicine called Blackpill. The blackpill improves health outcomes by 1 QALY compared to best supportive care (BSC), but costs $500,000 over the patient’s lifetime. Despite not being cost-effective by traditional standards, payers felt it was unethical not to give the blackpill to horribilis patients due to the severity of the disease.
Now a new medicine named Greenpill has come in the market. The greenpill is twice as effective as the blackpill, producing 2 QALYs versus the BSC, and costs only $1 more ($501,000 lifetime cost). Should payers cover Greenpill?
While most HTA bodies and payers would say ‘yes’, a paper by Walton et al. (2026) argue that the answer is ‘no’. Historically, HTA bodies have operated in an incremental world. Since the standard of care is the blackpill, paying $1 for an additional QALY is a much bigger deal than the blackpill. However, Walton says Blackpill is not as cost-effective as BSC. In fact, Greenpill is not cost-effective compared to BSC ($500,001 additional cost/2 additional QALYs ≈$250,000/QALY). Walton argues that neither the Blackpill nor the Greenpill should be reimbursed.
The authors claim that the incremental cost-effectiveness analysis is based on the premise that the standard of care (in this case the blackpill) is cost-effective. This is not always the case. To address this problem, Walton and co-authors propose 3 options:
- Reevaluate all treatments. The authors argue that NICE in the UK could re-use its Multiple Technology Appraisal (MTA) process to periodically reassess all technologies within an indication in one overarching guideline and recommend reimbursement accordingly. While theoretically possible, this would not be practical in reality as many treatments are used without formal HTA assessment.
- Reevaluate all treatments only when new treatments are introduced. This approach is much more feasible – it involves less evaluation – but it is also highly problematic. First, existing medical innovations will be evaluated in an ad hoc manner (depending on whether the new treatment is introduced). Second, why would any pharmaceutical company bring a new product to market with so much uncertainty?
- Adjust the WTP threshold when the current standard of care is cost-ineffective. If the standard of care was not cost effective, the WTP threshold would be lowered. This is exactly what ICER does with its ‘shared savings’ approach. One problem is that diseases are of our own making. horror-Those involving cost-effective treatments often have the most serious diseases. My own research (Shafrin et al. 2025) found that the shared savings approach would target “rare, serious, and pediatric diseases”…even though these are exactly the types of diseases we want to create new medicines for!
For the makers of Greenpill, receiving $501,000 for their treatment could be a good return on investment. However, if Greenpill is compared to BSC, they will only receive $300,000 (assuming a $150,000/QALY threshold). That means 40% reduction in price. This would mean that pharmaceutical companies would be less likely to develop drugs for diseases where existing standards of care are cost ineffective.
Implementing the regime proposed by Walton and co-authors would be highly problematic for society. If the greenpill had never been developed, patients would have been stuck with the less good blackpill technology (only 1 QALY gain) or forced to undergo BSC. Furthermore, the analysis does not take into account dynamic pricing; It is likely that blackpills (and eventually greenpills) will become generic drugs and provide health benefits at lower costs for many years to come.
Although my scenario is hypothetical, it may come to the UK soon. The 2025 NHS 10-year plan provides new NICE statutory powers to withdraw access to cost-ineffective treatments. It is unclear to what types of therapies it will be implemented (and when).
I agree that re-evaluating the blackpill after the initial evaluation is helpful when new information comes to light (e.g., the drug is more/less effective or more/less safe based on real-world data). This new evidence can be useful in increasing or decreasing the price of the drug.
However, if no new information is available, and BlackPill was determined to be eligible for coverage – perhaps due to significant unmet need, severity of illness, etc. – then there is no point in repeating this. If the blackpill were determined not to be eligible for reimbursement, it is true that the greenpill would require larger health benefits to be considered cost-effective.
The main question for HTA bodies is whether Greenpill reimbursement would make the world a better place? Because you can only pay $1 for 1 additional QALY, the answer is definitely yes. Asking if patients horror
Whether any treatment is worth receiving (say with Blackpill) is also a valid question, but it has been answered before (during Blackpill reviews – either positively or negatively). While HTA bodies performing MTA could reduce costs, it would impose a significant barrier to innovation as it would create significant pricing uncertainty and actually lead to HTA decisions being changed without new evidence.
In summary, I look to Walton et al. Highly problematic approach. What do you think?
