Bring out your dead: A review of the cost minimization approach in health technology assessment submissions to the Australian Pharmaceutical Benefits Advisory Committee

Objectives: Published literature has levied a barrage of criticism against the cost-minimization approach to economic evaluation for new medicines. The prevailing papers on the topic has declared its ‘death’. However, the approach is the primary means by which new medicines are listed for public subsidy in Australia. The Pharmaceutical Benefits Advisory Committee (PBAC), which assesses new medicines for public subsidy, maintain Methodology Guidelines that indicate when the approach would be acceptable. While these Methods Guidelines establish requirements for cost-minimization that is theoretically robust and avoid the issues identified in the literature, adherence to these Methods Guidelines has not been assessed. This research aims to explore the factors that influence the PBAC recommendation for subsidy of new medicines that use a cost-minimization approach to economic evaluation, including adherence to the Methodology Guidelines.
Methods: Relevant information was extracted from public summaries of cost-minimization submissions assessed between 2005 and 2022. A generalized linear model was fitted, with control variables selected through an iterative feature selection process using the Bolasso Method.
Results: Preliminary results suggest that aspects relevant to adherence to the Methodology Guidelines reduce the likelihood of recommendations and the preponderance of evidence indicate that the PBAC was willing to recommend submissions despite nonadherence to the Methodology Guidelines.
Conclusions: Key stakeholders should consider whether the approach accepted for cost-minimization is appropriate or whether the Methodology Guidelines require revision. Nonadherence reduces the clarity and increases the uncertainty of how a submission process will eventuate for the pharmaceutical company. For the health system and patients, nonadherence could introduce inferior medicines at equivalent costs, resulting in patients having suboptimal outcomes and potentially increased healthcare and other costs.