Health Economics at the Crossroads of Centuries – From the Past to the Future

China's current strategy to improve how health services are paid for is headed in the right direction, but much more remains to be done. The problems to be resolved, reflecting the setbacks of recent decades, are substantial: high levels of out-of-pocket payments and cost escalation, stalled progress in providing adequate health insurance for all, widespread inefficiencies in health facilities, uneven quality, extensive inequality, and perverse incentives for hospitals and doctors. China's leadership is taking bold steps to accelerate improvement, including increasing government spending on health and committing to reaching 100% insurance coverage by 2010. China's efforts are part of a worldwide transformation in the financing of health care that will dominate global health in the 21st century. The prospects that China will complete this transformation successfully in the next two decades are good, although success is not guaranteed. The real test, as other countries have experienced, will come when tougher reforms have to be introduced.

National public insurance for drugs is often based on evidence of comparative effectiveness and cost-effectiveness. This study describes how that evidence has been used across 3 jurisdictions (Australia, Canada, and Britain) that have been at the forefront of evidence-based coverage internationally. To describe how clinical and cost-effectiveness evidence is used in coverage decisions both within and across jurisdictions and to identify common issues in the process of evidence-based coverage. Descriptive analysis of retrospective data from the Common Drug Review (CDR) of Canada, National Institute for Health and Clinical Excellence (NICE) in Britain, and Pharmaceutical Benefits Advisory Committee (PBAC) of Australia. All publicly available information as of December 31, 2008, was gathered from each committee's Web site (data set begins in January 2004 [CDR], February 2001 [NICE], and July 2005 [PBAC]). Listing recommendations for each drug by disease indication. NICE recommended 87.4% (174/199) of submissions for listing compared with a listing rate of 49.6% (60/121) and 54.3% (153/282) for the CDR and PBAC, respectively. Significant uncertainty around clinical effectiveness, typically resulting from inadequate study design or the use of inappropriate comparators and unvalidated surrogate end points, was identified as a key issue in coverage decisions. Recommendations varied considerably across countries, possibly because of differences in the medications reviewed; different agency processes, including the willingness to negotiate on price; and the approach to "me too" drugs. The data suggest that the 3 agencies make recommendations that are consistent with evidence on effectiveness and cost-effectiveness but that other factors are often important. NICE, PBAC, and CDR face common issues with respect to the quality and strength of the experimental evidence in support of a clinically meaningful effect. However, comparative effectiveness and cost-effectiveness, along with other relevant factors, can be used by national agencies to support drug decision making. The results of the evaluation process in different countries are influenced by the context, agency processes, ability to engage in price negotiation, and perhaps differences in social values.