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Assessing Medical Technologies (1985)

Chapter: 6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration

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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Suggested Citation:"6. Medical Technology Assessment in Developed Countries: Trends and Opportunities for Collaboration." Institute of Medicine. 1985. Assessing Medical Technologies. Washington, DC: The National Academies Press. doi: 10.17226/607.
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Medical Technology Assessment in ~ Developec! Countries Trends and JO Opportunities for Collaboration Health technology increasingly is the ob- ject of public concern not only in the United States but also in other industrial- ized countries. For years these govern- ments have directed their health care ex- penditures toward safety, efficacy, and equitable access to care. But in the early 1970s health care costs increased steadily, approaching 7-10 percent of the gross na- tional product (GNP) in many countries (Table 6-1) (Department of Health and Human Services iDHHS], 1982; Groot, 1982~. For example, in 1970 West Ger- many spent 3.7* percent of its GNP on sickness funds (the insurance that covers 99 percent of the population with virtually full benefits) and 8.0 percent in 1980; costs in the Netherlands increased from 7.2 per- cent of GNP in 1971 to 8.6 percent in 1980 This chapter was prepared by Enriqueta Bond, in part based on materials contributed by David Banta, Seymour Perry, and Duncan Neuhauser. * There are other sources of data that estimate that Germany spends a far higher proportion of its GNP on health care than these data from sickness funds indi- cate. The important point is the percent difference in expenditures over the years. 228 (Office of Technology Assessment [OTA], 1980; Shepard and Durch, 1984). As a result, a number of countries have begun cost-containment efforts that relate costs to effectiveness. These efforts have rekindled interest in international collaboration on technology assessment for new purposes. The needs of industrialized and develop- ing countries for medical technology as- sessment differ. Developing countries try to emphasize simple and effective technol- ogies that the countries can afford, but in- dustrialized countries ask whether the rapid development of highly sophisticated technology overshoots the target, serves the medical professions more than the pa- tients, and drives health care costs too high. This latter concern, the interest of in- dustrialized countries in technology assess- ment and how better to foster interna- tional collaboration, is the subject of this chapter. This chapter begins by reviewing the ap- proaches and policies of various developed countries for medical technology assess- ment. The trend is toward more efforts in medical technology assessment, and a few countries are trying to develop a coherent

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES TABLE 6-1 Health Care Costs in Selected Countries as Percentage of GNP, 1980 Countries Health Care Costs as Percentage of GNP, 1980 (unless otherwise noted) 7.5 6.7 (1978) 3.7 8.0 7.8 8.4 (1978) 6.4 10.4 (1977) 8.6 5.6 9 5b 10.0 (1982-1983) Belgium Denmark Greece West Germany France Ireland Italy Luxembourg The Netherlands United Kingdom United Statesa Sweden a U.s. data from U.S. DHHS (1982~. b United States in 1982: 10.5 percent GNP, according to Fall 1983 Health Care Financing Review. SOURCE: Groot (1982~. system for such assessment. Next the chap- ter describes case studies of medical tech- nology assessment for specific technologies in different countries. The case studies il- lustrate the differences in approaches to medical technology assessment and the needs of different countries. Finally, the efforts of international organizations to es- tablish collaboration in technology assess- ment are examined for their applicability as models for an international system of technology assessment. TRENDS IN ASSESSMENT AND REGULATION A review of the current approaches and policies of different countries for assessing drugs and devices and controlling equip- ment purchases finds that there is increas- ing concern for safety, efficacy, costs, and social and ethical issues. This has catalyzed new institutional mechanisms for technol- ogy assessment. However, the institutional arrangements that exist to regulate medi- cal technology and to carry out assessments 229 vary substantially from country to coun- try. Most industrialized countries have con- sistent national policies and institutional arrangements for evaluating the safety and efficacy of drugs. These appear to have been strengthened in recent years, influ- enced to some extent by the United States Food and Drug Administration's example and assistance to other countries. The cur- rent World Health Organization program on effective drugs to assist countries that want to improve their drug regulatory sys- tems reinforces this trend. However, systematic regulation of de- vices has been established only in the United States, Sweden, Japan, and Can- ada; most assessment of devices elsewhere proceeds on an ad hoc basis. Even in coun- tries with policies for assessment of devices, these mechanisms are of more recent origin and less systematic than for drugs. Sweden is one of the few countries to de- velop a national policy or institutional ar- rangement for the assessment of devices, equipment, and procedures used in medi- cal care. The Swedish Planning and Ra- tionalization Institute of Health Services (SPRI) was established in 1968 by the Swedish government and the Federation of County Councils (the health care authori- ties), and has been involved in the conduct of technology assessment since 1980 (SPRI, 1981~. The organization has a mandate to solve problems confronting those who work in the health care sectors and to pro- mote better use of existing health services resources. Additional tasks include infor- mation dissemination, establishment of standard specifications for hospital equip- ment, and planning. In 1981 the SPRI budget was $8 million (total health service expenditures that year were $11 billion). A 15-member board oversees the work of the organization, whose central task is to pro- vide advice that promotes a cost-effective health service. An example of one of their activities was the consensus conference on

230 hip joint replacement discussed later in this report. In contrast to Sweden, professional organizations in other countries, i.e., pri- vate groups, have shouldered what assess- ment exists of medical practice. RESEARCH AND DEVELOPMENT All developed countries have policies to- ward scientific research and technologic development (R&D). Since World War II, governments of the industrialized world have become deeply involved in support- ing R&D in many different fields. Increas- ingly, R&D for health has been seen as an appropriate investment. Across all indus- trialized countries, health R&D probably accounts for about 10 percent of all R&D expenditures by government (OTA, 1980~. Nevertheless, different countries take very different approaches to planning and sup- porting biomedical research. They vary greatly in the total amount of support the government provides, in the proportions of that support given to different fields and kinds of research, in the role of the private sector in research support, in the mecha- nisms used to set priorities and choose re- search projects, and in the institutions and individuals that carry out the work (Shep- ard and Durch, 1984~. Table 6-2 shows the estimated spending of both public and private dollars in 1980 on biomedical research and development in 19 countries that are members of the Or- ganization for Economic Cooperation and Development (OECD). Support for R&D is highly concentrated in only a few coun- tries, with the United States accounting for nearly half of the total support for research among them. Japan, West Germany, France, and the United Kingdom, together with the United States, make up almost 85 percent (Shepard and Durch, 1984~. Therefore, it is likely these countries will provide the bulk of the primary data infor- mation available for technology assessment or at least are potentially the major sup- ASSESSING MEDICAL TECHNOLOGY TABLE 6-2 Amount and Distribution of Total Biomedical Research and Develop- ment (BAIRD) Funding, 1980 (in millions of 1975 U. S. dollars Country BMRD Funding 5,256 1,523 1,271 712 495 299 257 251 229 176 122 94 69 52 41 32 Percentage of Total BMRD in all Countries 4g.18 13.96 11.65 6.53 4.54 2.74 2.37 2.30 2.10 1.62 1.13 0.86 0.63 0.48 0.37 0.29 14 0.13 10 0.09 6 0.05 United States Japan West Germany France United Kingdom Italy The Netherlands Sweden Switzerland Canada Belgium Denmark Australia Spain Norway Finland New Zealand Portugal Ireland a Includes public and private funds. SOURCE: Shepard and Durch (1984~. porters of technology assessment. Estab- lishment of technology assessment efforts are not necessarily dependent upon the generation of biomedical data by the coun- try involved. Sweden and Canada, two of the leading countries engaged in technol- ogy assessment, are not among the highest supporters of biomedical research and de- velopment. Other countries may provide special op- portunities for technology assessment be- cause of unique data collection systems or populations at high risk for the condition of study. For example, Sweden has a Na- tional Bureau of Statistics that assembles data concerning all Swedish patients, iden- tified by their social security numbers. Be- cause social security numbers are used for medical record identification, all medical services rendered to a given individual can

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES be accounted for and used in tabulating national health statistics. A country with a high prevalence of a particular disease, for example pertussis in England, may offer an opportunity for testing a new vaccine from somewhere else. How much of the total amount of sup- port for R&D is devoted to technology as- sessment in different countries is difficult to determine. The R&D system in most countries is largely decentralized, has a large private involvement, and often takes place in academic settings or in research centers. Academics in some countries, such as England and the United States, play a large role in shaping biomedical research priorities. However, since the 1960s more governmental efforts have gone into influ- encing research priorities in order to fur- ther social goals. The United States' "war on cancer" is one example. Many countries now evaluate the bene- fits, risks, and costs of medical technology (Council of Science and Society, 1983, Groot, 1982; OTA, 1980; SPRI, 1979; U.S. DHHS, 1981~. The Swedish program has been described. Canada has established a special activity in the federal government to develop guidelines for use of technology based on the best available scientific data. Australia has funded a special program to evaluate medical technology. Such pro- grams are being discussed in France, West Germany, and the Netherlands, among others. These programs develop informa- tion as an aid to making decisions. Governments increasingly want answers to such questions as which technologies should be covered by national health insur- ance. Although rising health care costs have fueled much of this increased interest, the improvement of medical practice still is an underlying rationale for technology as- sessment (U. S. DHHS, 1981) . The interna- tional exchange of data would facilitate the assessment of programs of many coun- tries, but only if some agreement on com- mon methodology is reached. 231 Assessment of technologies can be di- vided into two broad categories: 1. assessment of safety, quality, efficacy, and effectiveness; and 2. assessment of the effects of technology on the organization, law, economics, and ethics of health care and on society. Because most countries define safety simi- larly, the greatest benefits of sharing data probably would be gained in assessment of safety and efficacy of drugs, devices, or techniques. Cultural differences and dif- ferences among health care systems could make economic, ethical, and social consid- erations less comparable. Nevertheless, ex- change of information on these matters of less commonality could provide new in- sights or approaches to problems and aid establishment of compatible policies for as- sessment. Clinical Trials Clinical trials often are the preferred method for assessment of safety and effi- cacy. Because their results are often used in countries other than the country of origin, controlled clinical trials have international implications. Britain invests more per cap- ita than any other country in clinical trials because the total costs of patient care al- ready are borne by the National Health Service (OTA, 1980~. The apparent costs are low in comparison with the cost of trials in the United States, where some pa- tient care costs must come from research funding. Smaller countries might have problems in carrying out clinical trials, particularly if they lacked an adequate re- search establishment or imported most of the technology to be assessed. They might make financial contributions to help en- sure that technologies of interest to them are studied. However, mechanisms for such collaboration would have to be estab- lished before this could occur in a system- atic manner. First, for example, the coun-

232 try would need to develop ways of identifying those technologies it wishes to have assessed and then find a way of sup- porting the appropriate studies. Alterna- tively, a group of countries could get to- gether on a clinical trial and divide up the work. Consensus Activities In 1982 two consensus conferences on safety and efficacy issues related to hip joint replacement were held, one in the United States by the National Institutes of Health (NIH) Office for Medical Applica- tions of Research (OMAR), the second by the Swedish Medical Research Council and SPRI (NIH, 1982; Rogers, 1982; SPRI, 1982~. The two conferences were intended to be as similar as possible, employing the same formats and questions, but the Swed- ish conference went beyond the consider- ations of safety and efficacy by also consid- ering the need for and the costs of hip joint replacement. While similar in their con- clusions, the evaluation of safety and effi- cacy data in the NIH conference was more extensive in that more data were provided on indications, complications, etc. Fur- thermore, it is unlikely that results of eco- nomic and social considerations of the con- sensus conference in Sweden would be easily transferable for use by the United States because of the large differences in the financing and organization of health care. Despite these disparities, the similari- ties in the exercise open the way for further collaboration and indicate that informa- tion from such consensus conferences may be useful across countries. Perhaps more useful for exchange among countries would be the primary data used for such evaluations. The addition of economic and social considerations on the Swedish con- sensus exercise provides an interesting model for other countries. More recently, Britain sponsored a con- sensus development conference on its coro- ASSESSING MEDICAL TECHNOLOGY nary artery bypass surgery (Coronary Ar- tery Bypass Surgery: A Consensus, 1984; Stocking and Jennett, 1984~. Coronary ar- tery bypass surgery is of great interest be- cause of the wide difference in its fre- quency in different countries. If regular consensus programs develop in a number of different countries, a system for cross- national comparisons and data analysis may enhance their value in other coun- tries. Since several countries in Europe are considering establishing consensus confer- ences, this option may be realizable. Technology transfer often is aided by marketing efforts of the multinational companies or by organizations such as the U.S. Alliance for Engineering in Medicine and Biology. In 1973, a series of interna- tional workshops was held by the alliance, to aid governments, administrators, and executives in (1) formulating policies for planning, manufacturing, and medical and technical education and training, (2) coordinating the professional activities of physicians, life scientists, and biomedical engineers; and (3) developing facilities and personnel policies to open channels of com- munications among biomedical engineers and between biomedical engineers and health care professionals. Forums such as these provide opportunities for collabora- tion in the development of methodologies for appropriate assessment of technologies at the same time as assisting in technology transfer (American Institute of Biological Sciences, 1973~. Since technology transfer and assessment is fostered by programs of this sort, consideration should be given to enlarging such assessment efforts, espe- cially as related to technology transfer to developing countries. USE OF TECHNOLOGY IN DIFFERENT COUNTRIES Comparison of information on the use of medical technologies in different countries may indicate where costs may be saved by

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES changing patterns of use. Rasmussen (1981) has collected information on pace- makers in 13 different countries. A closer look at pacemaker utilization in four En- glish-speaking countries by Selzer (1983) reveals striking differences, with the United States leading by a substantial mar- gin (Table 6-3~. Such data suggest overuse of this technology in the United States or underutilization elsewhere. Similarly, a survey carried out by Groot (1982) in countries of the European Com- mon Market showed differences in num- bers of coronary bypass operations, com- puted tomography (CT) scanners, kidney transplants, and radiation units (Table 6-4~. There appear to be substantial differ- ences from country to country in both the numbers of operations and the numbers of 233 TABLE 6-3 Use of Pacemakers in Selected Countries in 1978 Country United States Canada Australia United Kingdom SOURCE: Seizer (1983). Number of Pacemakers per Million Population Use in Sinus- All Uses Node Disease 125 42 20 15 309 145 82 75 diagnostic equipment. Explanations for the striking national differences in use of different technologies may lie in differ- ences in economic capacities, differences in practice patterns, differences in health care delivery systems, and differences of need in the respective populations. Figure TABLE 6-4 Use of Technologies in Selected Countries per Million Population in 1981a Heart Operations Kidney CT Radiation Country All Coronary Bypass Transplants Scanners Units Belgium 202 [355] 29 12.60 3.7 [3-4] 4.55 [6] Denmark 160 [120] 27 2.4 [3.4] 5.50 Germany Federal Republic North- Rhine Westphalia Bremen Greece France Ireland Italy Luxembourg The Netherlands United Kingdom United States 190 [259] 106 [176] 72 18 [103] 131 [348] 154 [210] 397 [460] 66 [174]b 89 72 [90-100] 7,608 740 7.8 4.2 8.19 22.1 o 15.3 16.6 22 7 . 0.71 9.lc 3.4 6.7 1.23 0.98 [1.1-1.7] 1.45 2.05 8.45 2.8 [4] [5~7] [2.97] [1~1-2.35] 1.76 [3.62] 3.08 [6.15] 7.37 [6.45] 1.45 [2.91] 2.97 [8.91] 3.47 [5.66] 3.66 a Numbers in brackets indicate national planning/desirable guidelines. Data were not available for the spaces left blank. b Taken as half the total number of heart operations. c This value is for 1983.

234 ASSESSING MEDICAL TECHNOLOGY - ~ 300 Cal co o o . _ Q 200 o Q o . _ . _ a' Q - 100 At LL he > O r=0.766, n=35 Japan U.S.A. p = 0.0000001 Australia >~. ~ France ~ Denmark Israel ~ Italy ., . New Zealand ~ / Netherlands Spain ~ U.K~/ Greece ~ / South Africa / ~ G.[).R. I I ~ 1 1 , , I 1 1 1 , , , 1 F.R.G. Sweden Switzerland . o 5,000 10,000 15,000 G.N.P. (per capita in U.S. $ in 1979) FIGURE 6-1 Correlation between number of patients treated for ESRD and GNP in 1979. SOURCE: Groot (1982~. 6-1, from the report issued for the 11th Congress of the European Dialysis and Transplant Association, supports a hypoth- esis of economic capacity influencing use of technology by indicating that countries with larger GNPs treat a greater percent- age of patients diagnosed as having end- stage renal disease (ESRD). Recent analy- sis of the treatment of ESRD in Britain shows that despite the fact that there are no special rules about which patients may or may not be treated, access to renal dial- ysis is limited (Aaron and Schwartz, 1984, Wing, 1983~. Physicians functioning with a recognition of limited resources act as gatekeepers to limit dialysis. ASSESSMENT OF DRUGS IN DIFFERENT COUNTRIES Most European countries have regula- tions governing the safety and efficacy of drugs modeled on the Food, Drug, and Cosmetic Act of the United States, but the state of harmonization necessary for the acceptance by one country of a drug evalu- ated by another has not nearly been reached either among European countries or between the United States and any other developed country. For example, despite the desire in the United States for an im- proved pertussis vaccine such as the one made and accepted for use in Japan, the vaccine must undergo clinical trials with a possible delay of 4 years before licensure in the United States. Nevertheless, efforts are under way by the European Free Trade Association, the European Economic Community, and the World Health Orga- nization (WHO) to establish uniform stan- dards for-drugs and biologicals, and it might be supported by governments to pro- mote more international collaboration in the assessment of pharmaceuticals. As data

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES developed in one country already are used for assessment of drugs by the relevant in- stitution in another country, harmoniza- tion of requirements for regulatory nur- poses has the potential of saving costs and accelerating the marketing of useful drugs. Barriers to collaboration are raised by factors such as differences in the drug regu- latory agencies' organization and staff and differences in requirements for demon- strating safety and efficacy. Not only are the regulatory agencies different but also the industry differs from country to coun- try. The German pharmaceutical industry was developed primarily from chemical companies, the British pharmaceutical in- dustry has strong university roots, and the French pharmaceutical industry arose pri- marily from independent pharmacists working in the community compounding prescriptions. Furthermore, cultural dif- ferences in attitudes toward ill health, to- ward dying, and toward use of medication and differences in disease risks may affect the definition of safety and efficacy in dif- ferent countries. Political differences in the developed countries are reflected in the regulation of drugs, the activities of na- tional drug agencies, their communica- tions with each other, and the conse- quences that decisions made in one country have for another. So far, there are few offi- cial contacts among the drug regulatory agencies of the member states of the Euro- pean Economic Community, much less with the United States, nor is there mutual acceptance of drug applications, licensure, or a uniform policy on withdrawing drugs (Gross, 1980~. There are, however, many informal contacts and a few bilateral agreements between countries; for example, the United States has a memorandum of un- derstanding with Sweden and Canada concerning inspection of foreign manufac- turers. Bilateral agreement may offer spe- cial opportunities for collaboration be- tween two similar countries, for example, the United States and Canada. Further- 235 more, there are informal contacts fostered largely by WHO and by the desire of coun- tries to improve their regulatory processes. A closer look at some aspects of drug ap- proval in France and in West Germany re- veals some problems faced in information exchange. However, it also is apparent that similar information is required in both countries for determining safety and effi- cacy and that great benefits would occur from efforts to systematize collection and exchange of such data. Although decisions in one country may not be easily transfer- able, the information base for the decisions is transferable. France In 1978 the French Ministry of Health created the Commission d'Autorisation de Mise sur le Marche (CAMM) to advise it on drug marketing and authorization of new and old drugs (Weintraub, 1982~. The commission considers safety and efficacy, therapeutic indications, and information about medications to be provided to physi- cians and patients. CAMM is staffed by the Office of Pharmacy and Medications in the Ministry of Health. Members of CAMM are of two types. The first group is com- posed of physicians and pharmacists; the second group includes academicians, med- ical practitioners, and a hospital pharma- cist. Liaison members come from the Na- tional Institute of Health and Medical Research, the National Laboratory for Health, and the Office of Pharmacy and Medications. Observers from industry at- tend meetings and provide information. In 1980 CAMM reviewed 400 applica- tions of which 40 were for new drugs and 10 for new chemical entities (the rest were for combinations of already approved drugs). Decisions are based on reports pro- vided to CAMM on biopharmaceutical, pharmacologic, toxicologic, and clinical data. Some U.S. companies submit their data for these reports with an addendum specifically prepared by a French expert.

236 In addition to considerations of safety and efficacy, the economic impact of drug ap- provals on the government, the pharma- ceutical industry, and society comes into every debate, even though CAMM neither approves reimbursement through social se- curity nor advises the government on set- · . . tong prices. Once a drug has been approved for sale in France, there are no restrictions on ad- vertising or price. However, unless the drug is included on the reimbursable list of the social security system (which pays for medical care) there will not be a large mar- ket for it. In order to be placed on this list, the new drug must be shown to be more ef- ficacious, have fewer side effects, or cost less than a similar drug already on the list. Once placed on the list, the drug's price is set by the ministry and advertising is re- stricted. West Germany Drug regulation in West Germany was strengthened with the implementation in 1978 of a law (enacted in 1976) requiring approval of drugs for marketing (Gross, 1980~. The law gives more power to the Federal Health Office (Bundesgesundheit- samt) regarding acceptance, surveillance, quality control, distribution, and promo- tion of drugs. The new law also forces the agency to process drug applications within 4 months. From January 1978 to June 1980, about 850 applications for new drugs were submitted; 26 were rejected, 75 were withdrawn by manufacturers, and more data were requested for most of the rest. Pharmacologic, toxicologic, and clinical data, and expert assessment of these, must be submitted to a special committee before the agency accepts a drug. This committee consists of representatives from the medi- cal profession, dentistry, veterinary medi- cine, pharmacy, nonorthodox medicine, and the pharmaceutical industry. One ma- jor objection to the current law is its inade- ASSESSING MEDICAL TECHNOLOGY quate guarantee of efficacy. Comparative trials are not required. The agency may not refuse acceptance of a new drug if ther- apeutic results have been obtained in even a limited number of cases. It is easy to see from these two descrip- tions that both France and West Germany require similar information when assessing the safety and efficacy of a drug. However, the regulations for licensing drugs in the two countries are not identical. For exam- ple, in West Germany a drug must be li- censed if therapeutic results have been ob- tained in even a few cases. Therefore, the French authorities would not automati- cally accept a drug for marketing in France on the basis of its approval in West Ger- many. Efforts to collaborate on technology assessment then may need to be focused on the information-gathering level rather than on the policies for licensure resulting from the use of the information. Because West Germany does not require permission from the drug regulatory agency before clinical trials can begin, manufacturers from other countries sub- mit new drugs to first clinical studies in West Germany. However, language differ- ences and differences in attitudes about as- pects of the methodology or ethics of clini- cal trials may raise barriers to the conduct of trials in West Germany under protocols acceptable to France or other countries. Despite efforts for harmonization, drug regulation in Europe is still far from being coordinated, and the auspices for mutual agreement regarding the acceptance of new drugs or the acknowledgment of data are still rather poor (Gross, 1980~. Coordi- native assessment and regulatory efforts could be enhanced if the national institu- tions for drug assessment worked toward mutually acceptable standards. WHO has organized yearly workshops in Europe on clinical pharmacologic evaluation in drug control. From 1972 to 1978, seven of these workshops have taken place with partici- pation of agency representatives from 25

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES European countries. In the United States, recent revision of FDA regulations permits approval of drugs for domestic marketing solely on the basis of foreign data if certain criteria are met. However, acceptance of data from a country is not the same as ac- cepting licensure by one country as licen- sure to market in a second. Gross (1980) suggests that supranational regulations will be composed of the strictest national regulations, and that these guidelines will not facilitate either preclinical or clinical studies. HEALTH CARE SYSTEMS IN DIFFERENT COUNTRIES Technology assessment needs vary among nations according to differences in organization and resources of the various health care systems. Some may see a larger role for technology assessment to control cost of care, while others use budget allo- cations as the main device for cost control. These variations do not alter the need for technology assessment but they will affect the nature of assessments, the responsible institutions, and the user of the assessment information. These variations have to be accommodated in international collabora- tion. Countries can nevertheless learn from one another and apply selected approaches and findings of others. The following ex- amples illustrate how differing approaches to cost-containment affect the nature of technology assessment in different coun- tries. Britain In Britain the National Health Service (NHS) operates on a budget set by Parlia- ment (OTA, 1980~. Health care is provided to patients without charge at the point of service delivery. The district management is responsible for all hospital and commu- nity services. In turn, the district is part of 237 a larger area, overseen by regional authori- ties responsible to the Department of Health and Social Security (DHSS). While NHS funds are distributed to regions ac- cording to a complex formula based on population and modified by factors that indicate the need for health care, the re- gions and areas have the authority to allo- cate resources as they see fit. Regional and area health authorities de- cide how money is to be spent, what equip- ment is needed, and which should be pur- chased. Therefore, funds for equipment are in direct competition with other health capital needs. There are no formal proce- dures for the evaluation of medical de- vices; assessments proceed on an ad hoc ba- sis. Request for the evaluation of a particular procedure or piece of equipment may originate in a committee, unit, or council of the Medical Research Council, may be suggested independently by a re- searcher in a grant application, or may be requested by DHSS. Existing assessments are based almost entirely on clinical per- formance (safety and efficacy consider- ations) with little or no attention to gen- eral, social, or economic impacts of innovations. A recent report by the Coun- cil of Science and Society (1983) pointed out the haphazard manner in which expen- sive techniques are introduced into routine service. Criteria used for evaluation were deemed too narrow and too inattentive to patient reactions or to the social and psy- chological consequences of innovation. The report favored establishment of a na- tional institute of health services research to coordinate and commission research on important technologies including clinical trials; the analysis of costs; and epidemio- logical, psychosocial, and policy studies. Another of the institute's functions would be to disseminate information. The report urged the Secretary of State for Social Services to begin development of the institute by appointing an advisory group on expensive medical technologies

238 responsible for ensuring that such technol- ogies are properly evaluated clinically. Because capital needs in Britain must compete with operating expenses for a to- tal annual allocation of funds that is se- verely limited in virtually every region, costly technologies tend to spread there much more slowly than in the United States. For example, there was one com- puted tomographic scanner per 1,400,000 population in the United Kingdom in 1981 (Groot, 1982), in contrast to one per 110,000 population in the United States in 1980 (ECRI, 1983~. Japan Medical care in Japan is delivered largely by solo general practitioners in clinic settings (OTA, 1980~. The clinics generally possess 20 or fewer short-term (72 hours or less) beds. Hospitals are owned and managed by private physi- cians, unions, insurance plans, churches, and various levels of government. Tradi- tional public health and environmental health programs screening, immuniza- tion, physical exams for infants and school age children, etc. are administered in lo- cal health centers. Nearly all of the population is covered by health insurance that has evolved over 40 years from a broad law covering the working population. Patients in Japan have the right to seek care from any pro- vider, and the provider in turn is able to bill any of the patient's appropriate health insurance plans for the services rendered. Fees for each service are negotiated on an annual basis within the Central Social In- surance Medical Council, an advisory body to the Ministry of Health and Wel- fare made up of representatives from medi- cine, dentistry, insurance plans, and other relevant groups. Because of the rapid development and dissemination of new medical technology in Japan, evaluation has been ignored in ASSESSING MEDICAL TECHNOLOGY many instances or set aside for future action. Drugs and medical devices are cur- rently regulated in Japan under the Phar- maceutical Affairs Law passed in 1960. Whenever a new drug is proposed for mar- keting, data concerning its safety and effi- cacy must be submitted to the Bureau of Pharmaceutical Affairs. The Bureau of Pharmaceutical Affairs is assisted in imple- menting the Pharmaceutical Affairs Law by the Pharmaceutical Affairs Council, an advisory group with a number of commit- tees. These committees deal with such matters as the approval of manufacture and import of new drugs, the establish- ment of quality standards for medical de- vices, measures to ensure the safety of drugs, and review of drugs already on the market for safety and effectiveness. The Pharmaceutical Affairs Council makes rec- ommendations based on safety and effi- cacy, but final market approval is granted by the bureau. Evaluation of medical de- vices is based on an industrial standard law, largely focused on safety. However, escalating medical costs have led to greater interest in technology assessment for cost containment and cost-effectiveness. Controls on investment in health care and use of technologies appear to be much greater in a country such as Britain with a national health care system and strict budgetary control than in countries such as Japan or the United States with a system of fee for service. Setting of fees and condi- tions of reimbursement would provide lev- erage for influencing technology diffusion in a country such as Japan, but not in the United Kingdom where few physicians or hospitals are paid fees. Technology assess- ment in Britain can be most useful in aid- ing the regions or areas to make good resource allocations, and in Japan assess- ments may be most useful for setting reim- bursement schedules. Differences among health care systems, perspectives, etc., would make it unlikely that decisions about or assessments for spe-

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES cific allocation purposes would be easily transferable; nevertheless, safety and effi- cacy assessments used by national bodies for marketing approval of drugs and de- vices would be transferable. INTERNATIONAL ORGANIZATIONS What roles can international organiza- tions play in medical technology assess- ment? The following few categories give some indications of functions. International Pharmaceutical Firms Many companies have developed mar- kets and production facilities for drugs and devices that are worldwide. According to Fudenberg (1983) the ma- jor pharmaceutical firms in the United States spend about 5 to 10 percent of their total dollars on research. However current estimates range up to 12 percent (see Chap- ter 2~. More than 15 percent of U.S. drug industry R&D expenditures are made abroad. The amount of R&D money that U.S. firms are spending abroad is increas- ing at 20 percent a year and will exceed $500 million in 1983 (Standard & Poor's Corporation, 1983~. SmithKline Beckman markets about 15 prescription pharmaceutical products, ac- counting in 1982 for $1.34 billion in sales. Its cimetidine was the world's largest-sell- ing drug in 1983. Worldwide sales of ci- metidine amounted to $857 million in 1982, when U.S. sales were about $450 million. SmithKline Beckman had to de- velop the information needed to get cimeti- dine licensed in the various countries. Such multinational pharmaceutical companies can become well positioned to foster inter- national collaboration in assessing the safety and efficacy of drugs. International Health Information One of the largest repositories of bio- rnedical information useful for technology 239 assessment is the National Library of Medi- cine (NLM) of the U.S. National Institutes of Health. Since its inception in 1956, NLM activities have included acquiring and preserving information from around the world. Fully two-thirds of the journals cited in Index Medicus are published abroad. NLM currently has quid pro quo agreements with 13 countries and the Pan American Health Organization (Table 6-5) (OTA, 1982a). In exchange for indexing and other services, the foreign centers are allowed access to the MEDLARS (Medical Literature Analysis and Retrieval System, the NLM's computerized index of biomedi- cal publications) data base. Although MEDLARS provides a core of information useful for collaborative tech- nology assessment efforts among countries, it is not sufficient. MEDLARS is primarily oriented toward the information needs of U.S. biomedical communities and makes no selection of the substantive literature for technology assessment as such. The ability to access MEDLARS in Europe is growing because of the expansion in specialized data telecommunications networks, but there may be price barriers to access for the diverse users represented by the technology assessment community. Perhaps, as part of the regional network being set up by WHO described below, consideration could be given to a literature collection valuable for these endeavors. TABLE 6-5 MEDLARS Foreign Centers' Access to Tapes Tapes/Software On-Line NEM West Germany Japan Sweden United Kingdom Australia France South Africa Canada Pan American Health Mexico Organization Colombia Kuwait Italy Switzerland SOURCE: OTA, 1982a.

240 World Health Organization Network on Technology Assessment Increased interest in technology assess- ment has led the World Health Organiza- tion to establish a network for information exchange on technology assessment (U.S. DHHS, 1981; WHO, 1977~. The European Regional Office of WHO has: · a program on appropriate technology for health, including development of appropriate technology in laboratory services, radiology/radiotherapy/nuclear medicine, and biotechnology for health in member states; · a program to promote the develop- ment of standard health technologies and identify, develop, and promote models for the systematic development of all major health care programs at the national level, including introduction of new health care technologies; · a program to develop a health care technology assessment network, the hope being to link selected national institutes ca- pable of ensuring technical and economic assessments of new equipment and tech- nologies. As information is gathered it will be dis- seminated to member states. Six European countries have provisionally agreed to par- ticipate in the first phase of the assessment network. In November 1983 WHO held a meeting to permit member states to formulate guidelines for medical technology assess- ment and appropriate utilization (WHO, 1983~. Principles for drafting national guidelines were drawn up outlining possi- ble strategies such as research and develop- ment policies, assessment priorities and methodologies, market entry, and deploy- ment and use. Future programs will be held on economic incentives for the appro- priate and rational use of medical technol- ogies in different member states; coordina- ASSESSING MEDICAL TECHNOLOGY tion of national standards for health care facilities, equipment and procedures; tech- nology at the primary health care level; and geographic variation in use of health services. The establishment in 1984 of a new jour- nal, The International journal of Technol- ogy Assessment in Health Care (Reiser, 1983), is evidence of the interest and fer- ment around this topic. The journal's scope of interest is in the generation, assessment, diffusion, and use of health care technol- ogy. It will examine the effects of technol- ogy as perceived by policymakers, differ- ent academic disciplines, and different countries, and examine methods to con- duct studies and evaluations of technology. The journal will provide a vehicle for es- tablishing ties with scholars, governments, and private institutions concerned with health care technology, and facilitating outreach and interaction on matters of technology assessment. The journal may also play a key role in identifying the most useful literature for purposes of technology assessment. Also, plans are developing for the creation of a New International Society for Technology Assessment in Health Care, which is designed to facilitate the exchange of ideas on technology assessment. Postmarketing Surveillance of Drugs Postmarketing surveillance* of drugs may offer a special opportunity for inter- national collaboration. Postmarketir~o sur- veillance is generally used to determine a drug's beneficial and harmful effects, espe- cially over longer periods of observation than are used in premarketing clinical trials. It would provide information that could be transferred across national boundaries for regulatory purposes. The * The systematic collection and analysis of infor- mation from the normal therapeutic use of drugs, with the object of acquiring evidence on adverse ef- fects or other phenomena associated with their use.

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES accelerated discovery and development of new drugs and the crippling consequences of thalidomide use during pregnancy have focused world attention on drug safety and the significance of shared information. Benefits of such an international effort could be large (Finney, 1964~. The public would gain in protection and physicians might gain in assurance if decisions could be based on experience in more than one country. Manufacturers might economize and expedite new testing if certified evi- dence on the efficacy and safety of a drug in one country can be used in support of its introduction into another. Twenty-three countries participate in the World Health Organization's Program for International Monitoring of Adverse Reactions (OTA, 1982b). Each participat- ing country provides to WHO reports sum- marizing adverse drug reactions that oc- curred during the past year. The purpose of the WHO program is to increase the probability of detecting effects that might be overlooked by individual countries. However, the program does not appear to be widely used for regulatory purposes. Problems exist with the timeliness, reliabil- ity, and completeness of the information available. The use of the information is still in a rudimentary phase, and a good con- ceptual framework for its application and development is lacking. Nevertheless, the program could be de- veloped into a useful component for inter- national technology assessment of the safety and efficacy of drugs. New possibili- ties are opened by the capability of com- puterizing the system so that data can be entered promptly from one corner of the world and be accessible to others almost immediately. CONCLUSIONS AND RECOMMENDATIONS The information collected in the prepa- ration of this chapter prompts the study 241 committee to make the following recom- mendations (in italics). · International collaboration among the industrialized nations is necessary to the fullest establishment of a comprehen- s?ve system of medical technology assess- ment in any one of them. A first step should be collaboration in gathering data on such technologies and on research concerning their assessment. Developed countries increasingly are in- terested in technology assessment, particu- larly as related to devices, equipment, and medical practice. Such assessment typi- cally is hoped to help in improving patient care, controlling costs, and diffusion of ex- pensive technologies. As in the United States, many different groups and agencies in each country carry out and use the results of technology assessment. Most countries do not yet have a coordinated co- herent system for medical technology as- sessment, with one possible exception be- ing Sweden. Until coordinated systems are developed within countries, it will be very difficult if not impossible to develop any international system of medical technology assessment. However, most countries do appear to have a system for determining the safety and efficacy of drugs. Therefore, it is not surprising that more progress appears to have been made toward international col- laboration in the assessment of drugs than in the assessment of devices or medical practices. The presence of national organi- zations charged with drug evaluation pro- vides a focus for these activities and facili- tates international collaboration. The presence of formal mechanisms for assess- ment of drugs in the developed countries is evidence of international interest in tech- nology assessment that may be extended to devices and procedures. This shared inter- est may prompt standardization of meth- ods, data exchange, and other forms of collaboration especially if it leads to devel- opment of formal systems for such efforts.

242 Several international organizations, most particularly OECD and WHO, have made an important beginning to system- atic approaches to the international assess- ment of drugs. These efforts must continue to be supported by the governments of dif- ferent countries and by the pharmaceutical industry. Such programs may provide models for systematic collaborative efforts for assessing devices or medical proce- dures. · Aninternationalclearinghouse should be established to serve as an information pool of data gathered on medical technolo- gies and research concerning their assess- ment. Much can be done short of establish- ing an international system for technology assessment. An international clearinghouse for technology assessment would facilitate information dissemination, lessen duplica- tive efforts, and foster international collab- oration. The WHO network is a begin- ning. In the United States the proposed a a Institute of Medicine (1983) consortium re . whose primary function could be to act as a clearinghouse would be part of an inter- national clearinghouse for medical tech- nology assessment. Investigators from different countries al- ready collaborate in developing informa- tion for technology assessment. More sup- port should be made available to extend such research. For example, the Scandina- vian countries have excellent routine data collection that could be used to gather in- formation on safety and (in some cases) ef- ficacy. Some of this is done at present, but much more could be done. · An international clearinghouse should be established for information about clini- cal trials. A possible model is the British National Perinatal Epidemiology Unit at Oxford, which promotes clinical trials and conducts research on their effect on medi- cal practice. Much can be learned from other coun- tries' experience with medical technology ASSESSING MEDICAL TECHNOLOGY assessment. Although U.S. medical tech- nology assessment is methodologically ad- vanced, there is much to be learned about adoption of assessment findings by physi- cians and hospitals. In this respect, a Swedish experience with a hip joint consensus meeting may be illuminating. The consensus format ap- proach began in the United States at NIH, but it is was limited to considerations of safety and efficacy. In contrast, when the first European consensus meeting was held in 1982 in Sweden on hip surgery, costs and use were also on the agenda. In addition, there was extensive newspaper coverage throughout the country discussing the is- sues in lay terms, every medical opinion leader relevant to hip surgery attended the meeting (Sweden's population is eight mil- lion), and the jury panel included not only medical experts but politicians. The immediate result was a major reor- ganization of hip surgery in the Stockholm The U.S. Office for Medical Applica- tions of Research responsible for the con- sensus conferences is currently funding re- search both to formalize and improve the consensus process and to find out how to enhance their impacts. · Industrialized nations with compe- tence in medical technology assessment should work with less-developed countries to help them fill their special needs for in- formation. For example, fellowships to train individuals from less-developed countries in methods of technology assess- ment should be established in the United States and elsewhere. REFERENCES Aaron, H. J., and W. B. Schwartz. 1984. The Painful Prescription. Washington, D.C.: The Brook- ings Institution. American Institute of Biological Sciences. 1973. In- ternational Prospective for Biomedical Engineering, Workshop VI. 6-10 August. Dubrovnik, Yugoslavia.

MEDICAL TECHNOLOGY ASSESSMENT IN DEVELOPED COUNTRIES Coronary Artery Bypass Surgery: A Consensus. 1984. Lancet ii:l288. Council of Science and Society. 1983. Expensive Medical Techniques: Report of a Working Party. London: Calvert's Press. Department of Health and Human Services. 1982. Health-United States, 1982. Pub. No. (PHS) 83-1232. Washington, D.C.: Superintendent of Documents, U.S. Government Printing Office. ECRI. 1983. The U.S. and Canada: Technology's role in the problems of two health care systems. ECRI, p. 1-6. Finney, D. J. 1964. An international drug safe- guard plan. J. Chronic Dis. 17:565-581. Fudenberg, H. H. 1983. Basic biomedical re- search: A cost-benefit analysis. In Biomedical Institu- tions, Biomedical Funding, and Public Policy, H. H. Fudenberg, ed. New York: Plenum Press. Groot, L. M. J. 1982. Advanced and Expensive Medical Technology in the Member States of the Eu- ropean Community, Legislation, Policy and Costs. Commissioned by the European Community. Gross, F. 1980. Directions and Implications of Drug Legislation and Regulation in Europe and Con- straints on Progress in Drug Development. Rochester, N.Y.: Center for the Study of Drug Development. Institute of Medicine. 1983. Planning Study Re- port: A Consortium for Assessing Medical Technol- ogy. Washington, D.C.: National Academy Press. National Institutes of Health. 1982. Total hip-joint replacement in Sweden. J. Am. Med. Assoc. 248: 1822-1824. Office of Technology Assessment. 1980. The Impli- cations of Cost-Effectiveness Analysis of Medical Technology: The Management of Health Care Tech- nology in Ten Countries. Stock No. 052-003-00783-5. Washington, D.C.: Superintendent of Documents, U.S. Government Printing Office. Office of Technology Assessment. 1982a. Medlars and Health Information Policy. U.S. Congress. Stock No. 98-764. Washington, D.C.: Superintendent of Documents, U.S. Government Printing Office. Office of Technology Assessment. 1982b. Post- marketing Surveillance of Prescription Drugs. Stock No. 052-003-00839-9. Washington, D. C.: Superin- tendent of Documents, U.S. Government Printing Of- fice. Rasmussen, K. 1981. Chronic sinus node disease: Natural course and indication for pacing. Eur. Heart J. 2:455-459. Reiser, S. 1983. The International Journal of Tech- nology Assessment in Health Care. 243 Rogers, E. V., J. K. Larsen, and C. V. Lowe. 1982. The consensus development process for medical technologies: A cross-cultural comparison of Sweden and the United States. J. Am. Med. Assoc. 248:1880- 1882. Seizer, Z. 1983. Too many pacemakers. N. Engl. J. Med. 307:183-184. Shepard, D. S., and J. S. Durch. 1984. Interna- tional comparison of resource allocation in health sci- ences: An analysis of expenditures on biomedical re- search in 19 industrialized countries. Final Report to the Fogarty Center, National Institutes of Health Contract No. 263-83-C-0244. Boston, Mass.: Harvard School of Public Health. SPRI. 1981. What is SPRI? Stockholm, Sweden: SPRI, S-10254. SPRI. 1979. International Workshop on Evalua- tion of Medical Technology held Stockholm, Sweden, September 18-19, 1979. Stockholm, Sweden: SPRI, Fack, S-10250. SPRI. 1982. Consensus Development Statement: Total Hip Joint Replacement. Conference held May 12-14, 1982, Stockholm, Sweden. Standard and Poor's Corporation. 1983. Industry surveys, health care. Basic Analysis 151:H13-H35. Stocking, B., and B. Jennett. 1984. Consensus de- velopment conference: Coronary artery bypass sur- gery in Britain. Br. Med. J. 288:1712. U.S. Department of Health and Human Services. 1981. Assessment of Biomedical Technology in the Health Care Field: International Perspectives in Methodology, S. Perry, ed. Proceedings for a Joint Symposium held in Copenhagen, September 7-9, 1981. U.S. Department of Health and Human Services. 1982. Health United States, 1982. Washington, D.C. Weintraub, M. 1982. The French drug approval process. J. Clin. Pharmacol. 22:213-222. Wing, P. J. 1983. Why don't the British treat more patients with kidney failure? Br. Med. J. 287:1157- 1158. World Health Organization. 1977. Proceedings of the International Conference on the Role of the Indi- vidual and the Community in the Research, Develop- ment, and Use of Biologicals. Bull. W.H.O. 55(Suppl. 2): 1-177. World Health Organization. 1983. Summary Re- port: Consultation on National Guidelines for Medi- cal Technology Assessment and Appropriate Utiliza- tion. Based on a meeting held in Brussels, November 2-4, 1983.

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New drugs, new devices, improved surgical techniques, and innovative diagnostic procedures and equipment emerge rapidly. But development of these technologies has outpaced evaluation of their safety, efficacy, cost-effectiveness, and ethical and social consequences. This volume, which is "strongly recommended" by The New England Journal of Medicine "to all those interested in the future of the practice of medicine," examines how new discoveries can be translated into better care, and how the current system's inefficiencies prevent effective health care delivery. In addition, the book offers detailed profiles of 20 organizations currently involved in medical technology assessment, and proposes ways to organize U.S. efforts and create a coordinated national system for evaluating new medical treatments and technology.

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