B (3:10)

Exactly.

A (3:11)

How does one overcome that?

B (3:13)

Well, I think you have to take a marginal approach. We're not going to have a revolution in health systems overnight. But, but the idea is governments are spending more and more every day in developing countries. So it's with that next dollar that they start to think about their investments in a way that's informed by the best evidence on impact and the best evidence on cost.

A (3:31)

So those who are currently getting to get on planes and go off for their cancer treatments, probably that number is unlikely to be coming down. But the future spending, the additional spending would be allocated in a more rational way.

B (3:45)

That's right. I mean, ideally we would also take a look at these really egregious inequities in the system and deal with that as well. And certainly since the fall of the dictatorship in Egypt, we would hope to see less of this kind of allocation going forward. But you know, really, I think realistically you have to think about the next dollar rather than making big shifts in current spending because you have a health system that's there, that's operating already.

A (4:09)

So we were talking before the show began about this international decision support initiative. You mentioned that the supporters include the Gates foundation, the UK Department for International Development, and you also told me the Rockefeller foundation, is that right?

B (4:24)

That's right.

A (4:25)

It's just $3 million. Just to put this in context, global official development assistance is about 125 billion, of which roughly 30%. So let's say somewhere around 30, $40 billion just of donor money, plus many billions of dollars of country's own money is going into health care. Is a $3 million allocation into a decision making, priority setting mechanism going to be the tiny tail that wags the dinosaur?

B (4:54)

Well, I mean, I think first we have to see developing country governments are the ones really in charge in the global health space. Right. They are the ones that are spending the most. So what really matters is actually what governments themselves do in terms of prioritizing their spending going forward. And obviously $3 million is not a lot, but the idea is in this initial phase to show proof of concept, to show that institutions can be built in a very small number of countries that have the willingness to prioritize going forward according to value for money criteria and other criteria. And then perhaps in the next phase we'd hope to see more funding going towards this kind of activity.

A (5:34)

I can imagine if I'm the Minister of Health in, you know, pick a country Minister of Health in Uruguay, that it might be quite useful if there were some regional or international body that said these are the things that we reckon are good value for money and you ought to cover these before you do the other stuff. That would make it a lot easier for me to argue for an efficient allocation of funds than if I'm trying to figure it out all myself. Is that kind of what's going on?

B (6:02)

Well, that is what's going on. And that's why NICE International exists, because country governments were already using NICE's clinical care guidelines, their recommendations on coverage of different kinds of medicines. But the really important difference is that the UK spends a lot more on health and has a much larger economy than some of these other countries. So the decisions are much more difficult in low and middle income countries. And they really can't rely on what NICE puts out there because as I was saying, the budget constraint is really different. So they really do have to prioritize with a very restricted set of resources. And to give you an example, like a common breast cancer drug called Trastuzumab, this is recommended, it's on the essential medicines list at the who. It's something that is considered highly cost effective. But the difference in affordability that it represents for Bolivia versus the United States is just a huge order of magnitude. It's 38 times a GDP per capita in Bolivia. It's less than half of one GDP per capita in the United States. This is for a quality adjusted life year associated with that medicine. So it just gives you a sense of what it represents to adopt that drug for treatment. Right.

A (7:15)

So I'm imagining you might have a range of priorities that would say if you are currently spending X per capita for health, this could be in your essential package. And as your economy grows or resources become available for the outside and your spending increases, more things would go into that package. So it's not to say that same package for everybody, but it's based on the availability of resources. And if money grew on trees, we would all get state of the art treatment for everything.

B (7:44)

Exactly. So it's a gradual process. And the global health community has since 1993, the World Development Report that the World bank put out talked about a cost effective package of services. But the problem was that first it doesn't recognize that there's some existing distribution of spending at countries that cannot necessarily be reallocated to these cost effective services. So it's really a more gradual process and it's a permanent process. Right. Because there are new technologies coming out every day that might represent better value for money than the status quo. So it's really a function that has to exist. The development of this package, the adjustment of this package, the evaluation of the package as well, working to improve health the way that we believe it's something that has to be done over time on a permanent basis. And that's why it's great to have this new initiative that's helping to strengthen the institutions that exist in countries to do this job.

A (8:34)

We're going to take a quick break. When we come back, I'm going to ask you to stretch a little bit. And for those of us who are Americans and watching the unfolding of health care reform in this country, see if there are any lessons to be drawn either from north to south or perhaps from south to north. This is the Global Prosperity Wonkcast from the center for Global Development. My guest today is Amanda Glassman and we're talking about about priority setting for healthcare spending in the international arena. We will be back in a moment. Welcome back to the Global Prosperity wonkast. I'm Lawrence MacDonald. I'm speaking with Amanda Glassman, senior fellow here at the center for Global Development, about a recent announcement that A group of three funders, the Bill and Melinda Gates foundation, the UK aid agency and the Rockefeller foundation have put 3 million, which sounds like a lot to me, but in the grand scheme of things is a tiny little amount into a new international initiative, the International Decision Support Initiative, which is going to offer guidance to countries in terms of allocating their public health doll to get the most bang for the buck. Amanda, I feel like we can't have this conversation, and I know you're going to wince, but we can't have this conversation without saying the words. Death panels. Is nice a death panel?

B (10:05)

No, not at all. I mean, first of all, it's a life panel. That's what I think. I think it's more about saying where can we use our public money to get the most health for the spending that we have? That's what nice is about. And that's what this process do.

A (10:23)

They call it nice because these people are really nice.

B (10:24)

They are really nice.

A (10:26)

Does it stand for something? Tell us what it stands for.

B (10:28)

National Institute for Health and Clinical Excellence.

A (10:30)

National Institute for Health and Clinical Excellence.

B (10:32)

Health and Care Excellence. Actually, they just changed it, but.

A (10:35)

National Institute for Health and Care Excellence. But the word that interests me there is excellence. It's the idea that the best available treatments should be available. You know, within the amount of money that's available, you should choose the ones that are going to make a real difference in people's lives.

B (10:50)

That's right. That's a good thing. It's nice.

A (10:54)

Earlier, when you were working on the CGD report that helped to underpin this announcement by the three funders, and I have the title right here, it is priority setting in Health. You've been a consistent advocate for more rational setting of priorities in public health spending. There was an announcement that that was similar to the one we have now, but it focused primarily on Latin America. What was that all about?

B (11:18)

The Pan American Health Organization has set up a network of organizations that are looking at value for money issues in healthcare spending. And they are working together to try and use these same kinds of tools, cost effectiveness analysis, to decide on whether new medicines and technologies are included on a list for public speakers spending or excluded because it's not good enough value for money. And one of the interesting things that that network has been doing recently is trying to use the results of those analyses to inform price negotiations with companies. So in other words, a new technology might not be cost effective at one price, but at a certain price it does become cost effective and it does become affordable. So doing these kinds of analyses can also help countries negotiate better with manufacturers.

A (12:06)

So the manufacturer then has an incentive to bring the price down to meet a price point where it does become cost effective.

B (12:12)

That's right. And also to think about cost effectiveness during the development of the drugs and devices as well, which is a really important thing. So if you know that a technology that is cost effective at a certain, you know, price per quality, adjusted life year purchased, then you have an incentive to create a product that fits that profile rather than some other profile. I try and charge as much as I possibly can, so that's a really good development, I think.

A (12:40)

So if I'm a pharma executive and I'm making a choice between a small, high priced market in a larger, lower priced market, presumably a lot of things go into that decision, profitability being at the top of the list. But if that larger, lower price per unit market looks like it might be available, I'm going to be a lot more inclined to try and go after it.

B (13:02)

I think that's the idea. Right. And part of the problem has been that purchasing was really fragmented in some countries or it wasn't large scale enough, or the duration of the contracts wasn't long enough. So now countries starting to get their acts together, they're offering longer term contracts, they're being more precise about the kinds of demands that they have. So that also helps them get better prices. And armed with this kind of result from cost effectiveness analyses, they can really offer better terms to manufacturers as well. So hopefully it's win, win for everyone.

A (13:30)

Is this the sort of thing that you expect the International Decision Support Initiative, the IDSI, to begin doing?

B (13:38)

Well, I think they're really focused right now on what do we know about how to run a good process to develop cost effectiveness evidence and to use that evidence in decision making. Probably further down the road they'll focus on this kind of purchasing aspect that comes into play, but right now they're more focused on the upstream portion.

A (13:56)

One of the things that interested me about your report on priority setting is that you left space in it for a public consultation process. So it wouldn't entirely be driven by the numbers. And so, for example, if a society determined that an intervention to save the life of a child, while it might be not a good buy in terms of disability adjusted life years because it's expensive, the fact that that person is seen as innocent would make it a higher public priority than a similar intervention to save the life of 20.

B (14:28)

Something that's really important. I mean, these kinds of mechanisms are not to only use cost effectiveness evidence, though ideally that plays some role, but also to make explicit other values societies have. One of them could be always treating childhood illnesses first. Or in other societies like Japan, they actually value older people more. So maybe they would give more weight to the two interventions that would really improve quality of life for the elderly. So every society has different values and views on these kinds of things. The point is to have a process and rules of the game that allow all kinds of considerations to be brought out, to be discussed in a transparent way, in an evidence based way, and to come to some decision in that way, rather than relying on sort of ad hoc inertial historical budgets or I have a friend who this worked for.

A (15:17)

I'll just buy that that then doesn't come without some risk. I imagine it opens the door for, you know, Egypt putting people on planes and sending them overseas for treatment when one out of five kids is stunted.

B (15:31)

Yeah, I mean, I think the important thing is to have voice at the table to represent these different constituencies in society. And certainly government has a really important role in prioritizing those that don't have a voice in the political process because that's how we ended up in the place we were before. But you know, we're presuming that governments also want to serve the public good, not just specific constituencies. So, you know, the process has to be in place, the stakeholders involved that make sure that all, you know, the people without a voice actually get a seat at the table and have a chance to opine.

A (16:02)

Here in the US in the development community, we're accustomed to looking across the pond, as they say, looking to the UK with envy. And a lot of our envy is directed at the Department for International Development, dfid, which does a terrific job on many things. Hearing about this, I sort of assumed, oh well, this is another good thing that DFID has done. But it's not so simple as that. This is coming out of a different UK government agency. Nice.

B (16:26)

Right, right. I mean, NICE is an autonomous agency operating under the Department of Health. But they just had so many demands from other country governments for cooperation that this has just evolved naturally. And what's so great about this new initiative is that it's a sort of the first modestly scaled partnership between DFID and nice. And I hope it just grows further.

A (16:48)

I guess for those of us who are Americans, this would be like the CDC center for Disease Control, which is primarily for Americans, but it winds up having a big international arm and people look to it for technical support on a whole range of diseases around the world.

B (17:01)

Exactly. It's exactly equivalent to that. And it's true that CDC has a large set of international activities now for the same reason. Reason.

A (17:09)

Can you imagine a situation where the United States would become a supporter of the International Decision Support Initiative?

B (17:18)

Well, I would certainly hope so. I think officials at USAID talk a lot these days about how important health systems are for delivering health improvements. But those health improvements can really only be delivered if we are actually delivering the services that are going to make a big difference for health. So I could easily see a USAID providing some support for this as well.

A (17:40)

We've seen some progress on this. It's very exciting. I know you're proud. The work of you and your colleagues, the members of the working group has contributed to this. Cast your mind ahead two, three, four, five years from now. What would you like to see in this realm?

B (17:55)

Well, I think I'd like to see even more governments in developing countries with institutions stood up and functioning to help define health benefits plans in the context of universal health coverage. So right now we have places like Thailand, Chile, Colombia, Mexico, Ghana, South Africa starting to use these, starting to have a team of people that do this as their full time job. So I hope we're going to see more countries like that I hope that we're learning a lot from what they're doing and I hope that the IDSI is supporting their efforts and broadening access to to the know how and information and legislation and communication that's around these issues going forward.

A (18:36)

Is there something more that the center for Global Development will be doing in this space? I mean, we, I think laid out a lot of the analytics. The announcement of the IDSI cited our work. It's very gratifying for us. Are we kind of done, you know, move on to the next thing or is there still more that a think tank like ours can contribute?

B (18:52)

I think we do need to continue to engage on this issue to illustrate why it matters for global health donors and for developing country governments. So I think we have a role there. And I also will probably undertake some additional work that will look at how to design and adjust benefits plans in the context of universal health coverage. Like what could we learn across countries? What could we learn even from the United States where we have a new essential health benefits plan that hasn't worked out so well in implementation.

A (19:22)

For my part, it's going to take more than just priority setting and health. But I'm struck by that one out of five Egyptian kids who stunted and the wealthy, well connected people getting on planes at government expense. If there's a day when we can fix that, that would be very good too.

B (19:38)

We're working on it. Thanks, Lawrence.

A (19:40)

This has been the Global Prosperity Wonkast from the center for Global Development. My guest today is Amanda Glassman and we've been discussing the announcement of the creation of the International Decision Support Initiative which is going to provide support to countries in making more rational and efficient allocations of their spending on health. You can find the Wonkast online on itunes and on stitcher. Just search for Wonkast or CGD and please sign up to hear a new interview every week. Until next time, I'm Lawrence MacDonald. Thank you for listening, Sam.