L. Innovation and HTA

Innovation generally refers to creation or development of something that is new or different. It is something that addresses the demand of, is accepted or adopted by, or is otherwise beneficial to users or markets. Innovations usually are in some way claimed to be more effective or otherwise better than existing technologies, thereby offering a meaningful desirable change. In health care and other fields, meaningful change is true (i.e., statistically significant) and of practical importance (i.e., clinically significant). To be successful in a market, innovation must be replicable at an acceptable cost.

Innovation in health care shares attributes of other fields. Examples of such attributes include: better (more effective), safer, faster, cheaper, easier to use, smaller, portable, more standardized, more reliable, and more environmentally friendly (“greener”). In recent years, such attributes as targeted, personalized, less-invasive, and secure (or confidential) have been increasingly sought in health care. HTA can account for all of these attributes of innovation. In particular, though, as a form of inquiry intended to support decision making and policymaking, HTA is especially oriented toward discerning improvements in health care outcomes, i.e., “better” and “safer.” Also, where decision makers and policymakers seek such information, HTA is oriented toward meaningful improvements in health care outcomes per incremental health expenditure. (In some decision-making contexts, the inverse is of interest, i.e., whether the cost per incremental improvement in health outcomes is acceptable.) In health care, this is innovation of value (Porter 2010).

Certainly, HTA is subject to ongoing controversy pertaining to the relative value of investing in socially desirable goals when resources are scarce. For example, a goal of allocating resources efficiently for the broad population may compete with the goal of allocating resources for those who are most severely affected by ill health. Such tradeoffs or conflicting goals can affect what is considered to be innovation of value. The value of innovation may be considered to extend beyond health care impacts to sustaining the progress of science and technology and to employment, balance of trade, and other economic attributes. These issues pertaining to the value of innovation have arisen in various national HTA programs, such as for NICE in the UK (Green 2010, Kennedy 2009).

HTA could be viewed as yet another hurdle for innovation, beyond proof-of-concept, regulatory approval, and coverage (based merely on whether a technology qualifies as a covered benefit). Indeed, “new or different” may suffice for those hurdles without HTA; in most major regulatory schemes, a new technology can be approved or cleared for market as long as it functions as labeled, or is efficacious at an acceptable level of safety for a particular patient population, without regard to “value.” When HTA inquires about tradeoffs of health outcomes and costs, it supports alignment of payment with innovation of value. Further, it sends signals that may help to improve the efficiency of innovation by focusing efforts on developing and validating innovations that will be valued by purchasers on behalf of clinicians, patients, and provider institutions. This emphasis is shifting the direction of innovation, including diminishing or eliminating development with little prospect of value as well as creating new opportunities. Some technologies that would have been “innovative” may no longer be developed because they will not provide sufficient value; their reimbursement outlook will not justify further investment. At the same time, the ability to demonstrate comparative effectiveness at a lower cost or superiority at an acceptably higher cost can confer market advantages. As the “blockbuster” model of drugs and other technologies for broad populations (e.g., statins for lowering blood cholesterol and certain antidepressants) fades, there are opportunities to develop technologies targeted to patient subgroups (e.g., identified using genomics) that may merit high prices.

Some innovations are “disruptive.” Disruptive innovations alter and even displace existing systems, networks, or markets, and may create new business models and lead to emergence of new markets (Bower 1995). The disruption may not be inherent in a new technology itself, but in how it is marketed. Examples in health care are: diagnostic imaging replacing exploratory surgery, ultrasound replacing certain x-ray imaging, percutaneous coronary interventions substituting for some coronary artery bypass graft surgeries, and gene therapy substituting for some pharmaceutical or biological therapies (Wilson 2012). Disruptive innovations can present challenges to existing systems of regulation, payment, health care delivery, and professional training. Consistent with the original scope of technology assessment to consider the broad array of potential impacts of technology, HTA should consider not just whether a new technology is safe, effective, or cost-effective, but how its adoption might affect systems of care; where, how, and by whom care is delivered; and what direct and indirect effects it may have on patients, at-risk populations, use of other technologies, access to care, and broader societal impacts.

Various forms of process innovation in clinical trials, such as adaptive and Bayesian trial designs, and in manufacturing technologies also contribute to value by increasing standardization, improving product quality, and lowering production costs. As health technology companies and other innovators better perceive the need to demonstrate the value of their innovations for regulators, payers, clinicians, and other gatekeepers, some are reorganizing and better integrating their technology R&D, validation, and commercialization functions accordingly.