What is a cost-minimisation analysis?

Depending on the source, a cost-minimisation analysis can be considered a simplified cost-effectiveness analysis or an entirely separate type of economic evaluation. Based on its process and methods guidance, NICE classifies a cost-minimisation analysis as a standalone analysis and considers it to be “the simplest form of economic analysis”. As a reminder, economic evaluation, is the comparative assessment of alternative options based on the analysis of the differing costs and consequences in the utilisation of two or more health technologies. It is advised that a cost-minimisation analysis is appropriate where health effects/consequences are determined to be the same as another intervention e.g. current standard of care. In this case, if the overall cost of administering the intervention is lower than the comparator intervention, the intervention of interest is considered cost-effective.

The benefit of using a cost-minimisation analysis is thought to be the provision of a simpler and quicker analysis versus other methodologies. The key factor in deciding whether the use of a cost-minimisation analysis is appropriate is the assumption that each intervention is equally effective. This assumption cannot be made often (an example would be where interventions come from the same drug class) and when it has, this has been an area of debate and argued that the assumption has been based upon incorrect interpretation of results and ignores uncertainty. Despite this debate, recent examples can be observed where recommendations for the use of an intervention have been supported by a cost-minimisation analysis; these decisions have been based upon evidence review groups, clinicians and committees considering different interventions to be clinically equivalent. Where equivalence has been determined, NICE are not alone in the use of cost-minimisation analyses, with other HTA agencies around the world adopting a similar approach.

To support decision-making, and help the development of economic evaluation and HTA submissions, the NICE decision support unit at ScHARR published a report providing recommendations for the use of cost-minimisation analysis. In doing so, the report reviewed how cost minimisation analyses are used, whether approaches are consistent and if not, were any differences appropriate. The recommendations were divided between both clinical effectiveness and assessment of costs.

Regarding clinical effectiveness, the report highlights:

• The need for consistency across different programmes, with merits for this type of evaluation being assessed when the decision to use a cost-minimisation analysis is made and during deliberation at committee stage.
• Factors such as the plausibility of the clinical equivalence should be evaluated based on the mechanism of an agent and how this could translate into a health outcome.
• Adverse event profiles should be considered as significantly different profiles will invalidate eligibility to be considered equivalent.
• Assessment of equivalence should take into consideration sample sizes, and statistical and clinical equivalence (including non-inferiority) across different outcomes, especially those that would be considered as part of an economic model.

Regarding the assessment of costs, the report highlights:

• Where non-inferiority is used for the basis of ‘equivalence’  there should be no margin for mean cost to be greater than for the identified comparator.
• If there are claims of differences in clinical benefit, estimates for resource utilisation and unit costs, as well as any associated uncertainty should be assessed.
• Probabilistic sensitivity analysis can be useful when sampling uncertainty for key parameters is the primary source of uncertainty.

In summary, cost-minimisation analysis potentially provides a simple and quick method of economic evaluation, where clinical equivalence can be determined. Clinical equivalence however is uncommon and when this has supported the use of cost-minimisation analysis, the decision has been subject to debate. To support the use of cost-minimisation, the NICE decision support unit has produced recommendations that should be considered.

1. Briggs, A., Schulpher, M., & Claxton, K. (2006). Decision modelling for health economic evaluation. Oxford University Press.
2. Drummond, M., Sculpher, M.J., Claxton, K., Stoddart, G., Torrance, G., 2015. Methods for the economic evaluation of health care programmes, Forth. ed. Oxford University Press.
3. Wailoo, A & Dixon, S. 2019 The use of cost minimisation analysis for the appraisal of health technologis. NICE Decision Support Unit, ScHARR, University of Sheffield
4. NICE 2024. Developing NICE guidelines: the manual. NICE process & methods pmg20.