Benefit-And-Cost Analysis of Medical

Interventions: The Case of Cimetidine and

Peptic Ulcer Disease

September 1981

NTIS order #PB82-118910
LIBRARY

OFFICE OF TECHNOLOGY ASSESSMENT CASE STUDY #11

THE IMPLICATIONS OF

COST-EFFECTIVENESS

ANALYSIS OF

MEDICAL TECHNOLOGY

SEPTEMBER 1981

BACKGROUND PAPER #2: CASE STUDIES OF

MEDICAL TECHNOLOGIES

CASE STUDY #n: BENEFIT-AND-COST ANALYSIS OF

MEDICAL INTERVENTIONS: THE CASE OF CIMETIDINE

AND PEPTIC ULCER DISEASE

Harvey V. Fineberg, M. D., Ph. D.

Associate Professor

and

Laurie A. Pearlman, A. B.

Research Analyst

Harvard School of Public Health, Boston, Mass.

OTA Background Papers are documents that contain information believed to be

useful to various parties. The information under-girds formal OTA assessments or is

an outcome of internal exploratory planning and evaluation. The material is usually

not of immediate policy interest such as is contained in an OTA Report or Technical

Memorandum, nor does it present options for Congress to consider.

CONGRESS OF THE UNITED STATES

Office of Technology Assessment

Washington D C 20510
Library of Congress Catalog Card Number 80-600161

For sale by the Superintendent of Documents,

U.S. Government Printing Office, Washington, D.C. 20402
Foreword

This case study is one of 17 studies comprising Background Paper #2 for OTA’s

assessment, The implications of Cost-Effectiveness A Analysis of Medical Technology.

That assessment analyzes the feasibility, implications, and value of using cost-effectiveness and cost-benefit analysis (CEA/CBA) in health care decisionmaking. The major, policy-oriented report of the assessment was published in August 1980. In addition

to Background Paper #2, there are four other background papers being published in

conjunction with the assessment: 1 ) a document which addresses methodological

issues and reviews the CEA/CBA literature, published in September 1980; 2 ) a case

study of the efficacy and cost-effectiveness of psychotherapy, published in October

1980; 3 ) a case study of four-common diagnostic X-ray procedures, to be published in

summer 198 1; and 4 ) a review of international experience in managing medical technology, published in October 1980. Another related report was published in

September of 1979: A Review of Selected Federal Vaccine and Immunization Policies.

The case studies in Background Paper #2: Case Studies of Medical Technologies

a r-e being published individually. They were commissioned by OTA both to provide

information on the specific technologies and to gain lessons that could be applied to

the broader policy aspects of the use of CEA/CBA. Several of the studies were specifically requested by the Senate Committee on Finance.

Drafts of each case study were reviewed by OTA staff; by members of the advisory panel to the overall assessment, chaired by Dr. John Hogness; by members of

the Health Program Advisory Committee, chaired by Dr. Frederick Robbins; and by

numerous other experts i n clinical medicine, health policy, Government, and economics. We are grateful for their assistance. However, responsibility for the case studies remains with the authors.

Director

Ill
Advisory Panel on The Implications of

Cost-Effectiveness Analysis of Medical Technology

John R. Hogness, Panel Chairman

President, Association of Academic Health Centers

Stuart H. Altman

Dean

Florence Heller SChool

Brandeis University

Sheldon Leonard

Manager

Regulatory Affairs

General Electric Co.

Barbara J. McNeil

Department of Radiology

Peter Bent Brigham Hospital

Robert H. Moser

Executive Vice President

American College of Physicians

Frederick Mosteller

Chairman

Department of Biostatistics

Harvard University

Robert M. Sigmond

Advisor on Hospital Affairs

Blue Cross and Blue Shield Associations

Jane Sisk Willems

VA Scholar

Veterans Administration
OTA Staff for Background Paper #2

Joyce C. Lashof, Assistant Director, OTA

Health and Life Sciences Division

H. David Banta, Health Program Manager

Clyde J. Behney, Project Director

Kerry Britten Kemp, * Editor

Virginia Cwalina, Research Assistant

Shirley Ann Gayheart, Secretary

Nancy L. Kenney, Secretary

Martha Finney, * Assistant Editor

Other Contributing Staff

Bryan R. Luce Lawrence Miike Michael A. Riddiough

Leonard Saxe Chester Strobe]*

OTA Publishing Staff

John C. Holmes, Publishing Officer

John Bergling Kathie S. Boss Debra M. Datcher Joe Henson

● OTA contract personnel.
Preface

This case study is one of 17 that comprise

Background Paper #2 to the OTA project on the

lmplications of Cost-Effectiveness Analysis of

Medical Technology.* The overall project was

requested by the Senate Committee on Labor

and Human Resources. In all, 19 case studies of

technological applications were commissioned

as part of that project. Three of the 19 were specifically requested by the Senate Committee on

Finance: psychotherapy, which was issued separately as Background Paper #3; diagnostic Xray, which will be issued as Background Paper

#.5; and respiratory therapies, which will be included as part of this series. The other 16 case

studies were selected by OTA staff.

In order to select those 16 case studies, OTA,

in consultation with the advisory panel to the

overall project, developed a set of selection

criteria. Those criteria were designed to ensure

that

●

●

●

●

●

●

●

as a group the case studies would provide:

examples of types of technologies by function (preventive, diagnostic, therapeutic,

and rehabilitative);

examples of types of technologies by physical nature (drugs, devices, and procedures);

examples of technologies in different stages

of development and diffusion (new, emerging

, and established);

examples from different areas of medicine

(such as general medical practice, pediatrics, radiology, and surgery);

examples addressing medical problems that

are important because of their high frequency or significant impacts (such as

Cost );

examples of technologies with associated

high costs either because of high volume

(for low-cost technologies) or high individual costs;

examples that could provide informative

material relating to the broader policy and

methodological issues of cost-effectiveness

or cost-benefit analysis (CEA/CBA); and

● examples with sufficient evaluable literature.

On the basis of these criteria and recommendations by panel members and other experts,

OTA staff selected the other case studies. These

16 plus the respiratory therapy case study requested by the Finance Committee make up the

17 studies in this background paper.

All case studies were commissioned by OTA

and performed under contract by experts in academia. They are authored studies. OTA subjected each case study to an extensive review

process. Initial drafts of cases were reviewed by

OTA staff and by members of the advisory

panel to the project. Comments were provided

to authors, along with OTA’s suggestions for

revisions. Subsequent drafts were sent by OTA

to numerous experts for review and comment.

Each case was seen by at least 20, and some by

40 or more, outside reviewers. These reviewers

were from relevant Government agencies, professional societies, consumer and public interest

groups, medical practice, and academic medicine. Academicians such as economists and decision analysts also reviewed the cases. In all,

over 400 separate individuals or organizations

reviewed one or more case studies. Although all

these reviewers cannot be acknowledged individually, OTA is very grateful for their comments and advice. In addition, the authors of

the case studies themselves often sent drafts to

reviewers and incorporated their comments.
The case studies were selected and designed to

fulfill two functions. The first, and primary,

purpose was to provide OTA with specific information that could be used in formulating

general conclusions regarding the feasibility and

implications of applying CEA/CBA in health

care. By examining the 19 cases as a group and

looking for common problems or strengths in

the techniques of CEA/CBA, OTA was able to

better analyze the potential contribution that

these techniques might make to the management

of medical technologies and health care costs

and quality. The second function of the cases

was to provide useful information on the specific technologies covered. However, this was

not the major intent of the cases, and

Some of the case studies are formal CEAS or

CBAs; most are not. Some are primarily concerned with analysis of costs; others are more

concerned with analysis of efficacy or effectiveness. Some, such as the study on end-stage

renal disease, examine the role that formal

analysis of costs and benefits can play in policy

formulation. Others, such as the one on breast

cancer surgery, illustrate how influences other

than costs can determine the patterns of use of a

technology. In other words, each looks at evaluation of the costs and the benefits of medical

technologies from a slightly different perspective. The reader is encouraged to read this study

in the context of the overall assessment’s objectives in order to gain a feeling for the potential

role that CEA/CBA can or cannot play in health

care and to better understand the difficulties and

complexities involved in applying CEA/CBA to

specific medical technologies.

The 17 case studies comprising Background

Paper #2 (short titles) and their authors are:

Artificial Heart: Deborah P. Lubeck and John P.

Bunker

Automated Multichannel Chemistry Analyzers:

Milton C. Weinstein and Laurie A. Pearlman

Bone Marrow Transplants: Stuart O. Schweitzer and C. C. Scalzi

Breast Cancer Surgery: Karen Schachter and

Duncan Neuhauser

Cardiac Radionuclide Imaging: William B.

Stason and Eric Fortess

Cervical Cancer Screening: Bryan R. Luce

Colon Cancer Screening: David M. Eddy”’

CT Scanning: Judith L. Wagner

Elective Hysterectomy: Carol Korenbrot, Ann

B. Flood, Michael Higgins,” Noralou RO OS,

and John P. Bunker

End-Stage Renal Disease: Richard A. Rettig

Gastrointestinal Endoscopy: Jonathan A. Showstack and Steven A. Schroeder

Neonatal Intensive Care: Peter Budetti, Peggy

McManus, Nancy Barrand, and Lu Ann

Heinen

Nurse Practitioners: Lauren LeRoy and Sharon

Solkowitz

Orthopedic Joint Prosthetic Implants: Judith D.

Bentkover and Philip G. Drew

Periodontal Disease Interventions: Richard M.

Scheffler and Sheldon Rovin

Selected Respiratory Therapies: Richard M.

Scheffler and Morgan Delaney

These studies will be available for sale by the

Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402.

Call OTA’s Publishing Office (224-8996) for

availability and ordering information.
Case Study #11

Benefit-and-Cost Analysis of

Medical Interventions: The Case of

Cimetidine and Peptic Ulcer Disease

Harvey V. Fineberg, M. D., Ph.D.

Associate Professor

and

Laurie A. Pearlman, A.B.

Research Analyst

Harvard School of Public Health

Boston, Mass.

AUTHORS’ ACKNOWLEDGMENTS

A number of people aided us at various stages in the preparation of this report.

For their valuable advice, we would like to thank Dr. Morton I, Grossman, Center for

Ulcer Research and Education, Veterans Administration Center, Los Angeles; Dr.

Thomas P. Al my, Dartmouth Medical School; Dr. Marvin H. Sleisenger, VA Hospital

Medical Service, San Francisco; Dr. Benjamin A. Barnes, Center for the Analysis of

Health Practices, Harvard School of Public Health; Dr. Janet Elashoff, Center for

Ulcer Research and Education, VA Center, LOS Angeles; Dr. Morton Paterson, SmithKline Corp.; Dr. Morris Olitsky, Robinson Associates, Inc.; Dr. George von Haunalter, Dr. Virginia Chandler, Stanford Research Institute; Dr. Richard Monson, Harvard School of Public Health; and Dr. Murray C. Wylie, University of Michigan

School of Public Health. Dr. Grossman also kindly shared with us a manuscript in

press. Several researchers described to us their work in progress. We are especially

grateful to Dr. Wylie and to Dr. ]ohn F. Geweke of the University of

partment of Economics. We thank Dr. Leighton Read of the Center for

Health Practices for introducing us to useful literature on ulcer disease.

We also appreciate the cooperation of Mr. Charles Dennison, Mr.

berg, and Ms. Ethel Black of the National Center for Health Statistics,

Wisconsin Dethe Analysis of

Donald Greenwho promptly

responded to our numerous requests for information. Dr. Joan Standard of the Food

and Drug Administration was also very helpful.

By naming people who have advised and assisted us, we do not mean to shift

responsibility for any errors or misinterpretations that may appear in this case study.
Contents

Page

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . 3

The Benefit-and-Cost Model for Medical

Interventions. ..,.... . . . . . . . . . . . . . . . . . 3

Peptic Ulcer Disease. . . . . . . . . . . . . . . . . . . . . 4

Cimetidine. . . . . . . . . . . . . . . . . . . . . . . . . . . 4

The Benefit-and-Cost Model Applied to

Cimetidine. . . . . . . . . . . . . . . . . . . . . . . . . . 5

Review of Benefit-and-Cost Analyses of

Cimetidine. . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Suggestions for Further Research . . . . . . . . . . . 6

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The Benefit-and-Cost Model for Medical

Interventions . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Peptic Ulcer Disease . . . . . . . . . . . . . . . . . . . . . . 10

Definition and Etiology . . . . . . . . . . . . . . . . . . 10

Symptoms and Diagnosis . . . . . . . . . . . . . . . . 11

Treatment and Natural History . . . . . . . . . . . . 11

Epidemiologic Patterns . . . . . . . . . . . . . . . . . . 13

Cost of Illness . . . . . . . . . . . . . . . . . . . . . . . . . 18

Summary . . . . . . . . . . . . . ........ . . . . . . 22

Cimetidine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Physiologic Rationale and Development . . . . . 23

Diffusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

The Benefit-and-Cost Model Applied to

Cimetidine . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Elements in the Analysis . . . . . . . . . . . . . . . . . 25

Clinical Effects . . . . . . . . . . . . . . . . . . . . . . . . . 26

Health System Effects . . . . . . . . . . . . . . . . . . . 39

Outcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Review of Benefit-and-CostAnalyses of

Cimetidine . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Available Analyses . . . . . . ........ . . . . . . 49

The Study by Robinson Associates, Inc. . . . . . 49

Guidelines for Review of Health Care

Cost Analyses . . . . . . . . . . . . . . . . . . . . . . . 57

Suggestions for Further Research. . . . . . . . . . . . . 58

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

LIST OF TABLES

Table No. Page

1. Selected Contemporary Interventions

Used in Peptic Ulcer Disease . . . . . . . . . . . . . 7

2. Number of Deaths in the United States With

Ulcer Disease as the Primary Cause, 1960-79. 15

3. Mortality Rates in the United States for

Deaths Due to Ulcer Disease, 1953-78 . . . . . . 16

4. Number of U.S. Hospital Discharges With

Ulcer Disease Diagnoses, 1966-78 . . . . . . . . . 16

5. Ulcer Disease in the United States According

to the Health Interview Survey, NCHS . . . . . 17

6. Costs of Ulcer Disease in 1975 as Estimated

by NCDD and SRI . . . . . . . . . . . . . . . . . . . . 19

7. Costs of Ulcer Disease in 1975 and 1977

as Estimated by SRI. . . . . . . . . . . . . . . . . . . . 22

Table No. Page

8.

9.

10.

11.

12<

1 3

14.

15.

16.

17.

18.

19.

20.

NCHS and CPHA Data on Number of

Selected Surgical Procedures in the

United States, 1966-78. . . . . . . . . . . . . . . . . .

Components and Measures of Components

in a Benefit-and-Cost Analysis of Cimetidine.

Short-Term, Double-Blind, PlaceboControlled Studies of Cimetidine: Effect on

Duodenal Ulcer Healing . . . . . . . . . . . . . . . .

Short-Term, Double-Blind, PlaceboControlled Studies of Cimetidine: Effect on

Gastric Ulcer Healing . . . . . . . . . . . . . . . . . .

Short-Term, Double-Blind, PlaceboControlled Studies of Cimetidine: Effect on

Duodenal Ulcer Pain Relief . . . . . . . . . . . . . .

Short-Term, Double-Blind, PlaceboControlled Studies of Cimetidine: Effect on

Gastric Ulcer Pain Relief. . . . . . . . . . . . . . . .

Controlled Trials of Maintenance

Cimetidine in Peptic Ulcer. . . . . . . . . . . . . . .

Results of Treatment With Two Hypothetical

Subpopulations of Ulcer Patients: Type A

More Resistant to Treatment and Prone

to Relapse Than Type B. . . . . . . . . . . . . . . . .

Short-Term, Double-Blind, PlaceboControlled Studies of Cimetidine: Effect on

Antacid Consumption. . . . . . . . . . . . . . . . . .

Number of Selected Surgical Procedures in

the United States, 1966-78 . . . . . . . . . . . . . . .

Proportion of Patients With First-Listed

Diagnosis of Ulcer Disease Having Surgery,

1966-78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number and Rate of All and Selected

Abdominal Surgical Procedures in the

United States, 1970-78. . . . . . . . . . . . . . . . . .

Percentage Cost Savings Estimated From

22

26

29

31

32

33

36

37

40

41

43

43

Robinson Associates Study . . . . . . . . . . . . . . 56

LIST OF FIGURES

Figure No. Page

l. Benefit-and-Cost Model for Medical

L

2.

3.

4.

5.

6.

7.

Interventions . . . . . . . . . . . . . . . . . . . . . . . . . 8

Number of Deaths in the United States With

Ulcer Disease as the Primary Cause, 1966-79. . 15

U.S. Hospital Discharges With Ulcer Disease

Diagnoses, All Sites, 1966-78 . . . . . . . . . . . . . 17

Paradigm Decision Tree: Cimetidine and

Alternative lntervention Strategies . . . . . . . . . 26

NCHS Data on Number of Selected Surgical

Procedures in the United States, 1966-78. ,... 42

CPHA Data on Number of Selected Surgical

Procedures in the United States, 1966-78. . . . . 42

Number of Deaths in the United States

From Ulcer Disease, 1976-79 . . . . . . . . . . . . . . 46
Case Study #11:

Benefit= and-Cost Analysis of

Medical Interventions: The Case of

Cimetidine and Peptic Ulcer Disease

Harvey V. Fineberg, M. D., Ph. D.

Associate Professor

and

Laurie A. Pearlman, A.B.

Research Analyst

Harvard School of Public Health

Boston, Mass.

SUMMARY

Introduction

This case study presents a conceptual model

for assessing the benefits and costs of medical

technology, and uses this model as a framework

for analyzing the benefits and costs of cimetidine in the treatment of peptic ulcer disease.

The body of the study is organized into three

major parts: 1) a description of the benefit-andcost model; 2) a selective description of clinical

features, epidemiologic patterns, and costs of

peptic ulcer disease; and 3) a review of the development, dissemination, health benefits, and

resource costs of cimetidine. The study ends

with a critique of one major analysis of cimetidine’s costs and benefits and some suggestions

for further research.

The Benefit-and-Cost Model for

Medical Interventions

The benefit-and-cost model stresses that an

evaluation of medical technology must apply to

an identifiable patient population and a specific

health intervention. An intervention may have a

diagnostic or a therapeutic purpose. A patient

population may be defined in terms of diagnostic category, a clinical sign or symptom, a risk

factor, or a complication of disease.

The model posits two principal classes of effects: clinical effects and health system effects.

The specific components of each depend on the

population and intervention of interest. Clinical

effects and health system effects interact and

lead to an outcome, expressed in terms of health

status and resource costs.

The components of the model apply to both

cost-effectiveness analyses (CEAs) and benefitcost analyses (BCAs), but the two analytic approaches have distinct purposes and measure

some components in different ways. The model

can also serve as a basis for identifying the

structural components of a decision analysis

that compares alternative medical interventions.

The model and a set of guidelines for review

of health care benefit-and-cost analyses are used

to organize and guide our discussion of the costs

and benefits of cimetidine in peptic ulcer

disease.
4 ● Background Paper #.2: Case Studies of Medical Technlologies

Peptic Ulcer Disease

Ulcers probably have multiple causes, but

gastric acid and pepsin appear to be necessary

ingredients. Epigastric pain (pain in the upper

middle abdomen) is often a prominent symptom

of peptic ulcers, but the clinical presentation is

variable. Furthermore, typical ulcer symptoms

may be caused by conditions other than ulcers.

A definite diagnosis requires direct visualization

by endoscopy or radiographic imaging of the

ulcer. Specific treatments of ulcer disease are

directed at reducing the presence or effects of

gastric acid.

Ulcer disease is a chronic condition with

spontaneous remissions and recurrences. Rates

of complications and mortality from ulcers are

relatively low, Excessive mortality appears to be

present only in the first year or so following

diagnosis. Little reliable information exists

about the natural history of ulcer disease in the

general population.

Peptic ulcer is a common condition that affects millions of Americans at some time during

their lives. The best available epidemiologic

evidence suggests that about 250,000 Americans

develop new peptic ulcers each year. New duodenal ulcers are more than four times as common as new gastric ulcers. Some studies have

found that the incidence of duodenal ulcer rises

gradually with age; others have found that it remains fairly constant above age 35. Above age

40, the incidence of gastric ulcer appears to rise

more dramatically than the incidence of duodenal ulcer. Duodenal and gastric ulcers are epidemiologically distinct. Several lines of clinical

and epidemiologic evidence suggest that over

the past 20 years the occurrence of new ulcers

has declined, or ulcer disease is generally less

severe than it was at one time, or both.

The basis for some estimates of the costs of

ulcer disease and the benefits of treatment is the

Health Interview Survey of the National Center

for Health Statistics (NCHS). Results of the

Health Interview Survey, based on self-reported

conditions in a household survey, however, appear to overestimate the occurrence and consequences of ulcer disease.

We estimate that the costs of ulcer disease in

1975 were approximately $2 billion. Just under

half of this total was due to health care expenditures (direct costs), and the remainder was due

to productivity losses from morbidity and mortality (indirect costs). Our estimate is based on a

review of two independent analyses of the costs

of ulcer disease, one by the National Commission on Digestive Diseases (NCDD) and the

other by the Stanford Research Institute (SRI).

The NCDD and SRI estimates of the total costs

of ulcer disease in 1975, $1.3 billion and $2.6

billion, respectively, differ by approximatel y

$1.3 billion. The NCDD and SRI estimates of direct costs differ by approximately $400 million,

a difference that reflects differences in the two

studies’ methods and differences in their detailed

assumptions and procedures. Their indirect cost

estimates differ by approximately $900 million,

a difference that reflects differences in the

studies’ projected morbidity losses. SRI’S indirect cost estimate, the higher one, is based on

data from the Health Interview Survey, which is

an inflated indicator of disease-specific morbidity. In both the NCDD and SRI studies, estimated indirect costs are based on a rather low

discount rate—2.5 percent. Use of a smaller discount rate increases the present value of future

earnings, thereby increasing apparent costs of

illness due to morbidity and premature death.

In addition to estimating costs for 1975, SRI

projected an estimate of peptic ulcer costs in

1977. Because of unwarranted assumptions of

growth in the morbidity of ulcer disease and use

of more expensive resources, the problem of

overestimated costs is compounded for 1977.

Cimetidine

Cimetidine represents a new class of histamine antagonists, called H2

-receptor antagonists, which block stimulation of gastric acid

secretion. The product was developed after extensive research by the Smith Kline & French

pharmaceutical firm and is marketed under the

registered brand name Tagamet®.

The Food and Drug Administration (FDA)

approved the use of cimetidine for up to 8 weeks

by patients with duodenal ulcer disease or hy-
persecretory conditions such as Zollinger-Ellison syndrome in August 1977. Use of cimetidine

spread rapidly. Since March of 1978, the drug

has been prescribed in approximately 60 percent

of ambulatory visits for ulcer disease each

month. In 1978, a conservatively estimated 1.5

million to 2 million U.S. ambulatory patients

with ulcers and other symptoms of gastric acidity were treated with cimetidine. Worldwide

sales to hospitals and pharmacies in 1979 probably exceeded $400 million.

The Benefit- and-Cost Model

Applied to Cimetidine

Organized according to the benefit-and-cost

model presented earlier, this part of the case

study describes available information about the

effects of cimetidine. It deals separately with

cimetidine’s clinical effects, its health system effects, and its potential impact on outcome.

Numerous controlled studies of patients with

duodenal ulcer confirm that cimetidine promotes healing and provides faster and more

complete pain relief than placebo. Less conclusive evidence suggests the drug may be more

effective than placebo for patients with gastric

ulcer. An intense antacid program appears to be

about as effective as cimetidine for patients with

duodenal ulcers, but more evidence of this is

still needed. Clinical studies have also shown

that relief of symptoms is not a reliable indicator of healing. In general, European studies

have found more favorable results with cimetidine than have U.S. trials.

Cimetidine used for up to 2 months appears

to be a relatively safe drug. Most known side effects are minor or reversible; however, recently

reported changes in the bacterial flora of the

stomach and endocrinologic effects may be

more significant. Available studies of maintenance cimetidine for periods up to 1 year do not

alter the current assessment of the drug’s relative safety. As is the case with any new drug,

possible long-term consequences of cimetidine’s

use are not known.

Compared to an intense course of antacids,

cimetidine is about equally effective and more

risky, but less troublesome to patients with

duodenal ulcer. Cimetidine plus a moderate

amount of antacid. costs no more than a therapeutically equivalent course of intense antacid

therapy. Experts now differ in their recommendations for initial therapy of duodenal ulcer,

some favoring cimetidine and others antacids. A

reasonable approach is to select therapy based

on each individual patient’s preferences and

personality.

Compared to placebo, maintenance treatment

with cimetidine for as long as 1 year significantly reduces the chance of ulcer recurrence

during the treatment period. Once cimetidine

treatment is discontinued, patients appear to

relapse at the same rate as they would have

without maintenance treatment. We are aware

of no controlled trials comparing maintenance

cimetidine to treatments other than placebo.

There is little empirical evidence either that

cimetidine prevents future complications of

ulcer disease or that cessation of cimetidine promotes complications. At present, FDA is considering approval of cimetidine for use longer than

8 weeks in patients with duodenal ulcers who

are at high risk for surgery.

In European trials, but not in U.S. studies,

cimetidine-treated patients tend to consume less

antacid than placebo-treated patients. Very limited empirical data are currently available on

the possible effects of cimetidine on use of other

medication, on diagnostic tests, and on physician visits. There are several studies under way

that may shed light on these matters.

Data from NCHS show that in 1978, the first

full calendar year after cimetidine was introduced in the United States, there was an unexpectedly sharp decline in the rates of surgery for

ulcer disease. This drop occurred against a

background of falling rates of surgery and hospitalization for ulcer disease over the previous

decade. Although other explanations of the

large drop in surgery for ulcer disease in 1978

are possible, the widespread use of cimetidine

may have been a contributing factor.

There is little evidence of any effect of cimetidine on mortality from ulcer disease. In one

short-term trial and one maintenance study, patients treated with cimetidine lost significantly
fewer days of work than patients taking placebo, but no controlled study has compared

work loss among patients receiving different effective treatments.

Review of Benefit- and-Cost Analyses

of Cimetidine

Several analyses of the resource cost implications of cimetidine have been undertaken in the

past few years. One major study, by Robinson

Associates, Inc., estimated that if cimetidine

had been used in 80 percent of duodenal ulcer

patients, 1977 cost; for duodenal ulcer disease in

the United States would have been reduced by

$645 million. This conclusion rests on subjective

estimates provided by selected physician experts

of the clinical and health system effects of

cimetidine, and on independent estimates of the

costs of duodenal ulcer disease based in part on

the costs of peptic ulcer disease in 1977 projected by SRI.

Our critical review of the Robinson Associates study focuses on the following five areas:

1) the accuracy of the clinical and health system

effects projected by their physician experts,

2) the relation between a percentage reduction in

health services devoted to ulcer disease and savings in health resources, 3) the accuracy of the

estimated total costs of all duodenal ulcer disease used as a baseline for percentage savings,

4) the applicability of projected percentage effects to the total population of patients with

duodenal ulcer disease, and 5) the validity of the

INTRODUCTION

This case study has both a specific and a general objective. The specific objective is to assess

available evidence about the benefits and costs

of cimetidine, a recently introduced pharmaceutical agent, in the treatment of peptic ulcer

disease. The general objective is to present an

approach to the evaluation of medical technology that emphasize:; salient features of both the

patient population and the medical intervention

of interest. The specific purpose serves the

general one—we present our analysis of cimetimethods used to compute average percentage effects due to cimetidine. We question some of the

assumptions and methods used in each of these

areas. Aside from the fundamental issue of possible inaccuracy in the physician estimates, we

believe the Robinson Associates study overstates expected savings by twofold to threefold.

Potential bias introduced by the selection of

physician informants would increase the magnitude of the overestimate.

Despite our criticisms of the study by Robinson Associates, available data and analyses support the belief that cimetidine currently saves

more health resources than it costs. Whether

further studies will affirm this conclusion or

new developments will alter cimetidine’s cost

effectiveness are empirical questions for the

future.

Suggestions for Further Research

If the object of analysis is to help inform clinicians and health policy decisionmakers about

the efficient use of resources in the care of patients with ulcer disease, then the most helpful

approach would be to do a CEA of alternative

interventions oriented to particular groups of

patients, comparing incremental clinical benefits to marginal resource costs. Rather than enumerate the resource and health implications for

a cross-section of the population in a single

year, the analysis might equally or more usefully focus on a cohort of patients and project effects over their lifetimes.

dine and ulcer disease as an application of the

general model for benefit-and-cost evaluation. ’

Peptic ulcer is a logical choice for this kind of

evaluation for several reasons. As a diagnostic

category, it comprises several anatomically and

epidemiologically distinct entities, but these are

sufficiently related to make peptic ulcer a valid

diagnosis. This common medical problem has a

‘We use the term “benetit-dnd-c(wt analysl~ ‘ t[) enc[)m pass both

cc)st-ettect iveness and C(WI -bend it (or bend It -cost I analyses.
Case Study #11 Benefit-and-Cost Analysis of Medical lnterventions: The Case of Cimetidine and Peptic Ulcer Disease ● 7

highly variable clinical course and an evolving

pattern of clinical expression and occurrence.

These features help demonstrate that a careful

assessment of a disease can be as important to

the evaluation of technology as is a comprehensive understanding of the technology itself.

Our selection of cimetidine emerged gradually. Initially, we wanted to use an assessment of

peptic ulcer disease as a backdrop for reviewing

the costs and benefits of a number of diagnostic

tests and therapeutic interventions such as those

listed in table 1. (In addition to these contemporary interventions, the variety of clinical approaches to ulcer disease over the past century

constitutes a rich history for anyone interested

in the progress and byways of medical science

(85).) It soon became evident that we could

either review several interventions superficially

Table 1 .—Selected Contemporary Interventions

Used in Peptic Ulcer Diseasea

—.- .—

Diagnostic interventions

—

Imaging

● Air-barium, double-contrast radiographic studies

● Fiberoptic endoscopy

Physiologic function tests

● Gastric secretory testing

Therapeutic interventions

Medical

● Antacids

● Anticholinergics

● Cimetidine

Surgical

● Partial gastrectomy

● Truncal vagotomy, with antrectomy or drainage

procedure

● Highly selective vagotomy

.— aDeSCrlptlOnS of Some of these lnterv~nt;ons are prov!ded later lri~h Is st Udy

—.

or analyze one in detail. We elected the latter

course, believing it would produce a more

coherent exposition of the general model.

We selected cimetidine for several reasons.

First, it is a recent innovation that was disseminated rapidly. Second, as a chemical entity, the

drug cimetidine does not evolve technically (unlike, for example, endoscopy) and its effects are

relatively independent of the skill of the clinician (unlike, for example, surgery’s). Since there

are fewer such complications related to the technology, we can appreciate more readily the

complexity introduced by features of the disease. Finally, the clinical effects of cimetidine

have been studied extensively, and its costs and

benefits have been and continue to be formally

assessed.

The body of this case study is organized into

three main parts. First, we present a brief

description of a general benefit-and-cost model

for evaluating medical interventions. Second,

we describe pertinent clinical and epidemiologic

features of peptic ulcer disease, and summarize

several cost-of-illness studies of the disease.

Third, we review the development, dissemination, health benefits, and resource costs of

cimetidine. As a framework for the analysis of

cimetidine, we use the general benefit-and-cost

model for evaluating medical interventions and

a set of questions provided in a section of this

case study entitled “Guidelines for Review of

Health Care Benefit-and-Cost Analyses. ” We

offer a critique of one major analysis of cimetidine’s costs and benefits and end with suggestions for further research.

THE BENEFIT-AND-COST MODEL FOR MEDICAL INTERVENTIONS

Every assessment of the benefits and costs of

medical care should apply to an identifiable patient population and a specific health intervention. The ultimate objective of a benefit-andcost assessment is to measure the effects that a

specific intervention has on the health outcome

of those patients and on resource consumption.

Implicit in this objective is a societal perspective. The health and resource outcomes result

from the intervention’s direct and induced effects on the clinical well-being of patients and

on other components of the health system.

These relations and interactions are summarized

in the benefit-and-cost model shown in figure 1.

The principal components of the model are as

follows: 1) population, 2) intervention, 3) clinical effects, 4) health system effects, and 5) outcome. The population may be delineated in

terms of a particular diagnosis or pathologic en-
8 ● Background Paper #2: Case Studies of Medical Technologies

Figure 1 .—Benefit-and-Cost Model for Medical Interventions

tity (e.g., peptic ulcer), a risk factor (e.g.,

cigarette smoking), a clinical sign or symptom

(e.g., dyspepsia), or a complication of disease

(e.g., gastrointestinal hemorrhage). Interventions are of two broad types: tests, which are

meant to produce information about the clinical

status of the patient; and treatments, which are

intended to alter the development or course of

disease. 2 Clinical effects include any physical or

psychological changes that may alter the health

status of the patient; these effects may be short

or long term. Health system effects include all

changes in the methods and means of medical

care that are consequent to the initial intervention. The health outcome is reflected in mortality and morbidity, i.e., in the length and quality

of life. The resource outcome, resource costs

and savings, pertains to net effects on social

resource consumption.

‘The distinction between tests and treatments is useful analytically, but not absolute, since, albeit rarely, a therapeutic trial may

also have a diagnostic intent.

The general framework of the model applies

to any intervention and patient population. The

detailed components under clinical and health

system effects, however, will vary with the particular disease and intervention being considered. Thus, for example, if we were analyzing

an intervention that might affect chronic disease

in the elderly (e.g., a prevention or treatment

for senile dementia), we would want to consider

nursing home use explicit] y under health system

effects. In general, the components identified for

clinical effects and for health system effects

should be: pertinent to the disease and intervention; complete, in that all important effects are

considered; and mutually exclusive, so that a

single effect is not counted twice. They should

also be components for which readily available

and accurate measures can be obtained. The validity and feasibility of a cost-effectiveness or a

benefit-cost evaluation depend on the extent to

which the analytic components conform to these

criteria.
According to the model, an intervention itself

may alter a patient’s clinical status, effect

changes in the health system, and consume resources. Clinical effects include both the advantages and risks of care. The direct clinical effects of a test are typically limited to side effects

and complications, but a test can also alter clinical status by inducing changes in the health system, primarily by altering the choice of therapy.

A treatment is intended to have direct clinical

effects, but can also alter subsequent use of

diagnostic procedures (a health system effect)

by changing the course of the disease.

Clinical effects and health system effects can

interact in both directions. As illustrated in the

model, interactions among the various health

system components may also occur. Changes in

a patient’s clinical status are likely to alter the

future course of medical care for the patient;

and shifts in the medication, hospitalization,

surgery, or other care given to the patient are

likely to affect clinical status.

Although the model is premised on the application of a particular intervention for a particular disease, health system effects may not be

limited to the target disease entity. For example, if an intervention reduces the number of

physician visits for a particular disease, it could

alter the number of diagnostic tests and amount

of medication employed for other disease

problems.

Health outcome typically includes mortality

measures, such as number of deaths, age-adjusted death rates, or years of life lost. It also includes morbidity measures, such as quality-oflife or health-status indexes. Morbidity and

mortality may also be combined into a unitary

measure, such as quality-adjusted life years

(152) or another multiattribute utility scale (87).

As indicated in the model, morbidity and mortality also have direct implications for productivity and hence for social resource consumption.

The benefit-and-cost model for a particular

population and intervention suggests the complexity of undertaking a comprehensive assessment of either all uses of a single intervention or

all interventions for a particular population.

Consider two interventions, endoscopy and

cimetidine, and the population of patients with

duodenal ulcer. Both interventions are used in

some patients with duodenal ulcer; each is used

independently of the other in some patients with

duodenal ulcer; and both interventions are also

used, singly or together, in some patients

without duodenal ulcer. Moreover, neither intervention is used in some patients with duodenal ulcer. Compound these partial overlaps

with additional interventions, add variations in

the particular populations for which data are

available, and the magnitude of the problem

begins to become apparent.

The benefit-and-cost framework outlined here

is applicable to both BCA, or cost-benefit analysis (CBA), and CEA. A BCA assesses the net

value of an intervention by summing all effects

on a common scale. Typically, both resource

expenditures and health outcome effects are

assigned monetary values. A variety of means

to measure the resource value of health benefits

have been proposed; the most widely used is expected productivity loss based on discounted

future earnings at the age of death or disability

(31,89). Thus, a BCA converts decreased deaths

and disabilities into increases in productivity,

and treats them as the indirect benefits of a

health intervention. These indirect benefits are

added to any direct savings in health resource

consumption (the direct benefits) to yield a net

value.

In the cost-effectiveness approach, the aim is

to measure the efficiency with which an intervention achieves health benefits. The questions

addressed in CEA are: 1) What is the most efficient way to achieve a particular health benefit?

or 2) Given specified available resources, what

intervention strategy offers the greatest gain in

health benefit? Answering these questions requires the commensuration of different types of

benefits, such as morbidity and mortality, but

permits benefits to be measured in their own,

nonmonetary terms. A cost-effectiveness approach is more likely than a benefit-cost approach to preserve a sense of intangible health

care benefits, which in the latter are typically

noted and left unassessed. Although CEA may

be more suitable for comparing alternative in-
terventions for a particular disease, however,

BCA is necessary for comparing health care

with other socially desirable uses of resources.

If one chooses to develop a decision analysis

comparing the use of a particular intervention

with its alternatives, the benefit-and-cost model

can serve as a useful basis for identifying pertinent structural components: chance events (e.g.,

important results of the principal and subsequent interventions), choices (e.g., use of other

health system components), and outcomes (e.g.,

net benefits and costs). The decision-analytic

approach is a prescriptive model for choosing

among alternative treatment strategies. Even if

technically correct in all assumptions and computations, a decision analysis does not necessarily predict the management strategies employed by physicians. In estimating the cost effectiveness of a given intervention, it is equally,

if not more, important to apply a descriptive

model (i. e., to base estimates on changes in

management strategy that occur in practice).

The distinction between prescriptive and descriptive assessment is analogous to the differentiation between efficacy (effects under ideal conPEPTIC ULCER DISEASE

Definition and Etiology

A peptic ulcer is a crater that extends through

the full thickness of the mucosa (mucous membrane) of the stomach or duodenum (the first or

proximal portion of the small intestine). The

pathologic appearance of benign gastric

(stomach) and duodenal ulcers is similar; both

are believed to be related to too much stomach

acid and pepsin for the level of mucosal

resistance (82) .3 Although the presence of

stomach acid is necessary for ulcers to develop,

the level of acid is often normal in patients with

ulcer disease; these patients presumably have

impaired tissue resistance. Sturdevant and

Walsh (140) list 17 factors other than excessive

gastric acidity that may predict increased

—..—

‘l)(’p\tn\ ,Ir(’ dIgw[ IL’(’ (,n.ynlc~ th.lt .lre .1[ tlve onlv in the prc\-

t,n( t’ ()1 <I( ICI }{(’nc t’, i t i~ d I t tic u I t t () wpa r.] tc t ho role> of ~cid ~nd

p(p~ln I n t h(’ p.ltho~(,n(,~ts (It ulcer.

ditions) and effectiveness (effects under average

conditions) noted in reports from OTA (112).

Any benefit-and-cost analysis encounters numerous conceptual and practical difficulties.

These range from the presence of uncertainty

and the lack of reliable information to questions

of measurement and methods of aggregation

over persons and time, to value judgments. Systematic reviews of methodologic issues in CEA

and BCA in health have been presented by other

authors (149,151).

Following descriptions of peptic ulcer disease

and cimetidine in the next two parts of this case

study, we present an analysis of the costs and

benefits of cimetidine in peptic ulcer disease,

using the general benefit-and-cost model described above. Later in the case study, we present a set of guidelines in the form of questions

to be used in reviewing benefit-and-cost analyses in health care. These guidelines presume

familiarity with the basic assumptions and approaches in BCA and CEA. We believe they are

helpful for review of benefit-and-cost analyses

of cimetidine such as that presented in the next

to the last part of this case study.

likelihood of developing duodenal ulcer. These

factors include sex, age, blood type, a few

diseases, and habits such as smoking and drinking coffee. Despite the popular notion of the

“high anxiety, ulcer-prone person, ” psychological stress and personality factors have

not been shown conclusively to be related to the

development of ulcers,

The gastrointestinal tract is a continuous

organ, and there is a continuum in the anatomic

location of ulcers in the stomach and duodenum. For unknown reasons, peptic ulcers

show a predilection for areas at or near rnucosal

junctions (81). Since gastric and duodenal ulcers

appear to differ in generic and other features,

there are reasons to consider them separately in

clinical and epidemiologic studies. Often, however, they are considered together, and the situation is further complicated by the frequent oc-
currence of new duodenal ulcer in patients who

previously had gastric ulcer (17).

Symptoms and Diagnosis

Both duodenal and gastric ulcers produce abdominal pain in the patient, typically in the

epigastric region (upper middle abdomen). Less

often, they produce nausea and vomiting. Usually, the pain is relieved by food, but in some

patients, food may exacerbate pain. Most patients with epigastric pain do not have ulcers; a

Danish study found that 68 percent of men and

83 percent of women with epigastric pain did

not have ulcers (cited by 140). Some patients develop painless ulcers and have bleeding or perforation as the first manifestation of ulcer disease (119,140).

The specific diagnosis of peptic ulcer depends

primarily on imaging examinations, with either

barium X-rays or more direct fiberoptic endoscopy. Fully flexible fiberoptic gastroscopes were

introduced in 1958 (77). Numerous technical improvements made since have enhanced the flexibility, ease of control, and clinical usefulness

of these instruments (10). Endoscopists have

formed their own professional society (the

American Society for Gastrointestinal Endoscopy), and the endoscopic procedure is widely

used. Radiographic examination of the stomach

has been improved in recent years by the use of

an air-barium, double-contrast technique involving high-density barium sulfate, effervescent tablets to distend the stomach and simethicone to break up small air bubbles (96).

Acid secretion and other tests play a secondary role in diagnosis, except in occasional patients, such as those whose ulcer is caused by

gastrinoma (a gastrin-secreting tumor that produces the Zollinger-Ellison syndrome of severe

ulcers, intractable pain, and diarrhea).

Treatment and Natural History

The treatment of peptic ulcer disease is intended to relieve symptoms, promote healing,

and prevent recurrences and complications

(140). Gastric acid is the focus of contemporary

specific treatment for peptic ulcer—reducing

acid secretion by pharmacologic or surgical

means, neutralizing acid with antacids, or increasing tissue defenses against acid. 4 Some

physicians begin treatment on the basis of clinical symptoms without pursuing a definitive

diagnosis (140). A U.S. patient who is diagnosed as having a new peptic ulcer will typically

be told to eat a regular, nutritious diet and to

avoid aspirin, alcohol, cigarettes, and coffee.

Specific medication might include antacids or

cimetidine and possibly anticholinergic drugs

(drugs that block the passage of impulses

through the parasympathetic nerves).

Surgery is normally reserved for patients with

recalcitrant symptoms, frequent relapse, or

complications such as bleeding, perforation, or

obstruction. A large variety of surgical procedures has been advanced over the past century,

and there is considerable difference of opinion

about the optimal timing and selection of an

elective surgical procedure for patients with

peptic ulcer disease (44,73,111,124). Highly

selective vagotomy has been advocated recently

(78). This procedure entails transection of only

those nerve fibers that supply the lower esophagus and body of the stomach; the nerve supply

to the remainder of the stomach and to other abdominal organs is left intact. Proponents of

highly selective vagotomy believe that this procedure obviates some unpleasant side effects of

standard vagotomy (cutting of the vagus nerve).

The surgical procedure is technically demanding, however, and its comparative effectiveness

in the hands of many different surgeons remains

to be shown. Cochran, et al. (30) have described

the complexity of evaluation and requirements

for adequate assessment of any surgical treatment for ulcer disease.

Over the years, an enormous variety of nonsurgical therapeutic regimens has been employed to treat peptic ulcers. An example is diet:

Leube introduced a starvation regimen in 1876;

Lenhartz recommended frequent small feedings

in 1906; and Sippy proposed a bland diet in

1915, variations of which remained popular for-
many years (84, 119). Now dietary restrictions

are believed to play no role in the management

of peptic ulcers (119,140), Despite the demonstrated ineffectiveness of diet in the treatment of

ulcers, special diets are still widely prescribed

(153). The plethora of unsubstantiated, but traditional and trusted, treatments led one authority to exclaim in the late 1960’s: “Few conditions

provide such a splendid opportunity for practicing 19th century medicine in the second half of

the 20th century as gastric ulcer” (37). The

1960’s witnessed the introduction, spread, and

decline of gastric freezing, a nonsurgical treatment intended to reduce stomach acid and promote healing. Such treatment was eventually

proven to be ineffective and occasionally harmful. Some clinicians have also used X-ray therapy to treat ulcer disease in selected patients,

and renal failure has been reported as one late

complication of such therapy (143).

The reasons for such diverse treatments, and

particularly, for the extended use of some ineffective approaches, rest partly in the expression and natural history of ulcer disease. First,

as mentioned earlier, the cardinal symptom of

ulcer disease is stomach pain; so subjective an

expression of illness as stomach pain may respond to suggestion or placebo. Second, ulcers

often heal spontaneously; thus, any apparent

success with treatment should be compared to

the natural rate of healing. Finally, ulcer disease

tends to be chronic, with recurrences and remissions; effective short-term treatment may or

may not alter the long-term outlook.

The subjective nature of ulcer disease and its

variable course suggest that evaluations of treatment must be controlled carefully for bias, preferably with double-blind randomization, On

this score, the state of clinical assessments of

peptic ulcer disease appears to be improving.

Chalmers, et al. (25) reviewed studies of peptic

ulcer treatments published in a leading gastroenterology journal and found that more than so

percent of the therapeutic trials published after

1976 had a randomized, controlled design, compared to 30 percent or fewer of those published

between 1970 and 1974. In addition, improved

endoscopic methods now permit a more definitive diagnosis to be established in patients included in clinical trials.

Assessment of long-term results of any intervention in ulcer disease requires comparison to

the natural history of the disease. Ideally, the

natural history of peptic ulcer disease would be

defined through long-term followup of a representative sample of patients with ulcer disease. As discussed below, however, available

information about the natural course of ulcer

disease is fragmentary.

Fry (57) reported a 5- to 15-year followup of

212 patients with ulcer disease diagnosed between 1948 and 1957 in his general practice in

London. He found that symptoms tended to recur and worsen for the first 5 to 10 years, and

then usually diminished, irrespective of treatment. Sixteen percent of patients with duodenal

ulcer and 18 percent with gastric ulcer required

surgery. Complications of bleeding occurred in

14 percent and complications of perforation in 6

percent. Only one patient died from causes related to ulcer.

Krause (91) found similarly low mortality

from ulcer in 371 Swedish patients with duodenal ulcer followed for 25 to 35 years. In a

study based on a 50-percent random sample

of all patients with duodenal ulcer diagnosed between 1963 and 1968 in the population of

500,000 persons living in Copenhagen County,

Denmark, Bonnevie (20) found a significant additional mortality risk in the first year following

diagnosis of ulcer, but not thereafter. Griebe, et

al. (66) interviewed 154 patients living; in

Copenhagen in 1976 who had developed duodenal ulcer disease in 1963. One hundred and

twenty patients (78 percent) had been treated

medically; nearly half of these patients were

asymptomatic, and approximately 16 percent

still had severe symptoms. Thirty-four patients

had been treated surgically, but their clinical

status is not described further.

A Veterans Administration (VA) study followed more than 600 patients with gastric ulcer

diagnosed in 16 hospitals during a 7-year period

(69). More than 75 percent of the patients experienced ulcer healing with medical treatment
within 12 weeks, but 42 percent of these patients

had one or more recurrences in the following 2

years. Patients who failed to heal initially were

assigned randomly to further medical or surgical treatment. Two years later, a higher proportion of patients in the the surgical group

were alive and free of symptoms and recurrence, but the differences between the surgical

and medical groups were not statistically significant. Expressed as a proportion of incidence per

year among all patients, complications of hemorrhage occurred in 2.5 percent, obstruction in

1.2 percent, and perforation in 0.6 percent.

For several reasons, the available data on the

natural history of ulcer disease are unsatisfying.

The data come from different geographic 1ocations and cover different time periods and different mixes of patients with duodenal and

gastric ulcer. Patients received various treatments (and differing proportions were offered

surgery), and results reflect the history under

varied treatments rather than a natural history

of the disease. Rates of complication and death

due to ulcer are low and difficult to assess in

relatively small cohort studies; Bonnevie’s

analysis (20) is exceptional in specifying the attributable mortality risk from newly developed

ulcer disease. Finally, such studies of the clinical

course of disease are necessarily dated. If the

course of ulcer disease is changing over time,

data from previous patient cohorts may not apply today.

Epidemiologic Patterns

Ulcer disease is a common medical problem,

but has apparently become less common over

the past 20 years. Here we summarize estimates

of the present incidence and prevalence of ulcer

disease and describe the basis for the conclusion

that ulcer disease is occurring less frequently.

We conclude this section with comments directed specifically to the Health Interview Survey conducted by NCHS, since although its results are used in several estimates of the costs of

ulcer disease and the benefits of intervention, we

believe the Health Interview Survey overestimates the prevalence of ulcer disease.

Several aspects of the definition of disease

and of data collection limit our ability to compare results from different studies of the occurrence of ulcer disease in the United States today. Any effort to assess the incidence and prevalence of ulcer disease is necessarily restricted to

a particular place and time. Insofar as there are

geographic variations and shifts in the disease

over time, projections to other countries and to

the present data are uncertain.

In addition, different studies define the prevalence and incidence of this chronic and recurrent disease differently. Some (e.g., 35,36,57)

define prevalence to mean the “period prevalence, ” or the number of patients who suffer

from ulcer disease during a given time period;

others (e. g., 105) use prevalence to mean the

“lifetime prevalence, ” or the proportion of patients who have ever had an ulcer. Incidence

may be taken to mean the proportion of a population at risk that first develops ulcers in a

given time period (e.g., 18,19) or the percentage

that develops either a new or recurrent active

ulcer crater during a given time period (e. g.,

147). The methods employed in different studies

to detect disease also vary, ranging from the use

of autopsy results, through review of clinical

records, to the use of questionnaire surveys.

On the basis of a number of epidemiologic

studies, some experts estimate that the current

incidence of new cases of duodenal ulcer in the

United States is about 200,000 per year and that

the incidence of new cases of gastric ulcer is

about one-fourth that (140).

Bonnevie (17, 18, 19) reported several comprehensive surveys of duodenal and gastric

ulcer disease occurring between 1963 and 1968

in Copenhagen County, Denmark (an area with

500,000 inhabitants). Defining incidence as new

ulcer disease and basing the diagnosis on review

of hospital records, he estimated the annual incidence of duodenal ulcer per 1,000 persons age

15 and over to be about 1.8 for men, 0.8 for

women, and 1.3 overall (18). The annual incidence of gastric ulcer alone per 1,000 inhabitants age 15 and over he estimated to be approximately 0.3 for both men and women (19). He

also found that duodenal and gastric ulcers occur in the same patient much more often than

would be expected by chance if the two types

occurred independently (17). Bonnevie (18,19)
cites earlier population surveys conducted in

England, Scotland, Norway, and Denmark that

found incidence of duodenal ulcer ranging

from 0.38 to 2.70 per 1,000 inhabitants age 15

and over and incidence of gastric ulcer ranging

from 0.1 to 1.14 per 1,000 inhabitants age 15

and over.

A mail survey of Massachusetts physicians

conducted in 1967 and 1968 found the incidence

rates of reported duodenal ulcer of 1,000 persons age 25 and over to be approximately 2.9

per year for men and 1.5 per year for women

(105). In the same study, physicians reported

the incidence of gastric ulcer per 1,000 persons

age 25 and over to be approximately 0.35 per

year.

Different epidemiologic studies have found

varying patterns of age-specific incidence of

duodenal and gastric ulcer. In general, the incidence of duodenal ulcer appears to rise gradually with age or to remain essentially constant

above age 35, and the incidence of gastric ulcer

appears to rise more dramatically above age 40.

Bonnevie (18) found the age-specific incidence

rate of duodenal ulcer to increase graduall y in

both sexes to a maximum of 3 per 1,000 inhabitants between age 75 to 79. Gastric ulcer showed

a more dramatic rise in incidence above age 40,

peaking at a level of about 1 per 1,000 for men

age 60 to 64 and for women above age 70 (19).

Among Massachusetts physicians surveyed in

the late 1960’s, the incidence of duodenal ulcer

in both sexes appeared to increase up to age 25

to 34, and then to remain fairly constant; gastric

ulcer in male physicians continued rising to a

peak at age 65 to 74 (105). Fry’s review of his

patient experience showed duodenal ulcers

reaching their peak incidence in both sexes in

the decade 1930-39 and gastric ulcers reaching

their peak some 20 years later in the decade

1950-59 (57).

The aforementioned incidence figures are substantially lower than the rates found in recent

household interview surveys conducted by

NCHS (35,36). After we review evidence concerning the prevalence and changes in the occurrence of ulcer disease during the past 20

years, we will discuss NCHS’s Health Interview

Survey (which is based on household interviews) in more detail.

According to traditional medical lore, 1 U.S.

male in 10 will develop a duodenal ulcer by age

55. As pointed out by Mendeloff (104), this easily remembered figure is based on projections

made by Ivy in 1946 (84). A number of autopsy

studies in Britain and elsewhere (cited by 104)

confirmed this figure. It may be argued that insofar as the stress of illness can provoke ulceration, autopsy results may be misleading for the

population at large. However, the previously

cited survey of Massachusetts physicians (105)

also found that approximately 10 percent of

male physicians age 65 through 74 at some time

had duodenal ulcer. The current level is a matter

of conjecture, because the lifelong prevalence

rate of ulcers ultimately depends on age-specific

incidence rates, and these rates appear to be

declining,

Ulcer disease appears to have been occurring

less frequently or less severely, or both, over the

past 20 years. This conclusion derives from several lines of clinical and epidemiologic evidence.

These include overall declines in rates of mortality and hospitalization due to ulcer disease,

and, especially, several age-cohort analyses of

the incidence and mortality of ulcer disease.

Susser (141,142) deduced from age-specific

mortality rates between 1900 and 1960 that

there was a decrease in risk of ulcer disease in

each successive age cohort, producing a rise in

the mean age of patients. This decline was corroborated by a cohort analysis conducted by

Monson and MacMahon in their survey of Massachusetts physicians (105). Monson and MacMahon found the age-specific risk of developing

ulcer disease among physicians born between

1922 and 1932 to be much lower than the rate

for those born in the preceding 20 years. A

study of British physicians found a 40-percent

decrease in the incidence of duodenal ulcer

disease between 1947 and 1965 (103).

U.S. mortality from ulcer disease has declined

steadily since the early 1960’s (see table 2 and

fig. 2). The age-adjusted mortality rate dropped

by two-thirds in 1977 from its 1962 peak level
Case Study #11 Benefit-and-Cost Analysis of Medical Interventions: The Case of Cimetidine and Peptic Ulcer Disease ● 15

Table 2.–Number of Deaths in the United States With Ulcer Disease as the Primary Cause, 1960-79

—

Peptic, site

Year Gastric Duodenal unspecified Gastrojejunal Total

1960 . . . . . . . . . . . . . 5,707 5,653 — 322 11,682

1963 . . . . . . . . . . . 6,330 5,831 — 244 12,405

1966 ......, . . . . . . 5,599 4,722 — 197 10,518

1968 . . . . . . . . . . . . . 3,829 4,413 1,218 721 10,181

1969 . . . . . . . . . . . . . 3,719 4,381 1,212 798 10,110

1970 . . . . . . . . . . . . . 3,502 3,916 1,189 739 9,346

1971 . . . . . . . . . . . . . 3,385 3,680 1,055 700 8,820

1972 . . . . . . . . . . . . . 3,274 3,510 1,132 756 8,672

1973 . . . . . . . . . . . . . 3,289 3,385 1,014 765 8,453

1974 ..., . . . . . . . . . 3,050 3,048 971 751 7,820

1975 . . . . . . . . . . . . . 2,900 2,920 923 710 7,453

1976 . . . . . . . . . . . . . 2,834 2,686 908 698 7,126

1977 . . . . . . . . . . . . . 2,669 2,452 779 662 6,562

1978 . . . . . . . . . . . . . — — — — 5,550’

1979 . . . . . . . . . . . . . — — — — 5,560b

aprellmtnary flgure5, extrapolated from a10-PercentsamPle

bprehmlnary~gure5 extrapolated froma IO percent sampleoverthe first 6monthsof 1979

SOURCE National Center for Health Statlsttcs, D!vlslonof Vital Statlstlcs, Hyattsvflle, Md

Figure 2.— Deaths in the United States With Ulcer

Disease as the Primary Cause, 1966-79

6,000

5,000 t

1965 1970 1975 1980

Year

Note: 1978 and 1979 figures are preliminary.

SOURCE Based on data from the National Center for Health Stat{ stfcs, DIvIslon of V!tal Statlstlcs Hyatt svllle Md

(see table 3), Hospitalizations for ulcer disease

have also declined steadily in both the United

States (see table 4 and fig. 3) and Great Britain

(21). The drop in U.S. hospitalizations appears

mainly due to a fall in admissions for duodenal

ulcer, whereas the drop in Great Britain is due

more to declining admissions for gastric ulcer.

Mendeloff (104) reported a sO- percent decline

in the number of diagnoses of duodenal ulcer

between 1960 and 1972 among an apparently

constant population in the U.S. armed forces.

Data from a large U.S. manufacturing company

showed a 56-percent drop in episodes of disability due to duodenal ulcer and a 68-percent drop

in episodes of disability due to gastric ulcer between 1960 and 1970 among male employees

(3).

Some of these trends might be explained by

the advent of a dramatic and continuing improvement in the prevention and care for ulcer

disease during the past 20 years, but no likely

candidate representing this can be found (21).

The data are consistent with a shift in the spectrum of ulcer disease toward less severe forms, a

possibility posited by Mendeloff (104). Such a

shift may accompany what appears to be the

simplest explanation: Ulcers are occurring less

frequently than they did previously. The rea-
16Ž Background Paper #2 Case Studies of Medical Technologies

Table 3.—Mortality Rates in the United States

for Deaths Due to Ulcer Disease 1953-78

——

Age-ad lusted rate per

Year 100,000 populatationb

——————

1953 . . . . . . . . . . . . . .

1958 . . . . . . . . . . . . .

1960 . . . . . . . . . . . . . .

1961 . . . . . . . . . . . . . .

1962 . . . . . . . . . . . . . .

1963 . . . . . . . . . . . . . .

1964 . . . . . . . . . . . . . .

1965 . . . . . . . . . . . . . .

1966 . . . . . . . . . . . . . .

1967 . . . . . . . . . . . . . .

1968 . . . . . . . . . . . . . .

1969 . . . . . . . . . . . . . .

1970 . . . . . . . . . . . . . .

1971 . . . . . . . . . . . . . .

1972 . . . . . . . . . . . . . .

1973 . . . . . . . . . . . . . .

1974 . . . . . . . . . . . . . .

1975 . . . . . . . . . . . . . .

1976 . . . . . . . . . . . . . .

1977 . . . . . . . . . . . . . .

1978 . . . . . . . . . . . . . .

5.1

5.3

5.2

5.2

5.4

5.2

4.6

4.3

4.2

3.9

3.7

3.6

3.2

3.0

2.9

2.7

2.4

2.2

2.1

1.8

—

Crude rate

aRates~hown lncludegastrlc, duodenal, andpeptlc ulcer (siteunspeclfled)

bAdJusted to 1940 population, the standard population used by the National

Center for Health Statlstlcs

SOURCE National Center for Health Statlstlcs, Dlvlslon of Vital Statlstlcs,

Hyattsvdle, Md

sons for the apparently declining incidence and

severity of ulcers are matters for speculation,

The data on ulcer disease from the Health Interview Survey of NCHS warrant separate consideration for three reasons. First, the Health lnterview Survey data are gathered in a unique

manner; they are based on self-reported conditions in household interviews. Second, estimates of disease incidence and consequences

obtained from Health Interview Survey data are

substantially greater than those obtained from

other sources, including other NCHS sources

and epidemiologic studies such as those described above; also, estimates from the Health

Interview Survey show little change between the

years 1968 and 1975. Finally, the survey data

deserve special attention, because they are used

to estimate some of the costs and benefits of

treatment for ulcer disease that we review later

in this case study.

Household surveys of chronic digestive

diseases in the United States were conducted in

Table 4.—Number of U.S. Hospital Discharges With Ulcer Disease Diagnoses, 1966-78

Year Gastric

Peptic, site

Duodenal unspecified Subtotal a

——-..— 

Gastrojejunal

. ———— — — —---------- Tota l

b 

- . .

Ulcer as first-listed diagnosis

1966 . . . . . . 166,100 345,200 — 511,300

1970 . . . . . . 89,200 273,500 68,300 431,000

1971 . . . . . . 94,100 251,400 68,600 414,100

1972 . . . . . . 99,300 241,400 81,200 421,900

1973 . . . . . . 102,900 227,100 68,100 398,100

1974 . . . . . . 101,500 239,800 75,300 416,600

1975 . . . . . . 101,500 224,100 77,000 402,600

1976 . . . . . . 103,400 194,000 81,100 378,500

1978 . . . . . . 105,100 166,300 81,900 353,300

Ulcer as a listed diagnosis

1966 . . . . . . 223,800 464,300 — 688,100

1970 . . . . . . 127,200 384,200 108,900 620,300

1971 . . . . . . 137,200 358,600 110,800 606,600

1972 . . . . . . 147,300 362,300 131,800 631,400

1973 . . . . . . 149,800 339,900 123,700 613,400

1974 . . . . . . 156,400 360,200 136,100 652,700

1975 . . . . . . 158,400 336,200 150,300 644,900

1976 . . . . . . 160,700 302,300 158,300 621,300

1977 . . . . . . 173,000 285,900 159,300 618,200

1978 . . . . . . 165,400 279,400 184,600 629,400

— afncludes gastric, duodenal, and peptic ulcer (Site unspecified)

blncludes gastric, duodenal, pept(c (site unspecified), and 9aStr0Je]LInal ulcer

SOURCE. National Center for Health Slatistlcs, National Hospital Discharge Survey, Hyattsvllle. Md

14,700

7,400

6,600

7,400

7,200

8,700

9,100

6,900

7,200

17,500

9,100

9,100

9,500

9,600

11,200

12,400

10,700

8,700

10,800

526,000

438,400

420,700

429,300

405,300

425,300

411,700

385,400

360,500

705,600

629,400

615,700

640,900

623,000

663,900

657,300

632,000

626,900

640,200
Case Study #11: Benefit-and-Cost Analysis of Medical Interventions, The Case of Cimetidine and Peptic Ulcer Disease ● 17

Figure 3.—U.S. Hospital Discharges With Ulcer

Disease Diagnoses, All Sites, 1966.78

750

700

650

600

550

500

450

400

350

1965 1970 1975

Year

SOURCE Based on data from the National Center for Health Statistics, NaIional Hospital Discharge Survey Hyattsville Md

by NCHS 1968 and 1975 (35,36). The surveys

consisted of questions asked at a sample of

households designed to represent the civilian,

noninstitutionalized U.S. population. Selected

Health Interview Survey results pertaining to

ulcer disease are summarized in table 5. The

projected incidence of new ulcers based on the

Health Interview Survey, approximately

600,000 cases per year, is more than double that

based on other epidemiologic evidence described earlier. People interviewed at home

reported approximately 7 million physician

visits for ulcers in 1975, nearly triple the 2.5

million physician visits for ulcer disease that

Table 5.—Ulcer Disease in the United States

According to the Health Interview Survey, NCHSa

Measure 1968 1975 1978

Number of conditions (in 000’s) 3,360 3,955 3,778

Prevalence per 1,000 personsb. 17.2 18.9 17.7

Incidence per 1,000 personsc. 3.0 2.9 –

Ever hospitalized for ulcer

disease. . . . . . . . . . . . . . . . . . 40.60/0 38.30/0 —

Ever had surgery for ulcer

disease. . . . . . . . . . . . . . . . . . 6.90/o 8.1% —

Currently under M.D. care. . . . . 61.1 0/0 65.40/o —

M.D. visits in past 12 months:

0. . . . . . . . . . . . . . . . . . . . . . . 32.4% 36.1% —

1 17.1 % 17.8% —

2 to 4 : : : : : : : : : : : : : : : : : : : : 23.70/o 26.30/0 —

5 or more. . . . . . . . . . . . . . . . . 18.20/o 15.80/o —

Unknown . . . . . . . . . . . . . . . . 4.60/0 4.00/0 —

Number of bed-disability daysd

:

0. . . . . . . . . . . . . . . . . . . . . . . . 74.5 74.5 —

1 to 3, ., . . . . . . . . . . . ... , . . — 7.4 –

4 to 7 ...., . . . . . . . . . . . . . . . — 5.2 –

8 to 14 . . . . . . . . . . . . . . . . . . . 4.9 4.4 —

15 to 30 . . . . . . . . . . . . . . . . . . 3.6 3.6 –

31 or more. . . . . . . . . . . . . . . . 3.4 2.2 –

alnClude~ ~astrlc duodenal, pep~lc (site unspeclfled), and 9astrolelunal utcer

bcondltlon repor~ed as hav(ng been present at some time durln9 the Year Prior

to Interview

con set reported as wlthln year prior to lntervlew

dA bed.dlsablllty day IS a day In which a person StayS In bed for all or most of

the day because of ulcer

SOURCE National Center for Health Stat! stlcs, Dwislon of Health Interwew

Statlstlcs, Hyattsvllle, Md

year reported in the NCHS National Ambulatory Medical Care Survey (34). In contrast to

other epidemiologic evidence for the declining

incidence of ulcers, the Health Interview Survey

results show little change, with even a slightly

increased prevalence between 1968 and 1975.

These discrepancies may derive from several

sources. Most likely, more people report having

ulcers in the Health Interview Survey than actually have them. Some individuals without

medical training may think of any stomach

trouble as “ulcers” and use the specific medical

term more broadly than is clinically correct. In

1975, more than 36 percent of the people who

reported having ulcers in the previous year did

not see a doctor for that reason. (The proportion with newly reported ulcers who were selfdiagnosed is not given. ) Many of those who did

see a doctor may have been treated on the basis

of symptoms without a definite diagnosis. The

Health Interview Survey may be an accurate

summary of what the noninstitutionalized public reports, but that is not the same as an ac-
18 ● Background Paper #2: Case Studies of Medical Technologies

curate epidemiologic assessment of a disease

problem.

Cost of Illness

Studies of the cost of peptic ulcer disease are

among the earliest efforts by economists to

assess the costs of individual diseases (14).

Beginning with the very first studies, a basic

distinction was drawn between direct costs

(health system expenditures to prevent, diagnose, and treat the disease) and indirect costs

(economic losses due to morbidity and mortality). Most economic studies measure the indirect

costs of illness in terms of loss of productivity

due to disability from disease and loss of future

productivit y due to premature death.

The same basic categories of direct and indirect costs continue to be used in contemporary

economic analyses of the cost of illness (31,114).

Most researchers take an aggregate approach to

measuring direct costs of disease, using data

from third-party payers, NCHS, and other hospital and physician surveys, and estimating

total expenditures for a given disease population

in a given time period, usually 1 year; we will

return to these methods shortly. First, however,

we will mention patient-specific alternatives to

measuring direct costs of illness.

One alternative is to trace over time expenditures for a cohort of patients with a particular

disease. As far as we know, no such studies of

ulcer disease have been published, but at least

one study now under way at the University of

Wisconsin may produce useful information of

this sort (58). We comment on this study b y

Weisbrod and Geweke in our discussion of

cimetidine. Such cohort studies have the advantage of being patient-specific and may show

relationships between interventions and expenditures at one point in time and subsequent clinical courses and health expenditures. Cohort

cost studies thus could complement other research, possibly as a part of longitudinal studies

of the clinical course of disease.

A second patient-specific approach is to study

the cost of treating episodes of illness. Duodenal

ulcer disease was one of eight medical conditions studied in this way by Scitovsky and McCall (128), These investigators defined an

episode of duodenal ulcer illness as a 6-month

period beginning with the date of diagnosis of

duodenal ulcer. They assessed the cost of treating episodes of duodenal ulcer disease for

nonhospitalized patients treated at the Palo Alto

Medical Clinic in 1964 (35 patients) and in 1971

(27 patients). In constant dollar terms, the

overall cost of treating ambulatory patients

with duodenal ulcer declined slightly (but not

significantly) between 1964 and 1971. The

average number of physician visits per patient

during the defined 6-month episode of illness fell

from 4.7 in 1964 to 3.8 in 1971. The average

number of X-rays also declined slightly. These

decreases were nearly offset by increased

expenditures for drugs.

Patient-specific studies are very useful for

many purposes, but they are not intended to

provide a cross-sectional view of all costs for all

patients with ulcer disease in a given time

period. Providing such a view is the aim of

studies that take an aggregate approach to estimating direct costs of disease.

In two recent studies of the cost of ulcer

disease discussed below, the indirect costs of

ulcer disease were measured by using the

“human capital” approach of estimating losses

in productivity attributable to the disease. A

number of philosophical objections have been

raised to the “human capital/lost productivity”

approach to valuing lives, e.g., productivity

measures omit consideration of pain and suffering. Alternative methods for valuing life, such

as a “willingness-to-pay” approach, have been

used (1), but not as often as the human capital

approach. Over the past 20 years, the sophistication of lost productivit y estimates has increased considerably, and now may include the

discountin g of future earnings, the adjustment

of future earnings for productivity gains, adjustments for labor force participating rates,

and calculation of productivity loss for people

performing unpaid housework (31), In addition

to the sophistication of analysis, a second major

difference between recent studies of the cost of

ulcer disease and the earliest studies 20 years

ago is the greater amount of information now

available about the prevalence, distribution,
and health consequences of the disease. As

discussed in the previous section of this case

study, however, uncertainty about the evolving

epidemiology of ulcer disease is a major source

of discrepancies in contemporary estimates of

the cost of the disease.

One of the two recent analyses of the cost of

ulcer disease that we will now discuss was

undertaken as part of the NCDD assessment of

the socioeconomic impact of digestive diseases

(4). The other analysis was prepared at SRI

under contract with Smith Kline & French Laboratories by Von Haunalter and Chandler

(146). Both the NCDD and SRI studies estimated the cost of ulcer disease in 1975, and we

focus primarily on those figures. In addition,

the SRI study projected estimates for 1977; these

served as the basis for a major cost-effectiveness

study of cimetidine (the study by Robinson

Associates (121)) that is reviewed in another

part of this case study.

The costs of peptic ulcer disease in 1975, as

estimated by NCDD and SRI, are summarized

in table 6. The total cost (direct and indirect)

estimated by NCDD is approximately $1.3

billion; the estimate by SRI is approximately

$2.6 billion.6 Table 6 also shows a “midpoint

estimate” of approximately $2 billion. We

believe $2 billion to be a defensible overall cost

estimate, for reasons we shall explain. Peptic

ulcers accounted for less than 1 percent of total

costs of all illness in 1975 (114), and, according

to NCDD figures, health system expenditures

for ulcer were approximately 9 percent of health

expenditures for all digestive diseases in 1975.

Of the total $2 billion costs for ulcer disease,

just under half are attributed to health system

costs (direct costs); the rest are attributed to lost

productivity due to premature mortality and to

morbidity (indirect costs).

A comparison of the NCDD and SRI estimates by cost category reveals that the discrepancy between them is largely due to differences

in the indirect costs attributed to morbidity (see

‘Smith Kllne & French markets c]metlcilne.

*Peptic ulcer cilsease was t~n ly IIne 01 n umert~u~ digestive

diseases t(~r which NCDt) dcvelt~ped cost estimates. The auth(lrs

(~t the NCDD rep(~rt ( 4 ) +tate c]ea r] v that they c(~n>i (]er the] r

est I ma tes to be con scrva t I ve.

Table 6.—Costs of Ulcer Disease in 1975 as

Estimated by NCDD and SRI

(millions of dollars)

Approximate

NCDD SRI midpoint

estimates estimates estimates

Direct costs

Hospitalization . . . . . $501 $ 803 $652

Physician visits . . . . . 123 240 182

Drugs . . . . . . . . . . . . .

1

100

Nursing home care . . 102a

11

}

108a

Other professional 3

Subtotal . . . . . . . . . $726 $1,157 $942

Indirect costs b

Mortality. . . . . . . . . . $369 $ 357 $ 369c

Morbidity . . . . . . . . . . 179d 1,116 648

Subtotal . . . . . . . . . 548 1,473 1,017

Total ... ... ... .$1,274 $2,630 $1,959

aT’hl~ ~um represents tfle total for drugs, nursing homes, and other PrOfeSS~Onal

costs Figures were not broken down further

bFuture earnings discounted at 25 Percent

cThe fllgher NcDD figure IS adopted for reasons explalned In the text

dThls figure ,s imputed from Information supplled In the NCDD rePort

SOURCES NCL)D estimates: T P Almy, et al , “Report of the Workgroup on the

Socloeconomlc Impact of Dlgestlve Diseases of the Subcommittee

on Epldemlology and Impact. ” In Report to fhe Congress of the

Urr/fed .Sf.sfes of fhe Nat/ona/ Comm/ss/on on Llges(we Diseases,

1979 (4)

SRI estimates: G Von Haunalter and V V Chandler, Cost of U/cer

D/sease In Me Un/fed Sfafes, 1977 (146)

table 6). In addition, SRI’s estimates of direct

costs for hospital and physician services are

notably higher than NCDD’s (see table 6).

Closer examination of the sources of these

discrepanices in direct cost estimates reveals

variation in the two studies’ analytic methods,

as well as shortcomings in data needed for such

cost estimates.

Medical care costs attributable to a particular

, disease may be estimated in two ways: 1) by a

“top-down” approach that begins with total expenses for all disease and imputes to a particular

disease the proportion of costs equal to the proportion of total units of service used by patients

who have the disease; or 2) by a “bottom-up”

approach that prices and sums the units of service consumed by patients who have a particular

disease. Each approach has its strong points,

and ideally, the two would corroborate each

other. In general, the top-down approach is

simpler; by definition, the sum of all top-down

estimates for each disease equals the total

expenditures for all disease. Theoretically, the

same would be true for bottom-up calculations,

but such calculations are typically undertaken
for a single disease only, and potential inconsistencies between known total expenditures

for all disease and the sum of disease-by-disease

expenditures bottom-up calculations remain

untested in typical bottom-up calculations.

NCDD and SRI both used a bottom-up approach to estimate hospital costs due to ulcer

disease, but differed in the detailed assumptions

they employed. NCDD began with the number

of hospital days for each ulcer diagnosis obtained by the Hospital Discharge Survey of

NCHS, and multiplied that number by the

average charge per hospital day, The average

was obtained from Blue Cross/Blue Shield

figures for Federal workers and from medicare

data for patients over 65 years of age. SRI also

began with NCHS figures on numbers of discharges, but it used a more complicated calculation that involved an estimated proportion of

surgical and nonsurgical cases from the Commission on Professional and Hospital Activities

(CPHA), an allocation to hospitals of different

sizes based in part on American Hospital Association data, and estimated daily costs based on

information from disparate sources combined in

an unspecified manner. The end result of SRI’S

calculation was an estimate of hospital costs

($803 million) that is approximately 60 percent

larger than NCDD’s estimate ($501 million).

Further exploration of the discrepancy between

the two figures would require more details

about the calculation:; than was provided in

either report. Interestingly, and usefully, SRI

also applied a top-down cross-check using estimated hospital expenditures for 1975 and the

proportion of ulcer hospital days to total hospital days, and came up with an estimated cost

of $738 million, reasonably close to our $652

mill ion midpoint estimate for this cost component.

To estimate the cost of physician services,

NCDD used a top-down approach, multiplying

the cost of all physician services for fiscal year

1975 by the proportion of total visits attributable to ulcer. SRI used a bottom-up approach,

multiplying units of service (computed separately for initial and followup visits) by unit costs,

estimated on the basis of multiple sources. SRI’s

estimate for physician visits for ulcer disease

($240 million) is approximately double that obtained by NCDD ($123 million) and, if correct,

would imply that a physician visit for ulcer

disease is twice as expensive as a typical physician visit. Although this seems unlikely, it is impossible to judge the difference in the cost of

physician visits without a more comprehensive

analysis. We settled on a $182 million midpoint

estimate of the cost of physicians’ services as a

reasonable compromise.

Estimates for remaining direct costs are comparable in the NCDD and SRI studies. We have

imputed the NCDD figure of $102 million from

a more global estimate for selected digestive

diseases that included ulcer disease and was

adopted by NCDD (113). Summing the above

components for each report, we find that the

estimated direct costs presented in the two

reports differ by more than $400 million:

NCDD, $726 million; SRI, $1,157 million. Our

final midpoint estimate is $942 million.

Indirect cost estimates for ulcer mortality loss

are straightforward. NCDD and SRI used identical methods to estimate lost future earnings

from death due to ulcer. The small difference in

the two studies’ figures for mortality loss

(NCDD, $369 million; SRI, $357 million) is

presumab l y due to the fact that SRI used

smaller, preliminary mortality figures (6,840

deaths) rather than the final NCHS figures

(7,245 deaths) that NCDD used. We have

adopted NCDD’s $369 million estimate.

The very large difference in the NCDD and

SRI studies’ estimated ulcer morbidity costs

(NCDD, $179 million; SRI, $1,116 million)

stems from several sources. Most important,

SRI attributed to ulcer disease morbidity as

estimated in the Health Interview Survey conducted by NCHS in 1975. As discussed earlier,

the Health Interview Survey estimates are based

on the responses of people interviewed at home

who say they have had an ulcer at some time

during the past year. These estimates are inconsistent with other evidence for the declining

prevalence of ulcer disease, and they almost

surely overestimate morbidity due to the disease. Furthermore, SRI assumed that the economic effects of work loss are distributed by age
in the same way the disease is distributed. Since

older patients tend to lose more days of work

and earn less per day, the assumption of uniform effects inflates the actual productivity loss.

This flaw is acknowledged in SRI’s report, but

no correction or sensitivity analysis is offered.

Ulcer patients who continue to work might have

lower productivity, and this effect, also omitted

from SRI’s calculations, would increase the actual loss of productivity due to ulcer disease and

tend to offset the effect of the assumption about

age distribution.

NCDD considered and expressly rejected

using data from the Health Interview Survey,

because “there were also serious questions

raised by experts in digestive diseases about the

validity of the self-reported diagnosis-specific

morbidity information” (4). Instead, NCDD accepted a more global estimate of morbidity loss

due to 15 different digestive diseases, including

liver disease, gallbladder disease, and hernia

(113). The NCDD figure for morbidity loss due

to ulcer disease shown in table 6 is approximately 6 percent of that total, a percentage equal to

the ratio of the mortality cost for ulcer compared to that for all 15 diseases.7 The NCDD

report also refers to data collected for an earlier

review of the medical and socioeconomic importance of digestive disease, published by

Almy and his coworkers (3). That earlier

publication included data on absenteeism due to

digestive disease at a large northeastern U.S.

manufacturing company during the 13-year

period from 1959 to 1972. In persons who

missed 3 or more days of work during that period due to 1 of the 15 digestive diseases covered

by the NCDD morbidity estimate, more than 20

percent of days lost were attributed to ulcer. We

do not propose translating such figures, obtained over a 13-year period from one large

firm, to a national estimate of days of work lost

in a later year. However, if ulcer disease does

account for 20 percent of the total morbidity

costs assigned to the 15 digestive diseases in the

NCDD report, the NCDD morbidity figure

would be very close to our midpoint estimate of

$648 million.

The magnitude of indirect cost estimates is

very sensitive to the rate at which future costs

are discounted. Both NCDD and SRI discounted

future earnings at 2.5 percent, although NCDD

also presents some alternative calculations at a

10-percent discount rate. Economists agree

more on the appropriateness of discounting

than on the appropriate rate to employ, but 2.5

percent is at the very low, end of the spectrum.

The smaller the discount rate, the higher the

present value of future earnings and the higher

the apparent indirect cost of illness. For example, the “present” value of lifetime earnings for a

32-year-old man in 1975 was $148,195 at a 2.5-

percent discount rate and $176,882 at a IO-percent discount rate (4). This is not a differential

point between the NCDD and SRI analyses,

since they both used the same low discount rate,

but the reader should be aware of the large difference a change in the discount rate can make

and be wary of unadjusted comparisons between these and other cost-of-illness studies that

may use different discount rates. In addition,

“present” values are usually expressed in terms

of dollars in the base year. Estimates discounted

to different base years will differ in part because

of inflation and are directly comparable in resource cost terms only if adjusted into constant

dollars.

In the SRI analysis, Von Haunalter and

Chandler extrapolated their estimated costs to

1977 (expressed in 1977 dollars) by assuming

variably inflated rates for different unit costs of

medical care and a 2-percent annual increase in

the number of persons with ulcer disease (see

table 7). The presumed 2-percent annual increase, based on responses to the Health Interview Survey in 1968 and 1975, is contrary to all

other indicators of the changing epidemiology

of ulcer disease; it is also contradicted by subsequent preliminary data obtained in the 1978

Health Interview Survey (see table 5, p. 17). The

presumed growing population with ulcers is also

treated by Von Haunalter and Chandler as

having the identical age distribution and spectrum of disease severity as assumed for the

population in 1975. Their assumptions about
22 ● Background Paper #2 Case Studies of Medical Technologies

Table 7.—Costs of Ulcer Disease in 1975 and 1977 as

Estimated by SRI (millions of dollars)a

— —

1975 1977

Direct costs

Hospital care. . . . . . . $ 803 — $1,072 —

Physicians . . . . . . . . . 240 — 283 –

Drugs . . . . . . . . . . . . . “loo — 113 —

Nursing home care . . 11 — 15 —

Other professional . . 3 — 3 –

Subtotal . . . . . . . . . $1,157 440/ o $1,48 6 460/0

Indirect costsb

Mortality. . . . . . . . . . . 357 — 408 —

Morbidity . . . . . . . . . . 1,116 — 1,330 —

Subtotal . . . . . . . . . 1,473 56% 1,738 54%

Total . . . . . . . . . . $2,630 1000/0 $3,224 1000/0

aFl~Ur~~ fOr 1975 and 1977 are expressed In terms of dollars In the re’

spectlve base years, not In constant dollars

SOURCE Adapted from G Von Haunalter and V V Chandler, Cos/ of U/cer

D}sease In rhe Un//ed Stales, 1977(1 46)

these characteristics of the presumed growing

ulcer population are questionable for reasons

discussed in the section of this case study above

on epidemiologic patterns of peptic ulcer

disease. Von Haunalter and Chandler’s projection of the population with ulcers to 1977 thus

compounds the problem of overestimation of

the costs of ulcer disease, particularly indirect

costs. Some specific estimates that feed into

direct costs are also Inappropriately projected

upward. For example, the percentage of hospitalized patients undergoing surgery for ulcer

disease is presumed in the analysis to increase

between 1975 and 1977. According to data from

both NCHS and CPHA (42), however, the percentage actually decreased (see table 8).

Summary

We may summarize the salient clinical and

epidemiologic features of peptic ulcer disease as

follows,

Ulcers probably have multiple causes, but

gastric acid and pepsin appear to be necessary

ingredients. Epigastric pain is often a prominent

symptom of peptic ulcers, but the clinical presentation is variable. Furthermore, typical ulcer

symptoms may be caused by conditions other

than ulcers. A definite diagnosis requires direct

visualization by endoscopy or radiographic

imaging of the ulcer. Specific treatment of ulcer

disease is directed at reducing the presence or effects of gastric acid.

Ulcer disease is a chronic condition with

spontaneous remissions and recurrences. Rates

of complication and mortality from ulcers are

relatively low. Excessive mortality appears to be

present only in the first year or so following

diagnosis. Little reliable information exists

about the natural history of ulcer disease in the

general population.

Peptic ulcer is a common condition that affects millions of Americans at some time during

their lives. The best available epidemiologic

evidence suggests that about 250,000 Americans

develop new peptic ulcers each year. New duodenal ulcers are more than four times as common as new gastic ulcers. Some studies have

found that the incidence of duodenal ulcer rises

gradually with age, others have found that it remains fairly constant after age 35. After age 40,

Table 8.—NCHS and CPHA Data on Number of Selected Surgical Procedures (partial Gastrectomy, Vagotomy)

in the United States, 1966-78

.— — —.———

Partial gastrectomy –

——

Vagotomy Total —

Year NCHS CPHA NCHS CPHA NCHS CPHA —

—

1966 . . . . . . . . . . 74,500

—.—.—

— 61,200 — 135,500

1970 . . . . . . . . . . 55,800

—

59,000 62,800 30,000 118,600 89,000

1971 . . . . . . . . . — 57,000 — 28,000 85,000

1972 . . . . . . . . . . 63,300

—

52,000 59,300 24,000 122,600 76,000

1973 . . . . . . . . . . — 52,000 — 27,000 79,000

1975 . . . . . . . . . .

—

53,300 45,000 52,800 23,000 106,100 68,000

1976 . . . . . . . . . . 54,200 45,000 48,300 16,000 102,500 71,000

1977 . . . . . . . . . 51,100 37,000 45,500 19,000 96,600 56,000

1978 . . . . . . . . . . 39,700 29,200 29,200 17,000 68,900 46,000

—. ——————————

sOURCES fVCHS data: National Centfr for Health Statistics, National Hospital D!scharge Survey, Hyaltsvllle, Md

— —

CPHA data: Commlsslon 01 Professional and Hospital Acttvltles data compiled by J D Elashoff and M I Grossman, 1960 (42)
the incidence of gastric ulcer appears to rise

more dramatically than the incidence of duodenal ulcer. Duodenal and gastric ulcers are epidemiologically distinct. Several lines of clinical

and epidemiologic evidence suggest that over

the past 20 years the occurrence of new ulcers

has declined, or ulcer disease has become

generally less severe than it was at one time, or

both.

The basis for some estimates of the costs of

ulcer disease and benefits of treatment is the

Health Interview Survey of NCHS. Results of

the survey, based on self-reported conditions in

a household survey, however, appear to overestimate the occurrence and consequences of

ulcer disease.

We estimate that the costs of ulcer disease in

1975 were approximately $2 billion (see table 6,

p. 19). Just under half of this total was due to

health care expenditures (direct costs), and the

remainder was due to productivity losses from

morbidity and mortality (indirect costs). our

estimate is based on a review of two independent analyses of the costs of ulcer disease, one

prepared by NCDD (4) and the other by SRI

(146). The NCDD and SRI studies estimates Of

the total costs of ulcer disease in 1975, $1.3

billion and $2.6 billion, respectively, differ by

approximately $1.3 billion. The approximately

$400 million difference between the two studies’

direct cost estimates (NCDD, $726 million; SRI,

$1,157 million) arises in part from differences

in the studies’ methodologies (top-down v.

bottom-up calculations) and in part from differences in their more detailed assumptions and

procedures. The approximately $900 million

difference in the two studies’ indirect cost estimates (NCDD, $548 million; SRI, $1,473 million) reflects differences in the two studies’ projected morbidity losses. The higher estimate is

CIMETI DINE

Physiologic Rationale and

Development

The major physiologic stimulant to acid

secretions in humans is the ingestion of food,

based on data from the Health Interview Survey, which is an inflated indicator of diseasespecific morbidity. In both the NCDD and SRI

studies, estimates of indirect costs are based on

the relatively low discount rate of 2.5 percent,

although the NCDD report also supplied estimates based on a lo-percent discount rate. SRI

also projected an estimate of peptic ulcer costs

in 1977. Because of unwarranted assumptions of

growth in the morbidity of ulcer disease and the

use of more expensive resources, the problem of

overestimated costs is compounded for 1977.

We have briefly noted alternatives to crosssectional expenditure assessments of the direct

costs of illness, including tracking patient cohorts over time and measuring costs of treating

episodes of illness. Results of a study of the latter type in one setting found that an episode of

duodenal ulcer disease cost approximately the

same to treat in 1971 as in 1964, in constant

dollar terms.

The human capita] approach is the principal

method used to assess indirect costs of illness. In

general, lost productivity is measured as the

present value of discounted stream of future

earnings. Use of a smaller discount rate increases the present value of future earnings,

thereby increasing apparent costs of illness due

to morbidity and premature death.

The next four parts of this case study deal

with the evaluation of cimetidine in peptic ulcer

disease. We begin with background on the development and dissemination of cimetidine.

Then we explore current understanding of the

costs and benefits of this drug in the treatment

of peptic ulcers, using the general benefit-andcost model as a framework. Finally, we critique

a major report on the costs and benefits of cimetidine and offer a few suggestions for further

research.

but three chemical substances in the body are

also known to stimulate acid secretion in the

stomach: acetylcholine, gastrin, and histamine.

The first two are clearly involved in the physiologic release of acid; histamine appears to
24 Ž Background Paper #2: Case Studies of Medical Technologies

potentate the action of other acid stimulants

(136). Even before the physiologic role of histamine was well understood, some researchers

believed that a drug that would block histamine

stimulation of gastric acid would be of great

value in the treatment of ulcer disease. Conventional antihistamines have no effect on histamine receptors in the stomach.

By the mid-1960’s, J. W. Black and his colleagues at the British laboratory of Smith Kline

& French Laboratories (the pharmaceutical division of SmithKline Corp. ) had set up a research

program to develop new kinds of histamine

blockers. Their strategy in this effort was similar to that which had led to their successful

development of beta-adrenergic blockers, namely, systematic chemical manipulation to create

nullifiers of the parent drug’s effects (136). They

reported their first successful effort in 1972 (12).

This work demonstrated the existence of a

new class of histamine receptors, designated H2

-

receptors, which were distinct from the classic

H1

-receptors. The new histamine antagonist,

called burimamide, was very effective in suppressing stomach acid production, not only in

response to histamine, but from other stimuli

as well, Burimamide had to be injected to be effective, and it was supplanted by an orally active Hz-receptor antagonist, metiamide. This

drug was used in human trials in 1974, but was

abandoned when it was found to cause granulocytopenia and agranulocytosis (growth of

fewer white blood cells than normal) and at

least one fatality (24,45). The chemical metiamide possessed a thiourea side chain that was

believed to be the offending component, and it

was replaced by a cyanoguanidine chain. The

result of this chemical manipulation was the

third H1

-receptor antagonist, cimetidine (SKF

Tagamet®). 8 Along the way to the discovery of

.—— ————-.

“The structural similarities of histamine and H, antagonists are

evident from their chemical structures. — — — —

Structure

Compound

name Imidazole ring Side Chain (R)

Histamine A{ HN + N -C H2 CH2NH2

Burimamide HN ~Hr{ N -CH2CH2CH2CH2CH2CH2CH2NHCNHCH,

CH, 1{

x

s

Meteamide HN + N -CH2SCH2CH2NHCNCH ,

Lti, R !+

Cimetidine HN w@ N -CH2SCH2CH2NHCNHCH ,

N-C = N

cimetidine, Black and his colleagues developed,

tested, and rejected more than 700 different

compounds (135).

Cimetidine powerfully inhibits all phases of

gastric acid production. The drug not only interferes with histamine-stimulated acid output,

but also inhibits the effects of gastric and

acetylcholine. Preliminary studies found that a

300 mg oral dose of cimetidine reduced nocturnal and basal acid secretion by 90 to 95 percent (74,97). Cimetidine also lowers the acid

response to food by 70 percent, a reduction

twice that ach

(46,120).

Diffusion

After prelim

leased for use

eved by anticholinergic agents

nary trials, cimetidine was rein Great Britain in November

1976. FDA recognized the clinical promise of

cimetidine and rated it 1A, FDA’s highest classification, meaning the drug is a new molecular

entity believed to represent a major therapeutic

advance over other drugs (47). FDA approved

cimetidine on August 16, 1977 (50), for up to 8

weeks use in patients with duodenal ulcer disease and in patients with hypersecretory conditions such as Zollinger-Ellison syndrome, systematic mastocytosis, and multiple endocrine

adenomas. Although cimetidine is not yet officially approved in the United States for longer

term use, some physicians use it for more than 8

weeks in patients with duodenal ulcer (7).

The use of cimetidine spread rapidly in U.S.

clinical practice. By the beginning of 1978,

private practitioners prescribed cimetidine in

approximately 40 percent of ambulatory visits

made by patients with duodenal ulcers, By

March 1978, the proportion of such visits resulting in a prescription for cimetidine reached approximately 60 percent, where it has remained

since that time. A substantial fraction of total

ambulatory use of the drug, perhaps as much as

half, is for patients with acid reflux, gastritis,

gastric ulcer, or problems other than duodenal

ulcer. 9

“Estimates based on figures published by the National Disease

Therapeutic Index, which obtains reports of clinical practices from

a sample of private practitioners.
Case Study #11 Benefit-arid-Cost Analysis of Medical Interventions. The Case of Cimetidine and Peptic Ulcer Disease ● 25

The amount of cimetidine used by hospitalized patients is more difficult to estimate directly, but such use is widespread. In addition to being used in patients with ulcer disease, the drug

has been used to prevent and treat stress-related

gastritis and bleeding (39,100). Many physicians

are probably using cimetidine in seriously ill patients who are susceptible to gastrointestinal

hemorrhage (48). A recent randomized trial of

patients hospitalized in an intensive care unit

found that regular antacid therapy is more effective than cimetidine in preventing gastrointestinal bleeding (117).

From a commercial viewpoint, cimetidine is a

spectacularly successful product. In 1977, cimetidine was marketed in 65 countries; in 1978, it

was sold in 90 countries. In 1977, SmithKline

reported sales of gastrointestinal drugs of $90.5

million; in 1978, sales of these drugs were $315

million. In its 1978 annual report, SmithKline

stated that Tagamet® was its most important

single product (135). Worldwide sales to hospitals and pharmacies in 1979 probably exceeded

$400 million. This translates into a rough estimate of 10 million patients per year consuming

cimetidine worldwide .10 A conservatively estimated 1.5 million to 2 million ambulatory U.S.

patients with ulcer disease and ulcer-like symptoms were treated with cimetidine in 1978.11

Cimetidine has thus become one of the most

widely used pharmaceuticals in the world in a

remarkably short time. Part of the reason for

this success rests in the widespread prevalence

of ulcer disease and ulcer-like symptoms. SmithKIine pioneered and persevered in developing

and marketing a new class of pharmaceutical

agents. Furthermore, as discussed in the next

part of this case study, a substantial number of

controlled trials attest to the effectiveness and

relative safety of this drug in the treatment of

ulcer disease.

10This estimate follows from high and low estimates, as shown:

High estimate Low estimate

Retail value of sales $500 million $300 million

– Retail price per tablet $0.25 $030

= Number of tablets (A) 2 billion 1 billion

Weekly number of tablets 28 28

x Mean weeks of treatment 5 6

= Number of tablets patient (B) 140 168

Estimated number of patients (A/B) 14,300,000 6,000,000

11This estimate is based on a conservative projection of the numbers of Americans living at home who report ulcer disease in 1968

and 1975 and the proportion who visit their physicians for this

problem at least once in the year (36).

THE BENEFIT-AND-COST MODEL APPLIED TO CIMETIDINE

Elements in the Analysis

The major components of the benefit-andcost model presented earlier in this case study

are shown in table 9. Listed under each component are a number of measures pertinent to

cimetidine. Ideally, benefit and cost estimates

would be made separately for each class of patients that might be treated with cimetidine. The

basis for separating groups of patients could be

demographic features (e.g., age, race, sex), clinical diagnosis (e. g., duodenal ulcer, gastric

ulcer, Zollinger-Ellison syndrome), or stage of

disease (e.g., number of days since diagnosis,

previous treatments, complications).

Figure 4 is a paradigm decision-tree that displays the sequence of decisions and chance

events that follow from the initial choice of intervention in a particular group of patients with

ulcer disease. Clearly, the model requires a very

large amount of data. It is not possible in this

review to discuss potential sources of data for

every estimate that follows each choice of strategy. Rather, we select for discussion the major

elements of information required by the model

and the available evidence.

Our primary emphasis is on patients with

duodenal ulcer, the most common form of ulcer

disease; we discuss patients with gastric ulcer in

less detail. In addition to being used in these patients, cimetidine is sometimes used in patients

with gastrinoma. 12 The traditional treatment for

patients with gastrinomas includes gastrectomy

I zThlS is a ~asl rin-secret ing tumor, usual ]y located In the Pancreas. It causes the Zoll inger-Ell ison syndrome of severe ulcers, intractable pain, and diarrhea. First described In 1955, the ZollingerEllison syndrome has been recorded in more than 2,000 cases in the

literature (101 }.
26 ● Background Paper #2: Case Studies of Medical Technologies

Table 9.—Components and Measures of

Components in a Benefit-and-Cost

Analysis of Cimetidine

Clinical effects

Short-term

● Healing

● Relief of symptoms

● Side effects and

adherence

● Complications

● Recurrence

Long-term

. Recurrence

● Side effects and

adherence

● Complications

Health system effects

Medication

● Antacids

● Anticholinergics

. Diet

. Other

Diagnostic tests

Ž Laboratory

● Monitoring chemistries

. Imaging

—X-ray

—Endoscopy

● Physiologic function

● Gastric acid

Physician visits

● Number/time period

Hospitalization

● Number/time period

● Duration

Surgery

● Number/time period

● Typ e

Other

● Non-M. D. provider visits

● Nursing care

Outcome

Health

. Mortality

—Number of deaths

—Age-adjusted mortality

—Years of life lost

● Morbidity

—Days and severity of

pain

— Days of disability

Resource costs and savings

● Days of work lost

—Premature death

—Temporary and

permanent disability

● Cimetidine purchase

● Implications of health

system effects

(excision of the whole or part of the stomach)

time of surgery for the primary tumor, but

cimetidine has been employed successfully as an

alternative to gastrectomy in these patients

(99,138). Because of the rarity of gastrinoma as

a cause of ulcer disease, the costs and benefits of

the use of cimetidine in patients with this disease

are not significant from a societal viewpoint.

Since the clinical value of cimetidine for

nonulcer disease such as dyspepsia (94) and upper gastrointestinal hemorrhage (41) is outside

the scope of this report, we do not address it

below. We limit our focus to elements of the

cost effectiveness of cimetidine in peptic ulcer

disease and do not attempt a global assessment

of the value of this drug.

Clinical Effects

No treatment for duodenal ulcer has been

subjected to as many randomized, controlled,

double-blind studies as cimetidine has (68).

These studies of cimetidine vary in their methodological stringency and completeness. In a review of the quality of 10 published, randomized, controlled trials of H2 antagonists (includFigure 4.—Paradigm Decision Tree: Cimetidine and Alternative Intervention Strategies

Patient population: Initial treatment Patient adherence Clinical effect: Clinical effect:

Disease/stage/ I

decision I

to treatment I

Healing (in a given I

Pain relief in a

demographic features

I

regimen (spectrum)

I

time period)

I spectrum

given time period

I

(spectrum)

❑ : Decision node (matters of choice)

O: Chance node (probabilistic events)
Figure 4.— Paradigm Decision Tree: Cimetidine and Alternative Intervention Strategies (Continued)

Clinical effect: Clinical effect: Health system effect: Health system effect: Health system effect:

Treatment side Disease course and Change in use of other Number of physician Tests used (yes/no

effects (spectrum) complications

(short and long I (short and long

medication (by type visits/time period

I of medication relate d

choice for each test

I

I in each time period)

term)

.

.

term) 1 to change in clinical 1 I

Health system effect: I Health system effect: I Outcome. Health I Outcome: Resource

Hospitalization (in each Surgery (by type,

I I

(for each strategy) I

costs (net, for each

time period) i n each time period) strategy)

I I I

❑ Decision node (matters of choice)

O Chance node (probabilistic events)
28 ● Background Paper #2: Case Studies of Medical Technologies

ing several on metiamide), Chalmers, et al. (25)

rated only one “poor”—a record that compared

quite favorably with Chalmers, et al. ’s assessment of clinical trials of other treatments for

ulcer disease.

There is one important methodological difference between the controlled studies of ulcer disease done in the 1970’s and those done earlier. In

the more recent studies, fiberoptic endoscopy

replaced gastrointestinal X-rays as the means

used to verify the presence and healing of ulcers.

This direct visual confirmation of ulcer status

can reduce diagnostic errors and consequent

variability in experimental results. As a result,

endoscopy-controlled studies may be more likely to find statistically significant differences in

the clinical effectiveness of various treatments,

In addition to controlled studies, several symposia have been devoted to cimetidine (22,52,

150), and a number of review articles have appeared in major medical journals (e.g., 48,126).

This work has provided reliable information

that can contribute to estimates of clinical benefits and risks in a CEA, but a number of important areas of uncertainty remain.

Short-Term Clinical Effects

HEALING

At least 10 double-blind, placebo-controlled

studies examining the short-term clinical effects

of cimetidine in patients with duodenal ulcers

have been published in the English language.

Together these 10 studies (see table 10) provide

compelling evidence that cimetidine promotes

healing of duodenal ulcers. Overall, the rate of

healing in 4 to 6 weeks among cimetidinetreated patients was approximately 70 percent,

almost twice the level achieved by placebotreated patients (36 percent). Similar results

were obtained in a half-dozen additional studies

conducted in France, West Germany, Italy, and

Spain (7).

One notable exception to the almost uniformly significant findings of cimetidine’s superiority

over placebo is the large, multicenter U.S. study

by Binder, et al. (11). Among outpatients assessed at the end of 4 and 6 weeks (57 on cimetidine;

54 on placebo), no significant differences were

observed in the proportions healed (67 and 56

percent, respectively). [t is evident that the

statistical conclusions from this study are different from the others not because of worse performance of cimetidine, but because of a substantially higher rate of healing within the placebo group.

It is possible that the patients in the U.S. trial

differed from those in the European studies

either because of differences in the natural

history of the disease in different countries or

because the U.S. subjects tended to be at a different stage of illness. For example, some of the

earlier European studies were restricted to patients who were considered candidates for surgery. The importance of criteria for patient

selection and evaluation, as well as possible

variation in the course of disease in different

countries, was stressed in a Swiss study that

found a very high proportion of patients with

peptic ulcer healing under placebo treatment

(125).

It is possible that the discrepant results are

partly related to differences in antacid consumption. With one exception (108), all the controlled studies permitted ad libitum antacids for

all patients. Patients in the European studies

were usually provided tablet antacids, which

are less potent than the type of liquid antacid

used in the U.S. study (81,106). Overall, the

U.S. patients consumed more antacid than their

European counterparts. More to the point,

among the subjects in the U.S. study, placebotreated patients whose ulcers healed consumed

more antacid than those whose ulcers did not

heal. (Mean antacid consumption was 12 percent higher among inpatients whose ulcer healed

and 112 percent higher among outpatients than

in those whose ulcers failed to heal; differences

in median antacid consumption were 68 and 21

percent, respectively. )

This raises the possibility that a partial

therapeutic effect was realized in the placebo

group in the U.S. study. Underlying this possibility is the assumption that antacids promote

ulcer healing. Antacids have been shown in at

least two endoscopy-controlled studies to have a

greater effect than placebo on healing of duodenal ulcer (93,116). One, a study by Lam, et al.
Case Study #11 Benefit-and-Cost Analysis of Medical Interventions. The Casc of Cimetidine and Peptic Ulcer Disease ● 2 9

Table 10.—Short-Term, Double-Blind, Placebo-Controlled Studies of Cimetidine:

Effect on Duodenal Ulcer Healing

Study

D1

D2

D3

D4

D5 ‘

D6

D7

D8

D9

D10

Cimetidine

Investigator a

daily dose

year/country — .— ——..— (grams)

.

Bank, et al. (6) 1.2

1976/South 1.6

Africa

Bardhan, et al. (8)

1979/United

Kingdom

Binder. et-al. (11) ‘-

1978/United

States

Placebo

Duration Number of Number/o/.

(weeks) patients b

healed

6 19 (19) 8 (420/o)

1

4 46 (50) 13 (28°/0)

2

12 2 (inpatient) 49 (53) 18 (37%)

2 (outpatient) 27 7 (260/. )

4 (outpatient) 27 (103) 13 (48°/0)

6 (outpatient) 27 17 (63%)

Cimetidine v.

Cimetidine

placebo;

significant

Number of Number/o/o difference

patients b

healed (ps0.05)

8 (8) 7 (86%) Yes (p< 0.01)

11 (11) 9 (82°/0)

70 (78) 43 (61 %) Yes (p< 0.001)

64 (72) 45 (70%)

43 (45) 24 (56%) Yes (p< 0.05)

26

}

12 (46%) Yes (p< 0.05)

28 (107) 16 (570/’) No

29 22(76%) N o

—— 

B-lack wood, et al. (13) 1.6 -

6 12 (NA) d

3 (25%) 11 (NA)d

9(82%) Yes (p< 0.025)

1976/United

KingdomC

. —

Bodemar and

Walan(15) 0.8 6 14 (15) 2(1 4°/0) 15 (15) 12 (80°/0) Yes (p< 0.001)

19761 Sweden 1.2 15 (15) 14 (93°/0)

Gray, et al.

West Germany 1 4 20 (20) 5 (20°/0) 20 (20) 17 (850/o) Yes (p< 0.0005)

Hetzel, et al, (76) 1.2 ‘-

6 42 (44) 16 (380/o) 43 (44) 36 (840A) Yes (p< 0,001)

1978/Australia

Moshal, et al. (108)-

1977/South 0.8 6 19 (21) 8 (42°/0)

I

‘

g (40 )

14 (74°/0)

Africa Yes (p< 0.05)

1.2 17 11 (65%)

 —

Northfield and 6 21

)

4 (19°/0) 21 13 (620/o)

Blackwood (1 10) 1.6

(NA)d

(NA)d Yes (p< 0.05)

1977/United

Kingdom e 12 15 4 (27%) 17 15 (88°/0)

Semb, et al. (129)

1977/Norway 1.2 4 20 (20) 12 (60°/0) 20 (22) 17 (850/o) No

aNumber~ [n parentheses refer to references listed at the end of this case study ‘NA Not available

bN “mbers , “ p’rerl~heses are numbers enterln9 study elncludes Patients from study D4

cpatlents Included In sfudy D9

SOURCE Modlf!ed after K D Bardhan C(metldlne (n Duodenal Ulceration “ 1978 (7), and D H. Wlnshlp, “Clmetldlne In the Treatment of Duodenal Ulcer,’” 1978 (154)

(93) found that 20 (77 percent) of 26 Chinese pa- cidental patients (93). The second study, by

tients experienced ulcer healing after 4 weeks’ Peterson, et al. (116) in the United States, used

treatment with aluminum-magnesium antacid higher doses of liquid aluminum-magnesium antablets (25 mEq per dose; seven doses per day). tacid (150 mEq per dose; seven doses per day).

Only 8 of 24 patients treated with placebo ex- In this double-blind trial, 28 (78 percent) of 36

perienced healing at the end of 4 weeks, a sig- patients on high-dose antacids experienced healnificantly lower fraction (p < 0.005). Relatively ing ulcers at 28 days, compared to 17 (45 perlow doses of antacids were effective in the Lam cent) of 38 patients on placebo (p < 0.005). A

study; Chinese patients have similar parietal cell recent British review, prompted by the lesser

masses and lower acid production than Oc- reliance on antacids by British clinicians com-
30 ● Background Paper #2. Case Studies of Medical Technologies

pared to Americans, concluded that antacids

were effective in promoting healing of duodenal

ulcer (106).

Notice that the rates of healing with antacids

in the Lam (93) and Peterson (116) studies (77

and 78 percent, respectively) are much higher

than the healing rate (56 percent) in the placebo

group using ad libitum antacids in the multicenter U.S. trial of cimetidine (11). In fact, the

healing rates with antacids in the Lam and Peterson studies were even higher than the rate of

healing with cimetidine (67 percent) in the U.S.

multicenter trial (11)

This observation leads to an important question: Is cimetidine more effective than a concerted antacid program in promoting ulcer healing? The question is important because a CEA

should seek to compare the incremental effects

of competitive alternatives with one another, as

well as with a do-nothing strategy.

It is statistically unsound and maybe misleading to compare selected groups from different

studies. Fortunately, at least one randomized,

double-blind study has compared cimetidine

with intensive antacid therapy in patients with

duodenal ulcers (80). This multicenter trial

found that in 15 (52 percent) of 29 patients taking antacids seven times daily, and in 40 (62 percent) of 65 patients taking cimetidine, ulcers

healed after 4 weeks .13 The rate of healing in patients taking cimetidine was not significantly

better than the rate in patients taking antacid (p

> 0.1), and the authors concluded that “800 and

1,200 mg of cimetidine daily produced duodenal

ulcer healing and pain relief equivalent to 210

ml of Al-Mg antacid daily” (80).

This conclusion should be qualified. Conventional tests of significance, as employed by these

investigators, are concerned with the risk of

falsely rejecting the null hypothesis of “no difference” between treatments (the a or type I

error). In the Ippoliti study, the observed difference did not justify a conclusion to reject the

hypothesis of “no difference” at a 95-percent

IJThe Cimetidine patients were divided into two groups with different dosage regimens: 33 patients received 1,200 mg daily and 21

(64 percent) experienced healing; 32 patients received 800 mg daily

and 19 (59 percent) experience healing.

level of confidence. However, also of concern is

the complementary error, namely the failure to

reject the null hypothesis when in fact a difference in treatment outcomes in present (the B or

type 11 error) (49). This error, which may be

clinically important, has been overlooked

frequently in trials of the treatment of duodenal ulcer (27), as well as in other medical research (54).

We have estimated that if cimetidine truly

healed 10 percent more ulcers than did antacids

(62 V. 52 percent, the findings of the Ippoliti

study), then, given the number of patients in the

trial, there was less than one chance in three that

the investigators would have found a statistically significant difference.14 This would argue for

a more tentative clinical conclusion. It argues as

well for more extensive research on the questions of the relative clinical effectiveness of

cimetidine and antacids. 15

Several double-blind randomized trials have

compared cimetidine to placebo in patients with

gastric ulcer. These are summarized in table 11.

(A number of additional reports of interim results (150) and studies without endoscopic assessment of healing (95) are excluded. ) Two of

the European trials—one by Bader, et al. (5), the

other by Frost, et al. (56)-—found a statistically

significant improvement in healing with cimetidine at 4 and 6 weeks, respectively. However,

this finding was not borne out in the trials by

Ciclitira, et al. (28) and Dyck, et al. (40). The

latter trials did tend to favor cimetidine (14 percent more patients healed at 4 weeks in the Ciclitira study (28) and 19 percent more at 6 weeks in

the Dyck study (40)), but these differences were

not statistically significant. The point made

above concerning the chance of B-error applies

to the interpretation of these studies as well.

Also pertinent is the earlier discussion of the

tendency of U.S. patients to consume greater

ItMore Preclse]y, given the stated assumptions, the power of the

experiment (1 -~) is estimated to be 0.68.

‘51ppoliti has conducted a second, unpublished randomized trial

of patients with duodenal ulcers, treating 65 patients with

cimetidine and 62 patients with an intense antacid regimen. In this

study, the proportion showing healed ulcers at 4 and 6 weeks was

virtually identical in the two groups. At 4 weeks, the proportions

with healed ulcers were 62 percent for patients taking cimetidine

and 66 percent for patients taking antacids; at 6 weeks, the proportions were 85 percent and 84 percent, respectively (67).
Case Study #11. Benefit-and-Cost Analysis of Medical lnterventions: The Case of Cimetidine and Peptic Ulcer Disease ● 31

Table 11 .—Short-Term, Double-Blind, Placebo-Controlled Studies of Cimetidine:

Effect on Gastric Ulcer Healing

Cimetidine v.

Placebo Cimetidine

placebo;

Cimetidine significant

Investigatora

daily dose Duration Number of Number/O/O Number of Numberl% difference

Study year/country (grams) (weeks) patients b

healed patients b

healed (p<0.05)

G1 Bader, et al. (5)

19771 France 1 4 27 10 (37°/0) 26 18 (690/o) Yes (p <0.02)

G2 Ciclitira, et al. (28)

1977 United

Kingdom 1 4 25 13 (52%) 35 23 (66°/0) NO

G3 Dyck, et al. (40)

19781

United States 1.2 2 28 4 (14%) 29 7 (24%) NO

G4 Frost, et al. (56)

1977/

United Kingdom 1 6 22 6 (270/o) 23 18(78°/0) Yes (p< 0.002)

aNumber~ in parentheses refer to references hsted at the end of this case study

SOURCE Based on J W Freston, “Clmetldlne In the Treatment of Gastric Ulcer R@vlew and Commentav “ 1978 (55), and H R Wulff and S J Rune, “A Comparison of

Studies on the Treatment of Gastric Ulceration With C!met!dlne, 1978 (156)

amounts of antacid, which hinders comparison

among studies done in the United States and

Europe.

The effectiveness of antacids alone in the

healing of gastric ulcer is debatable, with controlled studies reaching conflicting conclusions

(55). One multicenter, randomized study of patients with gastric ulcer in the United States

compared three treatment regimens: cimetidine

alone, antacid alone, and cimetidine plus antacid (43). This study found no significant differences in healing among these three groups at 12

days or 6 weeks. 16 N. control group taking placebo only was included, apparently because of

ethical concerns about withholding a potentially

effective treatment (i. e., antacids) from all patients (55). This omission, subsequently lamented by at least some of the investigators

(53), leaves open the question of whether treatment with either cimetidine or antacids is superior to placebo in patients with gastric ulcer.

In summary, cimetidine has been shown conclusively to promote healing of duodenal ulcer,

and some evidence suggests it is more effective

than placebo in patients with gastric ulcer .17 In

general, European studies have found more favorable results with cimetidine than have U.S.

trials. In patients with gastric ulcers, cimetidine

has not been shown convincingly to be more effective than an intense course of antacids.

Whether cimetidine is more effective than an intense antacid program in healing duodenal

ulcers is still open to question. Of course, promotion of healing is only one aspect of shortterm clinical performance (see table 9, p. 26).

PAIN RELIEF

Seven of the 10 randomized, controlled studies of duodenal ulcer listed in table 10 also compared cimetidine to placebo in terms of pain

relief. Those findings are summarized in table

12. Comparison across studies is complicated by

the variety and subjectivity of measures employed. These measures include frequency of

painful days and nights, number of pain-free

weeks, severity of pain, proportion of asymptomatic patients, and days of treatment required

to achieve symptom relief. An additional complication arises because the time frame for meas-

‘OAfter 12 days, 16 percent of 67 patients taking antacids, 20 percent of 71 patients taking clmetldine, and 25 percent ot 65 patients

taking both experienced ulcer healing: after 6 weeks, the results

were, respect ivei y, 61 percent (JI 62 pat]ents, 59 percent (If 68 patients, and 70 percent (lt 60 patient+.

“In addition to cimetidine and antacids, three other drugs have

been shown in controlled clinical trials to promote healing of

ulcers better than a placebo: colloidal bismuth, carbenoxolone,

and trimipramine (139). None is now used for this purpose in the

United States.
32 ● Background Paper #2 Case .Studies of Medical Technolologies

Table 12.—Short-Term, Double-Blind,

Placebo-Controlled Studies of Cimetidine:

Effect on Duodenal Ulcer Pain Relief

Study a Summary of results

D1

D2

D3

D4

D5

D6

07

Da

D9

D10

Cimetidine group asymptomatic for mean of 4 out

of 6 weeks; placebo group free of symptoms for

a mean of 2.4 out of 6 weeks; in other words,

the cimetidine group had a 44% reduction in

the mean number of weeks with some pain.

(Statistical significance not reported.)

Cimetidine group experienced a 34% reduction in

days with pain and a 36% reduction in nights

with pain compared to the placebo group. Differences in the frequency of pain were significant in each of the 4 weeks of the study (p

< 0.005).

Inpatients: significantly more patients taking

cimetidine than taking placebo had day and

night pain relief at the end of 3 days (61 v. 30%;

p < 0.01); difference not significant at the end

of 1 week (69 v. 55%).

Outpatients: significantly more patients taking

cimetidine had day and night pain relief at the

end of 1 week (45 v. 31 O/.; p < 0.05); difference

not significant after the first week.

Not reported.

Cimetidine group had “significantly lower pain

score” (p range < 0.02 to < 0.1) both day and

night during the first 3 weeks (method of measurement and computation not fully explained).

After 3 weeks, cimetidine group had “significantly” (p < 0.1) less day pain in weeks 5

and 6.

Cimetidine group had significantly more pain-free

days each week of the study (p < 0.01).

Not reported.

At the end of 6 weeks, cimetidine group had significantly more asymptomatic patients (780/’)

than did the placebo group (47°/0) (p < 0.025).

Not reported.

Cimetidine group required significantly fewer days

to achieve symptom relief (8.1 ± 9.9 [S. D.]) than

did the placebo group (20.6 ± 9.1 [S.D.]) (p‹

0.01).

asee table 10 for lnvestlgator, year, and country

urement varies from study to study. Nonetheless, these studies fairly consistently report

greater pain relief with cimetidine than with placebo. Again, the multicenter U.S. trial (11)

shows less striking differences than the other

trials.

The Ippoliti study (80) comparing cimetidine

to antacid found prompt symptom relief with

both treatments (55 percent of cimetidinetreated patients and 58 percent of antacidtreated patients became asymptomatic by day).

At the end of 4 weeks’ treatment, 63 percent of

patients taking antacids and 80 percent of those

taking cimetidine were asymptomatic, a difference that was not statistically significant (p >

0.1).

Placebo-controlled studies of patients with

gastric ulcer varied in the extent to which

cimetidine-treated groups experienced more

rapid or complete pain relief than those treated

with antacids (see table 13). The Englert study

(43) comparing antacids and cimetidine found

similar symptom response in all groups.

Investigators differ in their conclusions about

the correspondence between ulcer healing and

pain relief. Several investigators report a poor

correlation between healing and symptom relief

(e.g., 6,62,108), and others say the correlation is

good (e.g., 8,61,80). Part of the reason for differing assessments may be a difference in what

various investigators consider a good or a poor

correlation. For example, Bardhan (8) found the

association between healing and symptom relief

to be significantly different from what would

have been expected to occur by chance. On the

other hand, the same data show that the ability

of pain relief to predict ulcer healing is not very

strong. 18

As in our discussion of B-error above, this

points out the important distinction between the

interpretation of results based on statistical

criteria and that based on clinical criteria:

Results that fail a test of statistical significance

may still be clinically meaningful; conversely,

statisticall y significant differences may not be

particularl y meaningful clinically. The degree of

association between healing and pain relief is

pertinent to a cost-effectiveness assessment,

because a patient’s decision to return to normal

activity depends at least as much on symptoms

as on the physical repair of the ulcer. If estimates of a drug’s comparative effectiveness in

returning patients to work are based primarily

on healing, they may be misleading insofar as

‘“The probability (If ulcer healing given symptc)m improvement

IS 50 60 = 0.77, and the pr(~babi] I t y of nonhea] ing given no

improvement In symptc~ms is 42/72 = 0..58, These are n[)t ~lar.

ticularly large predictive values. In the Ippoliti study (80), the corresp~~nding values are a bit lt]wer in the first case (42 ’60 = O 70)

and somewhat h]gher in the second (18 20 = 0,90),
Table 13.—Short-Term, Double-Blind,

Placebo.Controlled Studies of Cimetidine:

Effect on Gastric Ulcer Pain Relief

Study a Summary of results

G1 Patients taking cimetidine tended to have more

rapid and greater relief of pain, but differences

were not statistically significant.

G2 Cimetidine-based group had significantly fewer

attacks of pain during each week of the study.

G3 No systematic or significant differences in the

severity or frequency of pain at 2 weeks or at 6

weeks between the cimetidine-treated and

placebo-treated groups.

G4 Group taking cimetidine had fewer days of pain,

but differences were not statistically

significant.

aSee table 11 for Investigator year and country

pain relief and healing do not correspond to one

another, Almy (2) suggests a further possibility

if a patient returns to work after symptoms have

remitted but before healing has occurred: Workdays gained might be lost later on owing to late

consequences of unhealed ulcer.

In summary, evidence from most controlled,

double-blind studies suggests that cimetidine

promotes faster and more complete pain relief

than does a placebo in duodenal ulcer, but not

necessarily in gastric ulcer. An intense antacid

program appears to be about as effective as

cimetidine, but more evidence on this question

is needed. The correspondence between healing

and symptom relief is imperfect: The association is not random, but relief of symptoms is not

a reliable clinical predictor of healing.

SAFETY AND ADHERENCE

No pharmacologic agent is perfectly safe. A

drug’s side effects depend on its toxicity, the

dosage and duration of administration, and the

individual susceptibility of the patient. The importance of side effects of any one treatment

should be judged in relation to the severity of

the disease being treated and the risks of alternative interventions.

Before turning to cimetidine, let us briefly

consider the alternative of antacid therapy as a

baseline. Unlike cimetidine, the Al-Mg antacid

suspensions usually prescribed are, for the most

part, not systemically absorbed. The most common adverse side effect of these antacids is diarrhea, which is related to the dose of magnesium

salts. In studies with intense antacid regimens,

27 percent (80) and 36 percent (43) of patients

taking antacids developed diarrhea. In the

Peterson study (116) comparing antacids with a

placebo, 66 percent of the antacid group and 21

percent of the placebo group were switched for

at least 7 days to an alternative medication

because of diarrhea. Mild diarrhea may not be

very important medically, but this effect, along

with the need for frequent administration, does

discourage patient adherence to high-dose antacid regimens. Aluminum salts bind phosphate

ions, and this may produce hypophosphatemia

in patients who have intestinal malabsorption

problems. This rare consequence may be

countered by selecting a different type of antacid or giving phosphate supplements. 19

Cimetidine in short-term use has been associated with a wide range of side effects. The

manufacturer instituted a formal, postmarked

surveillance system that covered 9,907 ambulatory patients and found a total of 577 adverse

events in 442 patients (4.4 percent of all patients) (59). Only a fraction of the adverse

events were believed to be attributable to cimetidine; for example, 30 of 254 adverse gastrointestinal events occurred in circumstances that

strongly suggested an association with cimetidine. No deaths were attributed to use of the

drug. An extensive review by Kruss and Littman

in 1978 (92) of publications, manufacturers’

files, and submissions to FDA concluded that

cimetidine was safe enough to be used in patients with duodenal ulcer disease for up to 8

weeks, and indeed, this is the use currently approved by FDA. A high proportion of patients

develops clinically insignificant elevations in

serum creatinine which resolves promptly with

cessation of therapy (92). Gynecomastia (excessive development of breast tissue in males)

has been reported in under 1 percent of patients

on short-term treatment; the incidence increases

‘“A ditterent arr~y (Jt metabolic problems may Itlllow use of

calclurn cdrbt~ndte antacid (which 1s abs~~rbed systemical [y ), but

+1 nce this is nc~t usual]}’ presc rlbed hy physician+ in the United

State<. we will not c~~nslder It I urt ht’r
34 Ž Background Paper #2: Case Studies of Medical Technologies

with longer term use (72). Mental confusion

(102), reversible hepatitis (145), and several

cases of severe allergic reaction (33) have also

been reported. Agranulocytosis, the principal

problem with cimetidine’s predecessor, metiamide, has been reported to occur transiently

with cimetidine (32,90). In addition, at least one

fatality due to aplastic anemia has been reported

in association with cimetidine (26).

Recent bacteriological studies of the gastric

juice of patients before and after 4 weeks’ treatment with cimetidine found major increases in

total bacterial counts, including large numbers

of fecal-type organisms, following treatment

(122), This effect, noted after short-term use,

would be of greater concern with long-term use

of cimetidine, as explained below. The principal

determinant of gastric flora in humans is the

acidity of the stomach, and increases in fecal

types of bacteria are found in the stomachs of

achlorhydric patients such as those with pernicious anemia (38). Patients with pernicious

anemia have long been recognized to have a significantly increased risk of developing gastric

cancer (107). Possibly, the increased incidence

of cancer is related to the metabolic activity of

fecal-type bacteria that reduce nitrates and may

lead to the development of carcinogenic N-nitroso compounds in the stomach (123). At present, however, this long-term risk of cimetidine

(or any agent that chronically reduces gastric

acidity) is speculative.

In the past year, new evidence has accumulated concerning the effects of cimetidine on the

reproductive function in males. Earlier animal

studies had clearly shown an antiandrogenic effect of large doses of cimetidine administered for

6 to 12 months (92). During the past year, at

least one case of reversible impotence has been

attributed to cimetidine (155). In addition, a

study of seven patients with ulcer disease, duodenitis, gastritis, or esophagitis found a 30- percent reduction in mean sperm count after 9

weeks of cimetidine treatment; the luteinizing

hormone response to luteinizing hormonereleasing factor was also reduced (144).20 This

“’The mean iperrn c~mnts were 134.3 mllli(>n per ml bet(>re

cvmet tdine and 94.0 mlllif)n per ml at ter treat men t. The in vest ig~t{lrs state that the reduct Ion wa~ 43 percent, but this ~]verstudy included no control group of ill patients

not taking cimetidine. Sperm counts remained

within the wide fertile range, but the antiandrogenic side effects of cimetidine should be evaluated further. 21

Thus, cimetidine used for up to 2 months appears to be a relatively safe drug, but reported

increases and shifts in gastric flora and endocrinologic effects are disturbing. Cimetidine

is more risky than antacids, but less troublesome to the patient. The more extensively a

drug is used, the more difficult it is to impute a

causal relation to sporadically reported side effects or case fatalities. On the other hand, truly

associated but rare side effects can affect substantial numbers of patients if a drug is very

widely prescribed, as is cimetidine. One’s attitude toward the safety of cimetidine depends

in part on the weight placed on the possibility of

unanticipated and remotely occurring side effects such as those that have occurred with other

medications like diethylstilbestrol (75).

COMPLICATIONS

The major complications of ulcer disease are

bleeding from the base of the ulcer, obstruction

due to swelling or fibrosis, perforation through

the intestinal wall into the peritoneal cavity,

and penetration into the pancreatic bed. As

noted previously, these complications are relatively uncommon and rarely occur as the initial

manifestation of ulcer disease.

The principal question of interest here is

whether short-term use of cimetidine alters the

likelihood of near-term complications. Several

British investigators have reported patients who

developed perforation of peptic ulcers shortly

after the cessation of cimetidine therapy

(60,148). An increased risk of perforation following cimetidine therapy is not substantiated

by controlled studies comparing longer term use

of cimetidine and placebo following an initial

course of cimetidine. These studies, discussed in

the section on long-term clinical effects below,

statement is apparently based on dividing the difference in mean

sperm count (40. 3 million per ml3

) by the final, rather than the initial, count,

‘ ‘Additional studies are underw~y, accc~rding to FDA (5 I I.
assess whether maintenance doses of cimetidine

can reduce the likelihood of ulcer recurrence,

ULCER RECURRENCE FOLLOWING SURGERY

Cimetidine has been used to treat ulcers that

recur following surgery for ulcer disease. We are

aware of two randomized, controlled trials of

cimetidine’s effectiveness in preventing ulceration after surgery (71,88). These studies reached

different conclusions. In Britain, Kennedy and

Spencer (88) compared cimetidine with placebo

in patients who had undergone one of a variety

of surgical procedures (including gastrectomy

and vagotomy with and without a drainage procedure) and who, after surgery, had developed

ulcers at various locations (stomach, duodenum, or jejunum). The 12 patients treated

with 1 g of cimetidine daily did not show significantly more healing at 6 weeks than the 12 patients treated with placebo.

A more recent study in West Germany (71)

was restricted to patients who had undergone

partial gastrectomy and developed ulcers at or

near the site of the surgery. After 4 weeks of

treatment, ulcers had healed in six of seven patients treated with 1 g of cimetidine daily, but

none of the eight treated with placebo had healed (difference significant, p < 0.01). After 8

weeks, all seven cimetidine-treated patients, but

only one of eight placebo-treated patients had

healed (difference significant, p < 0.01). The incidence of relapse after cessation of cimetidine

and effects of maintenance on preventing recurrence after surgery have not yet been reported in

controlled trials.

RECOMMENDATIONS FOR TREATING NEWLY

DIAGNOSED, UNCOMPLICATED ULCER

Gastroenterologists differ in their recommended treatment for patients with newly diagnosed, uncomplicated duodenal ulcers. Some,

stressing comparable rates of healing, long experience with antacids, and uncertainties attending any recently introduced drug, recommend

an initial trial of intense antacid therapy (140).

Others, impressed with cimetidine’s performance and concerned about lack of patient

adherence to an antacid regimen, prefer to use

cimetidine (98).

The choice between antacids and cimetidine is

clearly closely balanced. Rather than adopt either approach exclusively, a conscientious clinician might better weigh the choice for each patient individually, taking account of present

uncertainties as well as each patient’s personality and preferences. For example, patients vary

in their willingness to persevere with antacids in

the face of mild to moderately uncomfortable

side effects. In addition, patients, as well as doctors, vary in their attitudes toward known and

unknown risks. Thus, a young man trying to

start a family would surely view possible antiandrogenic effects differently than would a

woman or elderly man.

As times goes on, new evidence may reduce

present uncertainties about the comparative

benefits and risks of cimetidine. Individual patient characteristics and values might still make

the preferred treatment different for different

patients who are all classified in the same general diagnostic category.

Long-Term Clinical Effects

The use of cimetidine beyond the short-term

treatment of ulcer may take two forms: 1 ) intermittent administration if symptoms or ulcerations recur, and 2) maintenance treatment with

the aim of preventing ulcer recurrence.

Cimetidine is probably very commonly used

for intermittent treatment of ulcers (7), but we

are aware of no controlled studies comparing

cimetidine to alternative approaches. One study

(64) suggests that with cimetidine, healing of a

second ulcer is slower than healing of an initial

ulcer. In 25 patients with recurrent ulcers, 5 2

percent healed after 4 weeks of treatment with

cimetidine compared to 76 percent who had

healed within 4 weeks after diagnosis of their

first ulcer. Interpretation of the results of this

study, however, is clouded by differences in the

initial treatment history of these patients and

ambiguity in the report. For example, the 25 patients with recurrent ulcers included a majority

whose first ulcers had been treated with cimeti -

dine and others whose first ulcers had healed

spontaneously. In addition, most of the 25 patients had been maintained on placebo, but an
36 Ž Background Paper #2: Case Studies of Medical Technologies

unspecified number (between 1 and 7) had been

maintained on low-dose cimetidine.

We are aware of no studies comparing maintenance cimetidine to maintenance antacids.

Perhaps it has been assumed that few patients

would adhere to long-term treatment with effective doses of antacids. Grossman (67) suggests

that this might be reconsidered in light of the recent study by Lam, et al. (93), who found that

relatively small doses of antacids given in the

form of tablets were effective in promoting the

healing of duodenal ulcers.

Most research on long-term use has compared

maintenance doses of cimetidine to placebo

(with antacids ad libitum). These studies form

the basis for the following discussion.

ULCER RECURRENCE

Table 14 summarizes the results of six doubleblind controlled studies, published in English,

comparing maintenance cimetidine to placebo

for periods ranging from 80 days to 1 year. Patients in these studies were given 400 or 800 mg

of cimetidine daily. Investigators consistently

report a statistically significant reduction in

symptoms and recurrent ulceration during the

period of treatment in the cimetidine-treated

group compared to those given placebo. The

consistency of results is particularly striking

given the range of criteria used to select

patients —with some studies including patients

with recently treated new ulcers (e. g., 70),

others limited to chronically ill patients (e.g.,

16), and others restricted to patients considered

candidates for surgery (e. g., 64).

The conclusions from these studies are reinforced by a recent review by Burland, et al. (23).

These authors compiled results from 15 doubleblind maintenance trials, either completed or in

progress, involving 695 patients. Overall, the

number developing recurrent ulcers while taking placebo appears to be twice that observed

with maintenance cimetidine. Approximately 10

percent of patients treated with placebo and 50

percent of cimetidine-treated patients remained

in remission during 12 months of treatment.

Table 14.—Controlled Trials of Maintenance Cimetidine in Peptic Ulcer

Ulcer recurrence

Symptomatic relapse (by endoscopy)

Initial Duration Difference

Investigator (premaint.) of maint. Maint. Number Number/% Number Number/% significant

Study year/country treatment (months) treatment analyzed relapse analyzed recur (p <0.05)

M1 Bardhan, et al. (9) 53 cimetid. 6 P bid 31 18 (58%) 27 20 (74%) Yes

1979/United 7 other C 400 mg 29 4 (14%) (p< 0.005)

Kingdom bid

M2 Blackwood, et al.

recurrence

(13) Not 6 P hs 24 12 (50%) 24 21 (88%) Yes

1976/United specified C 800 mg hs 21 8 (380/. ) 21 5 (250/.) (p< 0.0005)

Kingdom

M3 Bodemar & Walan

recurrence

(16)/ 65 cimetid. 12 P bid 36 30 (83%) 36 38 (83%) Yes

1978/United 3 other C 400 mg 32 12 (38%) 32 6 (38%) (P< 0.0005)

Kingdom bid

M4 Gray, et al.(64)

1978/United 52 cimetid. 6 P hs 30 24 (80%) 29 24 [83%) Yes

Kingdom 8 other C 400 mghs 26 11(42%) 22 7 (32%)

M5 Gudmand-Hbyer, Not 12 P bid 25 20(80%) — Yes

et al. (70)

—

specified C 400 mg 26 3(12%) – (p< 0,1301)

19781 Denmark

—

bid

M6 Hetzel, et al. (78) Not 2 2/3 P bid 31 10 (32%)c — — Yes

Australia specified 14 (4570) —

- .

—

C 400 mg 36 0

bid

aNumber~ in parentheses refer to references listed at the end of this case study

bp = pla~eboi c = clrnetldlne;bld = twice daily; hs = at bed!lrne.

CThe repo~ states in the same paragraph both that 10 patients on placebo suffered relapse and that 45 perCer)t of those on placebo had relapsed
Results were identical with 400 and 800 mg of

cimetidine daily.

The performance of different maintenance

regimens may depend on the initial treatment

received by patients. Those whose ulcers have

healed initially with placebo, antacids, or cimetidine may differ in their susceptibility to recurrence. Consider the possibility that patients

with newly developed ulcers fall into two clinically indistinguishable subpopulations, one

(type A) being more resistant to treatment and

prone to relapse than the other (type B). Now

consider the hypothetical experimental situation

illustrated in table 15. Seventy patients in each

of two groups are assigned randomly to initial

treatment with cimetidine or with antacids. In

each group of 70, 40 are type A and 30 are type

B. Both treatments produce healing in 75 percent of type A patients, but cimetidine is twice

as effective as antacids (67 v. 33 percent) in producing healing in type B patients.

After initial treatment, only those patients

who have healed are followed for possible relapse. (In the case of maintenance studies, only

patients initially healed are tested with maintenance therapy. ) Assuming that a given proportion (one-third) of all type A patients and that a

larger proportion (one-half) of all type B patients both relapse within 6 months, then cimetidine-treated patients will appear to be more

prone to relapse (40 v. 38 percent). This can be

true even when, as shown in the last column of

table 15, cimetidine results in a greater fraction

of the initial population of patients remaining

asymptomatic.

Empirical evidence consistent with such an

adverse selection of patients whose ulcers heal

initially with cimetidine may be found in the

results collected by Burland, et al. (23). Among

patients treated with maintenance placebo, 245

(50 percent) of 290 patients initially treated with

cimetidine developed symptomatic re-ulceration, compared to 9 (30 percent) of 30 patients

initially treated with placebo (difference significant, p c 0.05). On the other hand, there may

not be an adverse selection of patients who heal

following cimetidine treatment as compared to

those who heal after antacid treatment. Ippoliti

followed patients with duodenal ulcer who had

been assigned randomly to treatment for up to 6

weeks with a concerted antacid program or with

cimetidine. 22 Among those whose ulcers healed,

the rate of recurrence at 6 months (as determined by endoscopic examination at 3 and 6

months) was 54 percent among the 41 patients

who had been treated with cimetidine and 60

percent among the 35 patients who had been

treated with antacids.

Following cessation of treatment, patients

who had been taking cimetidine begin to relapse

at the same rate as the initial rate of relapse

among patients who were treated with maintenance placebo. This important finding is demonstrated in the study by Gudmand-Høyer, et

al. (70). Once it is discontinued, maintenance

cimetidine appears neither to accelerate recurrence nor to effect any more permanent cure.

“Unpublished study (79).

Table 15.—Results of Treatment With Two Hypothetical Subpopulations of Ulcer Patients:

Type A More Resistant to Treatment and Prone to Relapse Than Type B

Starting population

Initial treatment of patients

Cimetidine -

Total = 70

Type A = 40

Type B = 30

Antacids Total = 70

Type A = 40

Type B = 30

Response to initial

treatment: Number

healed (o/o of those

entered)

Total = 50 (71 O/. )

Type A = 30 (75°/0)

Type B = 20 (67%)

Total = 40 (570/. )

Type A = 30 (750/. )

Type B = 10 (33%)

Relapse in 6 months

after treatment

discontinued: Number Number remaining

relapsed (o/o of initially asymptomatic (0

/0 of

healed) starting population)

Total = 20 (400/. ) 30 (43°/0)

Type A = 10 (33°/0) 20 (50°/0)

Type B = 10 (500/. ) 10 (33°/0)

Total = 15 (380/. ) 25 (36°/0)

Type A = 10 (330/. ) 20 (50°/0)

Type B = 5 (500/. ) 5(1 70/o)

1 L----- --- -_–--- –..–-.––_ -.._. _....__
38 ● Background Paper #2 Case Studies of Medical Technologies

The implications drawn from these studies are

less consistent than are the findings. To some investigators, the high relapse rate after cessation

of treatment “suggests that prolonged cimetidine therapy is necessary to retain most patients

in remission” (76). Others, cognizant of the

potential unknown risks in treatment for longer

than 12 months, wonder whether “those patients would have been better off if surgery had

been advised at a much earlier stage. A year has

been wasted in which they have been taking tablets daily when the end-result was surgery after

all” (Wulff, quoted in 150). But not all patients

who relapse become candidates for surgery, and

a key question is the likelihood of their healing

without surgery. Even if maintenance cimetidine accomplished nothing more than a l-year

delay in surgery, it might be worthwhile for

some patients to defer the small, but definite,

mortality risk from surgery in favor of the risks

of cimetidine for 12 months. Indeed, as a patient’s surgical risk increases, cimetidine’s unknown consequences become more acceptable

(29).

In summary, compared to placebo, maintenance treatment with cimetidine significantly

reduces the chance of ulcer recurrence. Once

cimetidine is discontinued, patients begin to

relapse at the same rate as they would have

without maintenance treatment. We found no

controlled studies of maintenance cimetidine

comparing alternative treatments other than

placebo and no published reports studying periods longer than 1 year of maintenance therapy.

SAFETY

Long-term studies with cimetidine turn up no

important new side effects other than those

mentioned in relation to short-term treatment.

The incidence of gynecornastia may be as high

as 4 percent in patients treated for 2 months to 1

year (131). Presumably, changes in the bacterial

flora of the stomach found after 4 weeks of

cimetidine treatment would persist with longterm therapy (122). As discussed earlier, this

raises the possibility that patients taking

maintenance cimetidine might have an increased

risk of developing gastric cancer. Experienced

clinicians express concern that rare, but severe,

side effects may not be evident in relatively

small controlled trials and that risk of toxicity is

greatly magnified if treatment continues for prolonged periods of time (70).

COMPLICATIONS

Available controlled trials tell us very little

about possible effects of cimetidine on longterm complications of ulcer disease (hemorrhage, obstruction, perforation, and penetration). The reasons rest mainly in the nature of

the disease, absence of reliable estimates of

baseline rates (no randomly selected population

of ulcer patients has been followed over many

years), and the comparative rarity of severe

complications, believed to be not more than a

few percent per year following initial diagnosis

(140).

As stressed by Grossman (70), the size of a

study needed to detect clinically relevant

changes in complication rates would be enormous. If, as he posits, 5 per 1,000 recurrences

result in perforation, and we wanted to detect at

a 0.05 significance level a treatment that would

halve the rate of recurrence, we would need

more than 15,000 patients in each of two experimental groups to have a 90-percent chance

of finding that difference (49).

It may be that insofar as a treatment such as

cimetidine therapy can reduce or delay recurrence, it will reduce or delay complications.

However, insofar as patients at higher risk of

complications are also more resistant to treatment that delays recurrence, reductions in complication rates will be less than reductions in

recurrence. The reasons are analogous to the adverse-selection bias hypothesized above. There

is little convincing evidence that cessation of

cimetidine treatment can promote complications (see earlier discussion), and likewise, there

are no convincing data from clinical trials that

cimetidine reduces complications. Given the size

of studies that would be required, it seems unlikely that compelling evidence on this question

will be forthcoming from controlled clinical

trials.
PENDING APPROVAL BY FDA

At the present time, FDA is considering approval of cimetidine for use longer than 8 weeks

in patients with duodenal ulcer disease. Its advisory committee reportedly recommended in

October 1979 the approval of maintenance

cimetidine for patients who are at “high risk” for

surgery (50). This probably includes both patients who are more likely to require surgery

and patients who are less likely to survive surgery. We understand that final decisions on this

question, as well as revised limits on the approved duration of treatment, are not yet formulated. The principal drawback to longer term

use is the risk of unknown side effects. Available evidence supports the effectiveness of cimetidine in delaying recurrence. Physicians and

patient attitudes toward the unknown risks of

cimetidine will vary, but for those with relatively large and tangible risks from surgery,

cimetidine is likely to be judged as a less dangerous course.

FDA has not yet approved cimetidine for use

in patients with gastric ulcer. This is apparently

related to the conflicting evidence about the efficacy of cimetidine for gastric ulcer (see table

11, p. 31) and to a more general policy concern

about the possible role of nitrosoaminated compounds in the development of cancer.

Health System Effects

Empirical data on the health system effects of

cimetidine are more sparse than available information about clinical effects. Some pertinent

information is available, and several studies are

in progress that may shed more light on these effects, but at the present time, available evidence

is suggestive rather than conclusive. As discussed in the next part of this case study, the

lack of empirical evidence to inform estimates of

cimetidine’s health system effects seriously

handicaps available benefit-and-cost analyses.

Medication

Eight of the 20 placebo-controlled studies of

cimetidine shown in table 16 (D1, D2, D3, D5,

D6, G2, G3, M3) compared antacid consumption among patients in the experimental and

control groups. Five (D2, D5, D6, G2, M3) of

the eight studies were conducted in Europe and

one (D1) in South Africa. In these six studies,

cimetidine-treated patients consumed between

47 and 84 percent less antacid. In the remaining

two studies (D3 and G3), both done in the

United States, differences were less marked, and

there were no consistent trends toward decreased antacid consumption among cimetidinetreated patients.

Possible effects of cimetidine use on the consumption of other drugs have not been reported.

Diagnostic Tests

Insofar as persistent or recurrent ulcer symptoms lead physicians to perform diagnostic

tests, and insofar as cimetidine reduces or delays

symptoms, the drug could result in fewer diagnostic tests if used without the constraints of

controlled triail protocols. It is important to bear

in mind that cimetidine’s effectiveness in longterm use has been tested against placebo, but

not, to our knowledge, against an antacid program or other regimen. To the extent that cimetidine produces biochemical or other abnormalities that physicians choose to evaluate further,

it could increase the number of laboratory tests

performed.

In addition, if physicians felt obliged to screen

for unlikely but potentially serious side effects,

such as granulocytopenia, the number of diagnostic tests in patients treated with cimetidine

could increase. The presence and extent of these

different effects are currently matters for speculation.

Physician Visits

The range of potential effects posited for diagnostic tests applies as well to physician visits.

Secondary induced effects are also possible: If

physicians are visited less often for a principal

problem of ulcer disease, then less medication

and fewer procedures may be used for a less

troublesome problem, such as mild to moderate

joint pain, that in itself might not prompt a person to seek medical care.
40 ● Background Paper #2: Case Studies of Medical Technologies

Hospitalization and Surgery

Costs of hospitalization and surgery are the

largest single component of medical expenditures for ulcer disease (see table 6, p. 19). Hence,

the effects of an intervention such as cimetidine

on the rates of hospitalization and surgery are

particularly important to a CEA.

Because, as discussed earlier, cimetidine was

disseminated widely in a short period of time, it

seems possible that its effects might be reflected

in global trends of hospitalization and surgery.

Data we have compiled and analyzed from

NCHS do indicate an unexpectedly sharp decline in surgery in the first calendar year (1978)

following the introduction of cimetidine in the

United States. According to data from CPHA

compiled by Elashoff and Grossman (42), however, the decline was less precipitous. Hospitalrelated effects that are linked more directly to

the use of cimetidine may emerge in the next few

years from several studies currently in progress,

which we will describe briefly.

Table 16.—Short-Term, Double-Blind,

Placebo-Controlled Studies of Cimetidine:

Effect on Antacid Consumption

Antacid consumption of

cimetidine group compared to

Study a Time period that of placebo group

D1 6 weeks 83% reduction

D2 4 weeks “Significantly” fewer tabletsb

03 First weekc

Inpatients: no differences

Outpatients: 40% reduction

D4 — Not reported

D5 6 weeks 84% reduction

D6 4 weeks 47% reduction

D7 — Not reported

D8 — No antacids permitted

D9 — Not reported

D10 — Not reported

G1 — Not reported

G2 4 weeks 61% reduction

G3 2 weeks No significant differences

6 weeks

G4 — Not reported

Ml — Not reported

M2 — Not reported

M3 12 months 700/. reduction (approximately)

M4 — Not reported

M5 — Not reported

M6 — Not reported

asee tables 10, I 1, and 14 for Investigator, year, and cOuntrY

bscatter PIOIS of antacid consumption presented, no numbers provided or sta.

tlstlcal tests reported.

c Not reported for later weeks of study

Two principal sources of nationwide hospital

data are the Hospital Discharge Survey of

NCHS and the Hospital Record Study of

CPHA. Data from both sources are used in this

analysis. Unless otherwise stated, Hospital

Record Study data are taken from a review by

Elashoff and Grossman (42). Hospital Discharge

Survey data were obtained directly from NCHS

and then compiled for this case study.

Information from NCHS and CPHA is not in

perfect agreement. Estimates in both the

Hospital Record Study of CPHA and the Hospital Discharge Survey of NCHS are based on

samples of non-Federal, short-term hospital

discharges, stratified by hospital size and location. The fraction of records sampled is inversely proportional to hospital size, so that the

overall probability of selecting a particular

discharge is approximately the same for each

class of hospital size. Both sources estimate

discharges, not patients, so multiple admissions

for an individual patient are indistinguishable

from one-time-only admissions.

One major distinction between the two

sources is the difference in parent populations of

hospitals. For the Hospital Discharge Survey,

NCHS selects a representative sample from all

U.S. hospitals. CPHA draws its sample for the

Hospital Record Study from the more than 750

hospitals in its parent file. These hospitals comprise approximately 13 percent of all U.S. hospitals, but they account for nearly 40 percent of

all hospital discharges. Thus, large hospitals are

overrepresented in the CPHA parent file. The

subset selected for the Hospital Record Study

data is chosen to represent the size distribution

for all U.S. hospitals, but the extent to which

any bias is introduced by the inclusion or exclusion of U.S. hospitals in the CPHA parent set is

not well defined .23

Table 4 (p. 16) showed NCHS Hospital Discharge Survey data for peptic ulcer disease for

the years 1966 and 1970 through 1978. The firstz lone ind ica kc)r t~f tfle represen ta t iveness of Hospital Rec~)rdStudy based figures is a comparison of Hospital Record Study estimated deaths from peptic ulcer and total counts (not pr(~jrcti(~ns)

tabulated by the NCHS Division c)f Vital Statistics. Between 1970

and 1978, Hospital Rec~~rd Study estimates of annual deaths from

peptic u]cer were 92 to 114 percent of U, S. \’itd] Statistics counts

(42).
Case Study #11 Benefit-and-Cost Analysis of Medical Interventions: The Case of Cimetidine and Peptic Ulcer Disease ● 41

listed diagnoses count those discharges for

which one of the ulcer diseases was listed as the

primary diagnosis. These data, plotted in figure

3 (p. 17), show a distinct downward trend over

the past decade for hospitalization of patients

whose first-listed diagnosis was ulcer disease.

The CPHA Hospital Record Survey data show a

similar and significant downward trend, with an

even greater difference in the total decline from

1970 to 1978 (42).24 According to both sets of

data, the number of hospitalizations for ulcer

disease in 1978 is approximately what would be

expected by extrapolating the trend established

through 1977.

Furthermore, both sets of data confirm that

hospitalizations during the 1970’s have declined

for duodenal ulcer and remained constant for

gastric ulcer. Between 1970 and 1978, the ratio

of hospitalizations for duodenal ulcer to those

for gastric ulcer declined by 37 percent according to the Hospital Record Study and by 49

percent according to the Hospital Discharge

Survey. This is further evidence for the epidemiologic distinction between duodenal and gastric

ulcer. The figures are incomplete because a relatively small number of diagnoses categorized as

“peptic ulcer—site unspecified” is omitted, but

their inclusion would not alter the trends

indicated.

Data from CPHA’s Hospital Record Study

can also be used to estimate the number of ad-

“Elashott and Grossman def]ne a trend as significant if: 1 ) the

Spearman rank (}rder correlation is significant (p< O.OS), and 2)

the difference between the 1970 and 1978 values exceeds the size of

the Q5-percent c(~ntidence interval tor the med]an value (42).

missions for uncomplicated ulcer disease and

those for ulcer disease associated with hemorrhage or perforation (42). Between 1970 and

1978, uncomplicated duodenal ulcer admissions

declined by 46 percent; admissions for hemorrhage declined by 37 percent; and admissions

for perforation declined 24 percent, though failing to reach statistical significance because of

the small number of admissions for perforation.

Uncomplicated gastric ulcer admissions showed

a small, but significant, decline (18 percent). No

clear trend emerged for complicated gastric

ulcer admissions.

The number of surgical procedures for ulcer

disease has shown a decline during the 1970’s

that roughly parallels that for hospitalizations.

Both NCHS and CPHA collect data on surgical

procedures, but neither routinely relates operations to discharge diagnoses. The principle surgical procedures used for ulcer disease are partial gastrectomy (excision of part of the stomach) and vagotomy (cutting of the vagus nerve),

with pyloroplasty (enlargement of the pyloric

canal) or other drainage procedure (134). The

numbers of these procedures performed during

selected years from 1966 through 1978 are

shown in table 17 (NCHS data). During this

period, pyloroplasty and drainage procedures

were almost invariably performed in association

with vagotomy. Virtually all vagotomies were

probably undertaken for the treatment of ulcer

disease. Presumably, the great majority of partial gastrectomies were also done for ulcer

disease, but there are also several less common

indications for partial gastrectomy (e.g., gastric

carcinoma and trauma).

Table 17.—Number of Selected Surgical Procedures

(Partial Gastrectomy, Vagotomy, Pyloroplasty and Drainage”) in the United States, 1966-78

Year

1966 . . . . . . . . . . . .

1970 . . . . . . . . . . . .

1972 ........, . . .

1975. , ... , . . . . . .

1976 . . . . . . . . . . . .

1977 .., . . . . . . . .

1978 . . . . . . . . . . . .

Pyloroplasty

Partial gastrectomy Vagotomy and drainage

74,500 61,000 56,800

55,800 62,800 45,500

63,300 59,300 42,000

53,300 52,800 38,500

54,200 48,300 31,200

51,100 45,500 26,300

39,700 29,200 20,600

aulcer dl~ea~e ,~ by far the most common Indlcatlon for these surgical procedures Over the time period shown PY1oroPlastY

and drainage were almost Invanably associated with vagotomy

SOURCE National Center for Health Statmtlcs, National Hospital Discharge Survey, Hyattsville, Md
Thus, the sum of partial gastrectomies and

vagotomies can serve as a reasonable proxy for

the number of surgical operations done for peptic ulcer disease. Summing these two procedures

may double count some patients who undergo

surgery, because a patient who receives both

partial gastrectomy and vagotomy is recorded

under both procedures. Despite the possibility

of some double counting, the trend over time in

the total of these two procedures would remain

a useful index.

Estimates for the number of partial gastrectomies and vagotomies from NCHS tend to be

higher than estimates from CPHA, but data

from both sources show a distinct downward

trend over time in the number of operations (see

table 8, p. 22). An acceleration (or deceleration)

of this downward trend in surgery following the

advent of cimetidine might be ascribable to the

introduction of this new, widely used medication.

We tested whether the number of surgical

procedures performed in 1978 was different

from that which would be predicted by the

previous trend in the following way. First, we

fitted a least-squares, linear regression line to

the surgical data available through 1977. The

predicted number of procedures in 1978 is based

on a direct extension of the regression line. This

is shown in figures 5 and 6, respectively, for the

NCHS and CPHA surgery data. The NCHS estimates of surgery are consistently higher than

the CPHA estimates, but the rates of decline

(slopes of the regression lines) are quite similar,

within one standard error of each other .25 The

plots also show the 95- percent confidence interval about this regression line for individual

estimates in each year for which data are

available.

According to the NCHS data (figure 5), the

rate of surgery in 1978 is significantly (p< 0.01)

below the rate that would have been predicted

on the basis of the trend through 1977. The drop

in 1978 is less striking in the CPHA data (figure

6), but even here there is only about a 1 0-

percent chance that the estimated amount of

“Thr ~l(~pc (){ the regre~~lon line tor the’ NCHS data ts 0.33cII;

that for the CPHA data is 0.3Q4s.

Figure 5.— NCHS Data on Number of Selected

Surgical Procedures (Partial Gastrectomy and

Vagotomy) in the United States, 1966.78

140

60,

1965 1970 1975 1980

● Best fit computed by least-squares method. Confidence intervals

shown for curve fit to years 1966-77,

SOURCE Based on data from the Nat fonal Center for Health Stat[s ICS Hyatts

V1/1~ Md

Figure 6.—CPHA Data on Number of Selected

Surgical Procedures (Partial Gastrectomy and

Vagotomy) in the United States, 1966-78

40,000 J I 1 1 1 I E I I I I I J , --

1970 1975 1980

● Best fit computed by least-squares method. Confidence Intervals

shown for curve fit to years 1966-77.

SOURCE Based on data from the Comnllsslon on Professional and +ospltal

Actlvttles compiled by J D Ela Shoff and M I Grossman 1981)(42)
surgery in 1978 is in line with the preceding

trend. The number of surgical procedures in

1978 was approximately 11,000 fewer than the

predicted number based on CPHA data, and

26,000 fewer than the predicted number based

on NCHS data.

Further evidence for the apparent excessive

drop in surgery in 1978 compared to earlier

years comes from a comparison of the number

of surgical procedures as a proportion of hospitalizations for ulcer disease for various years

(see table 18). Each year from 1966 to 1977, the

number of operations was between 25 and 29

percent of hospital admissions; in 1978, the

number of operations for ulcer disease was 19

percent of hospitalizations. Roughly speaking,

for the decade before 1978, more than one in

four patients hospitalized for peptic ulcer received surgery; in 1978, the proportion dropped

below one in five.

If an unexpected decline in ulcer surgery did,

in fact, occur in 1978, the question is, why? Did

cimetidine play any role in the apparent drop?

Are there other plausible explanations? What

sorts of data might be obtained that could

answer these questions?

Table 19 shows numbers and rates of surgical

procedures for all abdominal surgery and for

selected abdominal surgical procedures for

selected years from 1970 through 1978. There

was no general decline in abdominal surgery

over these years. Only surgery for peptic ulcer

disease shows a marked decline in 1978 compared with the rates in earlier years. Some

surgery for peptic ulcer is elective, and one

might imagine that part of the decline could be

related to a newly emerging, more cautious attitude toward elective operations. This might

occur, for example, as a result of more patients

seeking second opinions or of greater cost-conTable 18.— Proportion of Patients With First-Listed Diagnosis

of Ulcer Disease Having Surgery, 1966-78

B

A Number of patients

Number of surgical discharged with

Year procedures diagnosis of ulcerb

— — A/B .

1966: : 135,500 526,000 0.258

1970. ...., . . . . 118,600 438,000 0.271

1972 , 122,600 429,300 0.286

1975 . . . . . . . . . . . . 106,100 411,700 0.258

1976 . . . . 102,500 385,400 0.267

1977 .., . . . . . . . 96,600 385,400 0.251

197 8 68,900 360,400 0.191

al ~~1 udes part Ial gast rectom~ and va90t0mY

blncludes gastric duodenal, gastrole)unal and peptic ulcer (site unspeclfled)

SOURCE Nat(onal Center for Health Statlstlcs, National Hosp/tal Dwcharge Survey, Hyattsvtlle, Md

Table 19.— Number and Rate of All and Selected Abdominal Surgical Procedures in the United States, 1970-78

Partial gastrectomy

All abdominal surgery and vagotomy Appendectomy Cholecystectomy a Herniorrhaphy b

—.

Year Number RateC Number RateC Number RateC Number RateC Number RateC

—— —..

197 0 2,440,000 122 119,000 6 325,000 16 367,000 18 496,000 25

1975 . . . . 2,894,000 138 106,000 5 319,000 15 442,000 21 549,000 26

1976 ...., . , 2,809,000 133 102,000 5 306,000 14 442,000 21 507,000 24

197 7 2,937,000 139 97,000 4 342,000 16 446,000 21 533,000 25

197 8 2,830,000 132 69,000 3 299,000 14 432,000 20 510,000 24

a~urglca~ remo~~l o~~he gal I blad(er

bsurglcalrepa[r of a hernia

c Rates shown are per 10000 poputatlon

SOURCE Based on dala from the National Center for Health Stat[stlcs, National Hospital Discharge Survey, Hyatt svllle, Md
sciousness on the part of physicians. However,

we find no parallel decline between 1977 and

1978 in other abdominal surgery, such as herniorrhaphy (surgical repair of a hernia), which

is probably more frequently elective than is

surgery for ulcer disease.

A dramatic change in the criteria used to

decide on surgery or use of a different type of

surgery for patients with ulcer disease might account for some decline. To our knowledge,

however, neither the recognized indications for

surgery nor the types of operations have

changed dramatically in the past few years.

Also we know of no changes in the standard

coding for operative procedures in 1978 that

might account for the observed decline. Diagnostic advances, such as fiberoptic endoscopy,

may provide greater- assurance of benignity of a

slowly healing gastric ulcer and thus avert some

surgery that would have been performed

previously. Even if present, however, such effects seem very unlikely to reach the proportions of the evident decline in 1978.

Results from at least one of the maintenance

trials comparing cimetidine with placebo support the possibility that the decline in surgery in

1978 is related to the availability of cimetidine.

In a year of maintenance treatment, Bodemar

and Walan (16) found that 1 patient in 32 who

received cimetidine and 15 in 36 who received

placebo underwent surgery because they had

two recurrences or because of severe symptoms

at the first recurrence (difference significant,

p < 0.0005). 26 Thus, one possible explanation

for the decline in surgery for ulcer disease in

1978 is that the dramatic growth in the use of

cimetidine enabled more patients to be treated

successfully medically. If cimetidine were

responsible, the effect could be temporary. Pa-

‘@In a second maintena ace study that rept~rted sur~lcal ex -

perience, p[wsible effects t~t cimetldine <~n ~urgery are obscured by

the practice of treating “placebo tal I ures ” with a L (~urse (~t L i met idine rather than surgery; th \ ettectwi a remissi{~n in m,]st ‘placebo

failures” durtng the 6 months [~t the study (M ~ In thi~ ~tudy, 30

patients wew treated in]t ially with Imaintenance p]acebt~, 24 relapsed, al! t~t wht~m were the n trc>a ted with c I met i dine, and ~

underwent surgery wit h In t Ilt, ~-m on t h period L)} t hc \t udv. Ot the

26 patients in it ial]y t rea tetl wtth rn~ in tenanct’ t inlet Idlnt>, 7 r~,-

]apsed; 1 received surgery then ~nd ~ rm elved a w>c(~nci ct~urw of

(higher dcwe) c imetidine: 2 { t t h(wc ~ undt’rwwnt >urgc,rv wlthln the

6-m(~nth perl(xi t~t the ~tudy

tients who were scheduled for an elective operation may have decided with their physicians to

delay surgery in order to try the new drug. Since

patients appear to relapse at the same rate

following cessation of cimetidine, the decline in

surgery might be followed by a compensatory

rebound, especially if more reports (e. g., 121)

suggest increased risks or adverse side effects

with long-term use of cimetidine.

To date, only circumstantial evidence and

argument by exclusion can make the case for the

role of cimetidine in decreased rates of surgery.

However, more direct evidence may be forthcoming from several sources. Murray Wylie of

the University of Michigan is engaged in a

detailed analysis of CPHA data on patients hospitalized with ulcer disease .27 Wylie has data on

all patients discharged with a diagnosis of ulcer

disease from a cohort of 790 hospitals that participated continuously in the CPHA data system

from January 1974 through October 1978. Although the data do not specifically identify patients who did and did not receive cimetidine, he

is able to examine surgical rates on a month-tomonth basis. Thus, he can test the correspondence between any accelerated decline in

surgery and the introduction of cimetidine in the

United States in August 1977.

Wylie’s preliminary impression is that the frequency of surgery began to drop even a few

months before the release of cimetidine. He

speculates that this might be attributable to a

delay in elective surgery in anticipation of the

new medication. It would be very informative

to compare changes in rates of surgery separately for uncomplicated cases (presumably admitted because of pain) and for those with hemorrhage or perforation. If cimetidine is reducing

surgery by effecting a medical remission after

patients are hospitalized, the largest drop in

surgery as a proportion of admissions should be

for patients hospitalized because of pain.

Wylie will also be able to analyze his data

separately for surgical and medical admissions,

including length of stay. This is of particular interest to a cost-effectiveness assessment of the

‘‘\$’e are gr<]tt’t ul t{) l’r(~tt’sw)r \4 }IIIL 1(, J \lIJ r lrl~ t }1 I> (l~,w rl p! It,n

{~t h t~ W( lrl, i n pr{~~r(’~~.
Case Study #11: Benefit-and-Cost Analysis of Medical Interventions: The Case of Cimetidine and Peptic Ulcer Disease ● 45

number of days of hospital care that might be

saved by cimetidine. Presumably, some fraction

of the reduction in surgery that might be attributable to cimetidine is due to patients not

being hospitalized, and another fraction is due

to hospitalized patients being treated medically

only. (The large drop in surgery in 1978 compared with the drop in hospitalizations suggests

that the latter fraction may be the larger. ) On

the average, surgical lengths of stay would be

expected to be longer than medical, and a shift

from surgical to medical care in a hospital

should typically produce a reduction in hospital

days. If a very large number of patients who are

considered potential candidates for surgery are

first treated medically, however, any failures on

the medical regimen would then undergo surgery after a delay, and this could add to the

average length of stay for patients. In addition,

successful medical treatment with cimetidine

might or might not take longer than a medical

regimen without the drug. A few points of data

would be preferable to a lot of speculation.

Another approach to assessing cimetidine’s

effects on the health system has been undertaken

by Professors Burton Weisbrod and John

Geweke at the University of Wisconsin .28 They

are analyzing patient records developed for accounting purposes by the Texas medicaid program. Weisbrod and Geweke aim first to reconstruct medicaid expense records on a patient-bypatient basis for all patients with a diagnosis of

ulcer disease. They have identified 1,206 patients with ulcers in a sample that begins in

January 1976 and will extend to August 1979.

These investigators have conducted a pilot

study with 81 patients randomly selected from

this population, 36 with and 45 without a history of cimetidine use. Their intent is to compare the health and expenditure history (including nearly 50 categories of various expenses for

hospitalization, physicians, drugs, nursing

homes, etc. ) for patients treated with and without cimetidine.

Weisbrod and Geweke recognize some inherent limitations in the available data. For example, approximately one-fifth of the medicaid

‘F\\’c’ are gratet UI to [’r(lfes~t~r Cewcke t(lr \harlng intt~rmatl(ln

abc~u t t hcl r \t udy t or t h 1+ reptlrt

claims do not include the patient’s diagnosis;

medicaid patients over 65 years old are also

covered by medicare, about which the investigators have no information; and the data do not

include information concerning patient status at

discharge or work history. The major difficulty

Weisbrod and Geweke face, however, is controlling for selectivity bias in those patients who

do receive cimetidine. Their approach is to

stratify patients according to demographic factors and clinical history. Although it will be impossible to overcome the aforementioned barriers completely, Weisbrod and Geweke’s study

promises to be the first large-scale, patientbased study providing data on the direct and induced health system effects of cimetidine. The

data base can also be used to describe the diffusion of the drug in a given patient population

and the pattern of present use by medical practitioners in one State.

We are aware of a few additional studies of

the health system effects of cimetidine that are

in more preliminary stages of development. At

least one of these involves a health maintenance

organization (HMO); if the HMO’s population

is sufficiently stable, it may be a particularly

valuable setting for study. Ideally, one would

seek results from a long-term, randomized, controlled study of patients with ulcer disease who

are or are not treated with cimetidine, but for

ethical and practical reasons, such a study is

unlikely to materialize.

In summary, hospitalization and surgery for

peptic ulcer disease have both declined significantly during the past decade. The decline in

hospital admissions for 1978 is consistent with

earlier trends. However, the fall in surgical procedures for ulcer disease in 1978 is unexpectedly

large, amounting to 11,000 to 26,000 fewer procedures in 1978 than would be expected from the

trend leading up to that year. The introduction

and widespread use of cimetidine is one plausible explanation for this unexpected decline.

More specific information from studies in progress, including a month-by-month tracing of

surgical rates and a comparison of health

resources used by patients who did and did not

receive cimetidine, would help strengthen or

refute this inference.
46 ● Background Paper #2: Case Studies of Medical Technologies

Outcome

The outcome effects of cimetidine are consequences of its clinical and health system effects.

We have already discussed how clinical and

health system effects interest and lead to the two

components of outcome: health status and resource costs. In this section, we present additional empirical evidence about cimetidine’s

possible effect on outcome.

The available empirical evidence plus methodologic and other considerations raised in a

later section entitled “Guidelines for Review of

Health Care Benefit-and-Cost Analyses” serve

as a basis for our review of published analyses

of cimetidine’s benefits and costs in the next part

of this case study.

Health Status

As we have already discussed, it is convenient

and usual to think of health status in terms of

mortality and morbidity.

MORTALITY

We are aware of no empirical studies of the

effects of cimetidine on mortality from peptic

ulcer disease. This is not surprising, because

mortality from this disease is relatively low. A

controlled cohort study would require enormous numbers of patients, for reasons presented

earlier in the discussion of possible effects of cimetidine on complication rates. One might

argue that insofar as cimetidine delays or supplants surgical intervention and attendant surgical mortality and delays the development of

complications, it will forestall some deaths.

However, it is conceivable that patients who

would naturally develop the more virulent complications of peptic ulcer might benefit less from

cimetidine or that complications following

cessation of the drug would be more severe than

they might have been had cimetidine not been

administered. Any of these circumstances

would counter potential improvements in survival related to cimetidine. In addition, any

severe and unanticipated side effects from longterm use would further compromise cimetidine’s

beneficial effects on mortality.

Table 3 (p. 16) shows that mortality from

ulcer disease has been declining steadily over the

past 15 years. Figure 7 shows NCHS ulcer mortality statistics on a quarterly basis from 1976 to

mid-1979. It shows both a continuing downward trend and a seasonal variation in mortality, No unexpected mortality reduction following the introduction of cimetidine in August

1977 is evident. If cimetidine has saved lives of

ulcer patients, the lives saved are too few to

have a substantial effect on overall mortality to

date. Of course, these figures are mute on the

question of whether even more widespread and

consistent use of cimetidine might demonstrably

delay or prevent deaths from ulcer disease in the

future.

In summary, there are some reasons to believe cimetidine might have beneficial effects on

ulcer mortality and other reasons to doubt it. If

cimetidine did have a small beneficial effect on

mortality, it would be very difficult to detect in

controlled cohort studies or from national mortality trends.

Figure 7.— Number of Deaths in the United States

From Ulcer Disease (Gastric, Duodenal, and Peptic—

Site Unspecified), 1976-79

January- April- July- OctoberMarch June September December

NOTE: 1978 and 1979 figures extrapolated from a 10-percent

sample.

SOURCE Based on data from the Natlooal Center for Health Statistics, Dlvlslon

of Vital Stat jstics, Iiyattsvllle, Md
MORBIDITY

From the perspective of BCA, in which there

is an effort to translate morbidity into social

resource costs, an important consideration is the

effect of cimetidine on disability and days lost

from work. Cimetidine produces more prompt

and consistent relief from ulcer pain than does

placebo. In the short-term treatment of peptic

ulcers, it is reasonable to expect that faster healing and pain relief can mean earlier return to

work. This potential benefit may be reduced insofar as doctors prescribe and patients follow

“rest at home” for a set number of days or weeks

following diagnosis of a new ulcer, irrespective

of the promptness of symptom remission. That

policy would be reasonable, for example, if

clinicians believed that patients returning to the

stress of work with unhealed ulcers would be

more likely to develop bleeding or other complications of ulcer disease.

A number of the randomized clinical trials of

cimetidine in the United States included a special protocol to assess time lost from work

(118). A preliminary report presented results in

64 outpatients, 37 treated with cimetidine and

27 with placebo. (Many of the 217 potential

subjects were disqualified because of uncertain

employment status, a problem that is being rectified with a revised protocol. ) Among the patients analyzed, there was a striking tendency to

be absent full time or to work full time. Compared to the number of days lost from work

during the week prior to treatment, the group

receiving cimetidine averaged significantly more

days of work in weeks one, two, and four

(p< 0.001) and in week six (P< 0.05) following

the initiation of treatment. This report is

notable not only for its results, but because it

represents an admirable effort to collect data

pertinent to the economic consequences of a

medical practice in the context of a controlled

clinical trial.

One of the trials comparing maintenance cimetidine with placebo also reported on the work

experience of patients (15). During the year of

the study, 1 of 32 patients taking cimetidine did

not report to work for 79 days, and 23 of 26 patients taking placebo did not report to work for

a total of 1,405 days because of symptoms.

Thus, the cimetidine-treated patients reported to

work an average of approximately 36 more days

per patient during the year of the study (difference significant, p < 0.001).

The effectiveness of cimetidine compared to

other treatments, such as antacids, in enabling

patients to return to work is not addressed in

any of the controlled trials we have reviewed.

Resource Costs

The economic implications of an intervention

such as cimetidine include the costs of the intervention itself, the resource costs and savings

related to induced effects on the health care

system, and indirect effects on productivity related to change in mortality and morbidity. In

this section, we offer a few observations on the

direct costs of cimetidine compared to alternatives. We defer consideration of the resource

value attached to the induced and indirect effects of cimetidine until the next part of this

study, in which we review some of the benefitand-cost analyses that have been carried out.

The daily cost of cimetidine is less than the

daily cost of antacid in doses that have been

shown to be as effective in promoting the healing of newly discovered duodenal ulcers (80).

The retail cost of cimetidine is approximately

$0.25 to $0.30 per 300-mg tablet. 29 Assuming

consumption of four tablets daily, the daily cost

of cimetidine is $1.00 to $1.20.

Antacids vary in their compositions, neutralizing capacities, and costs (115). Two of the

more popular blends of aluminum hydroxide

and magnesium hydroxide are Maalox® and

Mylanta II®. 30 The latter was the antacid used in

the studies by Peterson, et al. (116) and Ippoliti,

et al. (80). Mylanta II® has approximately 50-

percent more neutralizing capacity than the

same quantity of Maalox® and costs approximately $3.80 per 12-ounce bottle compared to

$1.80 for Maalox®.31

-“’Ba+wi (In inlc~rmati(ln pr{>vicjecj b} tour Bostf}n-area dru g

st(~res a nci ct~n~i~ten t w’i t h est im a tw (}} the man utacturer.

‘OMylanta 11 c(~ntains, in addltit~n to antacid, the det(~arning

si I ictlne a ncl a n t Itla t ulen t ~imeth ic(~nc.

‘lC~~st e~timatcs bawd on average charge> at tour B(wt(>n-area

drug St (}res.
If we assume administration of the same

amount of antacid as used in the studies cited

above (seven daily doses, each with approximately 120 mEq of buffering capacity), the

daily cost would be approximately $1.58 for

Maalox® (seven 45-ml doses) and $2.22 for

Mylanta® (seven 30-ml doses). If patients who

are prescribed cimetidine consume three or four

additional doses of antacid daily, their medication costs would still be comparable to those of

patients who follow an intense antacid regimen.

Thus, a typical patient can expect to pay no

more, and possibly somewhat less, for cimetidine than for a therapeutically equivalent

course of popular, brand-name antacids .32

Summary

Organized according to the benefit-and-cost

model for medical interventions presented earlier, this part of our case study has described

available information about the effects of cimetidine—its clinical effects, its health system effects, and its potential impact on outcome.

Numerous controlled studies of patients with

duodenal ulcer confirm that cimetidine promotes healing and provides faster and more

complete pain relief than placebo. Less conclusive evidence suggests the drug may be more

effective than placebo for patients with gastric

ulcer. An intense antacid program appears to be

about as effective as cimetidine for patients with

duodenal ulcer, but more evidence on this matter is needed. Clinical studies have also shown

that relief of symptoms is not a reliable indicator of healing. In general, European studies

have found more favorable results with

cimetidine than have’ U.S. trials.

Cimetidine used for up to 2 months appears

to be a relatively safe drug. Most known side effects are minor or reversible, but recently reported changes in gastric flora and endocrinologic effects are disturbing. Available studies of

“It may be pos~ible to tind less expensive, generic brands (Jt antacids with equivalent neutralizing capacity, but the costs (It

Maalox ” and Mylanta ” are no more than thcwe CJ[ m~wt other

brands (~f aluminum-magnesium antacids (63), Antacids are ~va]]-

ablc wit h(~ut a presc rip t itm, and their use d(w>s nc~t nccessart 1 y entail the ctwt tlt a phys]clan visit, but in this dlscussl(~n we have

assumed that a high -cl(w .lnt~cid regimen (Ir clmet i dine would bc~

consumed on I y tol Ic)wi ng a ph ys]cia n \ ad~r ict’.

maintenance cimetidine do not alter this assessment. As with any new drug, uncertainty exists

as to possible long-term consequences of the

drug’s use.

Compared to an intense course of antacids,

cimetidine is comparably effective, more risky,

and less troublesome to the patient with duodenal ulcer. Cimetidine plus a moderate amount

of antacids costs no more than a therapeutically

equivalent course of intense antacid therapy,

Experts now differ in their recommendations for

initial therapy of duodenal ulcer, some favoring

cimetidine and others antacids. A reasonable

approach is to select therapy based on each patient’s preferences and personality.

Compared to placebo, maintenance treatment

with cimetidine as long as 1 year significantly

reduces the chance of ulcer recurrence. Once

cimetidine is discontinued, patients appear to

relapse at the same rate as they would have

without maintenance treatment. We are aware

of no controlled trials comparing maintenance

cimetidine to treatments other than placebo.

There is little empirical evidence either that

cimetidine prevents future complications of

ulcer disease or that cessation of cimetidine promotes complications. At present, FDA is considering approval of cimetidine for use longer

than 8 weeks in patients with duodenal ulcers

who are at high risk for surgery.

In European trials, but not in U.S. studies,

cimetidine-treated patients tend to consume less

antacid than placebo-treated patients. Very

limited empirical data are currently available on

the possible effects of cimetidine on use of other

medication, on diagnostic tests, or on physician

visits. Several studies are underway that may

shed light on these matters.

Data we have compiled from NCHS show an

unexpectedly sharp decline in the rates of surgery for ulcer disease in 1978, the first full calendar year after the introduction of cimetidine.

This drop occurred against a background of falling rates of surgery and hospitalization for ulcer

disease over the previous decade. Other explanations are possible, but the widespread use of

cimetidine may have contributed to the mag-
nitude of the 1978 decline in surgery for ulcer lost significantly fewer days of work than padisease. tients taking placebo, but no controlled study

There is little evidence of any effect on compares work loss among patients on differcimetidine on mortality from ulcer disease. In ent, effective treatments.

several studies, patients treated with cimetidine

— 

REVIEW OF BENEFIT-AND-COST ANALYSES OF CIMETIDINE

Available Analyses

We are aware of two analyses of the social resource implications of cimetidine (109, 121).

Both were sponsored by Smith Kline & French

Laboratories, through their office of cost-benefit

studies. One study, published by the Netherlands Economic Institute in February 1977 (109),

analyzed the possible effect of cimetidine on the

Dutch economy. That analysis estimated that if

cimetidine had been used by half of all ulcer patients in the Netherlands, the potential savings

would have been $23 million, or 21 percent of

the estimated $111 million total costs of ulcer

disease in 1975, We will not comment on this

study, because most of the issues it raises are

also raised in the second study, and the latter is

a more recent analysis which focuses on the

United States.

The second study, entitled The lmpact of

Cimetidine on the National Cost of Duodena l

Ulcers (121), was conducted by Robinson Associates, Inc., a marketing research and management consulting organization located in Pennsylvania. A

elusions of

along with

presented in

summary of the methods and conthe Robinson Associates study,

our critique of the study, are

the section below.

The Study by Robinson Associates, Inc.

Summary of Methods and Conclusions

The Robinson Associates study (121) estimated that if cimetidine had been used in 80 percent of duodenal ulcer patients in the United

States, 1977 national health care costs for duodenal ulcer disease would have been reduced by

$645 million (29 percent of that study’s estimated total expenditures for duodenal ulcer).

An estimated $271 million would have been

saved in medical care costs. The estimated $271

million savings is the net result of a $34 million

increase in drug costs, offset ninefold by $305

million in savings in other expense categories;

the bulk of the $305 million medical care savings

is from estimated reductions in hospital care

($258 million) and surgeons’ fees ($30 million).

In addition to the $271 million net savings in

medical expenditures, the study estimated that

$373 million would have been gained from increased productivity—$329 million (88 percent)

from decreased morbidity, and the remainder

from decreased mortality.

The Robinson Associates analysis was based

on two types of estimates. First, physician experts were asked in late 1977 to estimate the

likely clinical and health system effects of

cimetidine compared to traditional therapy for

duodenal ulcer patients. Then, applying cost

figures derived principally from SRI’s assessment of the costs of ulcer disease in the United

States (146), 33 Robinson Associates estimated

the potential savings in 1977 due to the average

predicted changes in health status and medical

care. Summing the results for each cost category, the analysis yielded the conclusions summarized in the preceding paragraph.

A detailed reconstruction of the Robinson

Associates analysis is beyond the scope of this

review. Below we provide a description of certain methodologic features of the analysis as a

basis for our comments in the critique that

follows. First, we consider the expert estimates

of the clinical and health system effects of cimetidine; then, we consider the conversion of these

estimates into projected annual savings.
50 ● Background Paper #2. Case Studies of Medical Technologies

Twenty-three physicians who were familiar

with cimetidine served as expert consultants for

the Robinson Associates analysis. Each was

asked in an interview about five specified ulcerpatient types—ranging from a patient with

typical symptoms and newly diagnosed ulcer to

a patient hospitalized with the complication of

bleeding but not requiring immediate surgery—

which were intended to represent a spectrum of

severity of illness in patients with duodenal

ulcer. The 23 physicians first estimated the proportion of all ulcer patients represented by each

type. Then they described what they believed to

be the usual treatment for each patient type and

any changes in that treatment that would be

made in a program that would include cimetidine. Finally, they estimated clinical and health

system effects (including such elements as recurrence, physician visits, hospitalizations,

surgery, diagnostic tests, missed work, complications, and mortality) for each type of patient treated without cimetidine and with up to 8

weeks of cimetidine. The physicians were not

asked to estimate dollar costs for any postulated

effects.

The methods that were used in the Robinson

Associates study to convert estimated clinical

and health system effects into dollar savings

were as follows. As a baseline for estimating the

costs of duodenal ulcers, Robinson Associates

used estimates of the costs of peptic ulcer disease

in 1977 developed by SRI (146). Within each

direct and indirect cost category, the analysts

estimated from secondary sources the fraction

of peptic ulcer costs attributable to duodenal

ulcer disease (with the remainder attributable to

gastric ulcer).

To estimate the proportion of costs that

would be saved by cimetidine, the analysts then

proceeded as follows. First, they assigned prices

to each component of each cost category. For

example, in the category of hospital costs, they

established the cost per hospital day for patients

who do not have surgery and the cost per hospitalization for patients who do undergo

surgery. Next, the analysts combined these cost

components with physician estimates of the

management and course of patients with and

without cimetidine. For example, the hospital

costs for each type of patient were calculated as

the sum of costs for the proportion of those patients given surgery plus costs for those not

given surgery, as follows:

proportion of patients of this type who are hospitalized

x [(proportion of patients hospitalized without surgery

x number of nonsurgical hospitalizations per year

x average length of stay for nonsurgical patients

x cost per day)

+ (proportion of patients hospitalized with surgery

x cost per surgical admission)]

= total annual hospital cost per patient of this type

Similar calculations yielded an estimate of the

annual costs in each cost category for each type

of patient with and without cimetidine.

Next, the percentage difference in costs in

each cost category due to cimetidine was calculated for each type of patient. The percentage

change for each type of patient was then

weighted by the proportion of all ulcer patients

estimated by the physicians to be represented by

that type. This yielded the percentage change in

a given cost category for an “average” patient

treated with cimetidine rather than traditional

therapy.

The percentage change in cost per “average”

patient was further adjusted to reflect: the

posited extent of use of cimetidine. The physician consultants predicted that an average of 80

percent of the five patient types would be

treated with cimetidine 2 to 3 years after the

time of the interviews. This figure, used as the

basis for dollar projections in Robinson

Associates study’s conclusion, is a composite of

the estimated extent of use (ranging from 73 to

93 percent) for each of the five types of patients.

Next, the percentage change in cost for each

cost category, as adjusted for the proportion of

patients using cimetidine, was multiplied by

the costs of duodenal ulcer disease assigned to

that category. This provided a dollar estimate of

savings in each category. Summing the dollar

estimates over all cost categories yielded the

total projected savings attributable to the use of

cimetidine by a given proportion of patients.

In short, the Robinson Associates analysis

used prices of the components of medical care

only as a basis for estimating the percentage
change in cost due to cimetidine. Once derived,

these percentages were applied to independent

assessments of the cost burden of all duodenal

ulcer disease to estimate dollar savings.

Critique

The cost-and-benefit analysis that Robinson

Associates prepared for Smith Kline & French

has many positive attributes. First, the study

represents the kind of serious analysis of the

economic effects of a new drug that is important

and valuable. If society is to attend to both the

economic and clinical implications of medical

interventions, careful analyses of costs and

benefits are essential. Second, we believe the

analysts selected appropriate categories of

resource costs to assess. Their direct cost components correspond roughly to the health

system effects outlined in the benefit-and-cost

model we presented earlier in this case study.

Their translation of mortality and morbidity

components into indirect costs is appropriate

for a resource cost analysis. Third, their approach of comparing estimated net resource effects of cimetidine to resource use without

cimetidine is a reasonable one. Fourth, their

method of obtaining physician estimates of

clinical and health system effects was an imaginative one, and it required no guesses about

costs from clinicians. Finally, the report provides sufficient detail about its methods and

assumptions to allow the reader to reach independent conclusions.

We believe this report deserves scrutiny, because, to our knowledge, it is the most comprehensive analysis of the resource implications

of cimetidine in the United States. As a

thorough economic assessment of a recently introduced drug, the study may serve as a model

for future evaluations of other emerging medical

practices. In the discussion of the study that

follows, we have attempted to examine the

analysis carefully in light of the benefit-and-cost

model and data presented earlier and the guide -

lines for review of benefit-and-cost analyses that

are presented in the next section of this case

study.

We believe the Robinson Associates study

substantially overestimates expected savings

from cimetidine. The accuracy of the estimated

savings attributable to cimetidine in the Robinson Associates study depends on at least five

features: 1) the accuracy of the clinical and

health system effects projected by their physician experts; 2) the relation between a percentage reduction in health services devoted to ulcer

disease and savings in health resources; 3) the

accuracy of the estimated total costs of all

duodenal ulcer disease used as a baseline for

percentage savings; 4) the applicability of projected percentage effects to the total population

of patients with duodenal ulcer disease; and 5)

the validity of the methods used to compute

average percentage effects due to cimetidine. We

question some of the assumptions and methods

used in each of these five areas.

Let us consider first the physician experts’

opinions of the clinical courses of patients with

and without cimetidine. The mean of these

estimates is intended to represent an unbiased

estimate of the course of duodenal ulcer disease

using conventional treatment, and an unbiased

estimate of the effects of cimetidine. An unbiased estimate of the former is best achieved by

physicians of varied specialty backgrounds who

together treat the full range of patients with

ulcer disease, An unbiased estimate of the latter

requires both knowledge of cimetidine’s clinical

effects and a neutral attitude toward the drug.

The 23 physicians whose opinions form the

basis of the Robinson Associates study were all

gastroenterologist-researchers who had participated in early clinical trials of cimetidine and

whose participation in this study was solicited

by Smith Kline & French (121). This selection,

the authors state, ensured informed opinion

about the potential effects of cimetidine—but it

does not ensure individual objectivity or a

balanced range of views. Of 32 physicians contacted by Smith Kline & French to participate in

the study, 4 refused either because they were too

busy or for unknown reasons. 34 It is possible

“Four others were disqualified or unavailable because of extensive travel. One of the 24 physicians who agreed to participate was

not interviewed because of illness (121).
that researchers who were less enthusiastic

about the drug were less eager to express their

views when contacted by the manufacturer.

To enhance the credibility of subjective physician estimates, Robinson Associates cite a

Danish study (66) that compared observed experience in 154 patients over 13 years with physician estimates of some of the long-term consequences of ulcer disease (proportion treated

surgically and proportion of medically treated

patients with varying degrees of symptoms).

The Danish study found that the mean estimates

of 143 physicians corresponded fairly closely to

patient experience. The Danish investigators

interviewed a wide range of general practitioners, medical specialists, and surgeons to obtain their mean estimates. These investigators

also noted that there were some systematic

biases that tended to balance one another. For

example, the 65 general practitioners in the

Danish study estimated that 15 percent of patients would undergo operations for ulcers, and

the 50 surgeons predicted 27 percent; the

observed proportion was 22 percent. Thus, this

study suggests the importance of using a broadly based sample to achieve unbiased mean

estimates. Just as surgeons’ estimates alone

might not accurately represent surgery experience, a group of research gastroenterologists

seems unlikely to represent a fair cross-section

of physician experience with and expectations

for patients who have ulcer disease.

The effects estimated by the physician consultants in the Robinson Associates study varied

widely. The projected cost consequences of

using cimetidine in 100 percent of duodenal

ulcer patients ranged from a savings of 67 percent based on one physician’s estimates to an increased expenditure of 40 percent based on

another’s estimates. Seven of the physicians

projected effects that yielded net losses or small

savings (of less than 10 percent), while eight

physicians projected effects that led to savings

of 40 percent or more. If the selection was

biased in favor of physicians at the “optimistic”

end of the spectrum of clinical and health system effects of cimetidine, the mean cost savings

estimate will be similarly biased.

Cost savings in the Robinson Associates

study are estimated as a proportion of the total

costs of duodenal ulcer disease. Two aspects of

the Robinson Associates calculations deserve

comment, and we expand on these points below. First, a given percentage reduction in

health services requirements for a particular

disease probably does not convert directly to an

equivalent proportion of health resource

savings. Second, we believe that the baseline

costs of duodenal ulcer disease employed by

Robinson Associates are too large, primarily

because of an inflated indirect cost estimate.

An implicit assumption in applying a percentage cost reduction to the health system expenditures for ulcer disease is that savings will be

realized in direct proportion to the decreased

use of medical services. For example, if hospital

days decline by 10 percent, then 10 percent of

resources devoted to hospital care are assumed

to be saved. This calculation uses average costs

per hospital day rather than marginal costs of

the last 10 percent of hospital days. To the extent that fixed and semivariable costs contribute

to the cost of a hospital day, the marginal savings from reducing a given fraction of hospital

days will be less than the average cost of those

days.

35 The remaining fixed cost components

will simply be redistributed over the remaining

hospitalized patients, Thus, the direct conversion of percentage reduction in hospital days to

percentage savings in resource costs of hospital

care may be questioned.36 Short-term resource

savings might even be less than the averted

marginal costs, insofar as available supply of

hospital resources induces other demand. 37 If

hospital beds previously occupied by patients

with ulcer disease are filled by other patients

(without ulcer disease) who previously would

not have been hospitalized, then potential savings would be eroded further.

“Fixed c[~sts are independent ot the volume t~f services. Semivariab]e costs are a t unct i~)n (>f both time and volume of services.

“A related problem is the trequent use of charges as pr[~xies for

resource costs t~t care. Charges rel]ect average rather than marginal costs, and tor a variety of reasons, charges for particul~lr services may differ trom their average rew~urce c[~sts.

“The notion ot hospital bed supply creating demand for mc~re

hospital services, called Rt)emer’s Law, was t)riginally proposed 20

yedrs ago ( 130).
The total costs of duodenal ulcer disease used

by Robinson Associates are based on the estimated costs of peptic ulcer developed by SRI

(146). SRI’s estimate is substantially higher than

another recent, independent estimate of the cost

of ulcer disease by NCDD (4), and, as we discussed earlier, we believe a more correct figure

lies between the two. If Robinson Associates

had based their projected savings from cimetidine use on the costs of ulcer disease as

estimated by NCDD, making no other changes

in their analysis, the resulting estimated savings

would have been over 50 percent less. Use of

NCDD’s cost figures, without altering any other

assumption or calculation used in the Robinson

Associates study, would have produced an estimated savings of only $307 million, in contrast

to the $645 million savings projected on the

basis of SRI’s figures. Use of our midpoint calculation developed in the section of this case

study on the cost of peptic ulcer disease yields

estimated savings of only $476 million.

Another important source of misestimation in

the Robinson Associates study is the assumption

that the five patient types represent the full

range of patients with duodenal ulcer disease.

The most severely ill type of patient included in

the Robinson Associates study is one who is

hospitalized and bleeding but not in need of immediate surgery. Thus, the study omits patients

who have very severe bleeding or other lifethreatening complications of ulcer disease such

as perforation. According to CPHA data (42),

nearly 6 percent of patients hospitalized for

duodenal ulcer disease in 1977 had perforation,

and 28 percent had bleeding. The number of excluded patients who require prompt surgery

may be estimated conservatively to include 90

percent of patients with perforation (or 5 percent of hospitalized patients) and between 10

and 20 percent of patients admitted for bleeding

(or an additional 4 percent of hospitalized patients). Thus, approximately 9 percent of

hospitalized patients, all of whom receive

surgery, are excluded from the range of patients

in this study.

The omission of these patients from the

Robinson Associates study has substantial consequences for the study’s cost estimates. For example, consider the area of hospital costs alone.

Assuming traditional therapy, Robinson Associates estimate total hospital costs to be $732

million. At 80-percent cimetidine use, they estimate savings in hospital costs to be $258 million, a 35-percent reduction from hospital costs

with traditional therapy. According to the SRI

figures that served as a baseline for the Robinson Associates estimates, nearly 72 percent of

hospital costs for ulcer patients in 1977 were due

to the estimated 20 percent of hospitalized patients who underwent surgery (146). Assuming

the excluded patients, who are most severely ill,

were responsible only for a proportionate share

of costs for surgical cases, the proportion of

total hospital costs for duodenal ulcer disease

devoted to these patients would be approximately 32 percent, and the dollar amount devoted to their care would be $237 million .38

Although the expert consultants were not

asked about this group of most severely ill patients, we think that cimetidine would not have

been expected to alter the acute management of

more than a small fraction of them. Assuming

that 80-percent cimetidine use would have been

estimated to save as much as 15 percent (approximately $36 million) of the hospital costs

for these patients, and then applying the proportion of savings estimated for “all” duodenal

ulcer patients in the Robinson Associates study

to the hospital costs attributable only to the included patients, we compute the savings in hospital care to be $209 million rather than $258

million. 39

‘pProp(~rtlc~n of hospital costs due to surgical care (~t excluded

patients = proportion of surgical cases excluded x prc)pc>rt](>n of

total costs due to surgical cases: 0.324 = (0.09 0.20) x 0,72.

Dollar amf~unt devoted to hospital care of excluded patients =

proporticln of hospital costs due to excluded patients x t[>tal hospita] costs: $237 mi]]ion = 0.324 X $732 mi]]i{}n,

“Let :

Cs estimated hospital costs due to all pat]ents with

traditional therapy

CE ~ estimated hospital costs due tcl excluded patients with

traditi<>nal therapy cl ~ estimated h(}spital costs due t o included patients with

traditional therapy

SE estimated hosplta] savings from all patients with

80-percent cimetldine use

PSE ~ estimated pr[lp(~rt ion [~t costs saved by 80-percent

cimet idlne use a t tribu table to excluded patients

PSI ~ estimated prtlporti(~n ot costs saved by 80-percent

clmetid]ne use a t tribu table t o Included patients
54 ● Background Paper #2: Case Studies of Medical Technologies

Thus, the incomplete spectrum of patients included in the study produces an overestimate in

savings of nearly $50 million in the area of

hospital costs alone. The exclusion of the most

severely ill patients also incurs additional, if

smaller, overestimates of savings in other cost

areas. If cimetidine reduces the fraction of patients who reach the most severely ill category,

however, then this source of overestimation

would be reduced proportionately. The authors

of the Robinson Associates report repeatedly

point out that their projected percentage savings

are unaffected by changes in estimated baseline

costs for ulcer disease. As we have just seen

above, however, the percentage savings calculated in the study are quite sensitive to the inclusion or exclusion of different types of patients with duodenal ulcer.

Two other sets of assumptions in the Robinson Associates study also affect the calculated

savings. The first of these is the relative dollar

values assigned to the components of each cost

category (e.g., how much less expensive is a

hospital stay for nonsurgical than for surgical

patients?). The second set of assumptions is the

estimated proportion of all included patients in

each of the five patient types. The data underlying these assumptions can be expected to vary

over some range. To accommodate such variation, one could, for example, estimate a confidence interval about physician estimates of the

proportion of patients of each type. 40 T h e

Robinson Associates study would have been

strengthened by explicit sensitivity analysis,

testing the effect on the conclusions of

systematic alteration of key assumptions.

(continued from p. 53)

Given:

c - $732 million (from Robinson Associates study)

CE - $237 million (from preceding footnote)

CI - C – CE = $(732 – 237 million) = $495 million (by

definition, C = CI + CE)

PSE - 0.15 (assumption; see text)

P SI - 0.35 (from Robinson Associates study)

Then:

S - CE x p

sE + CI x PS I

- ($237 million) (0.15) + ($495 million) (0.35)

= $209 million.

d’JT~iS is separate from the question of bias in the mean estimate,

i.e., whether a group of gastroenterologist-researchers would

perceive the world of ulcer patients to be made up of as high a proportion of “initial diagnosis patients” (type 1) as would a group of

general practitioners or less specialized internists.

The method used by Robinson Associates to

compute the expected reduction in costs caused

by cimetidine use has another subtle, but potent, effect on their estimate. Assume for the

moment that the interviewed physicians did

constitute a representative sample of informed

opinion about the effects of cimetidine. It would

be desirable, then, for the overall estimated percentage reduction in costs to be a statistically

unbiased measure of individually perceived percentage reductions. Take a simplified case. If

physician A provides estimates of cimetidine’s

effects that produce a 70-percent decrease in

resource consumption, and physician B provides estimates that produce a 50-percent

decrease, we would like the overall estimated

reduction to be midway between the two, or 60

percent. Since we presumably trust each physician’s judgment equally, each perceived percentage reduction should contribute equally to the

overall estimate of percentage reduction. However, the method used by Robinson Associates

to compute percentage reduction in costs has the

effect of placing greater weight on the percentage reduction estimates of physicians who

perceive ulcer disease as more severe and requiring higher levels of resources.

Mathematically speaking, this distortion occurs because the ratio of estimated means is not

the same as the mean of estimated ratios. To see

how this distortion can arise, again consider

two simplified examples. First, physician A and

physician B are asked about the consequences of . -

ulcer disease with and without cimetidine for a

given type of patient. The effects are translated

into various categories of resource cost, such as

hospital care. Physician A estimates effects that

lead to a total annual cost of $1,000 without

cimetidine and $500 with cimetidine use. Physician B estimates effects that lead to a cost of

$100 without cimetidine and $50 with the drug.

In each case, the estimated percentage reduction

is 50 percent. Proceeding as Robinson

Associates did, we can compute an average cost

without cimetidine and an average cost with

cimetidine.

$1,000 + $100 average cost without = = $550

cimetidine 2

$500 + $50 average cost with = = 

$275

cimetidine 2
Then the “average” percentage reduction attributed to cimetidine, as computed by Robinson Associates, would be the difference between

these average costs divided by the cost without

cimetidine, or:

$550 – $275 = 0.5 0

$550

In this case, both physicians projected the same

percentage reduction, and the calculated percentage reduction agrees with both of them. So far,

this approach appears sound.

Now consider the following variation. Physician A estimates effects that cost $1,000 without

cimetidine and $400 with cimetidine, a 60-percent reduction in costs. Physician B estimates effects that lead to a cost of $100 without cimetidine and $60 with the drug, a 40-percent reduction. The average estimated reduction is:

0.60 + 0.40 = 0.50

2

or 50 percent. Calculated by the method of

Robinson Associates, the percentage reduction

IS:

(51,000 + $100) – ($400 + $60)

$1,000 + $100

$1,100 – $460

=

$1,100

$640

= — =0.5 8

$1,100

Thus, the calculated reduction of 58 percent is

much closer to the perceived reduction of physician A, who viewed ulcer disease in this type of

patient as more severe and costly than did

physician B.41

~ i sY ~b{)] iC~ ] Iv the ~1 I [~~(,nce beth,een the rncttl {~cj in effect used

by Rc&lnwln A’s~tlcidtes to calculdk’ a ‘ mean” percentage cost

reduction and the mean of the percentage reducti(>ns estimated by

the phy’>lcl.ln+ c a n be expres>ed a~ lt~ll[~w~ —— number t~t physician expert% ;Cl ; c(wt ca]cu Iated }rom physlclan t est tmates ok effects

WI th tradl tlt~ndl tred tment ~ wlth(w t clmet]dlne)

cc, —= C(M t cd ]CU [a ted [ r(~m phv~lclan I est I ma tes of et[ec ts

W. I t h d ] ] pat len t~ reccl v ln~ c i met i d I ne treatment

Then:

TC1 _ ~~1 = c{)~t ~al,lng+ ~d]~ul~ted tr~,rn ~hy,~lclan I estlma te~

TCI – CCI =

percentage c(wt reduc t](~n calculated trorn physician

TCI i e~t t ma te~

The estimation method used by Robinson

Associates confounds the estimate of perceived

effects of cimetidine, on the one hand, with

variability in the perceived severity and overall

management of ulcer disease, on the other. If the

Robinson Associates study had taken the mean

of physician estimates with traditional therapy

as the baseline from which percentage reductions were calculated, there might be a stronger

case for an approach like that used. However,

the calculated percentage reductions were applied to an independently determined baseline

cost. This reinforces the argument for seeking

an unbiased measure of expected percentage

reduction, namely the mean of the physicians’

percentage estimates.

The practical consequences of this distortion

are substantial. A series of bar graphs provided

in the Robinson Associates report (their tables

34 through 43, pp. 54-63) shows percentage

changes in cost based on the estimates of each of

the 23 physician informants. A separate figure

in the report depicts the distribution of physician percentage estimates for each of nine cost

categories and overall costs. On the basis of the

bar graph for the distribution of physician

estimates of overall cost savings, we calculate

that the mean of the estimated percentage reductions by the 23 physicians was approximately 24

percent (see table 20). By contrast, the “mean”

shown in the Robinson Associates bar graph

and used in the

reduction of 34

dine use).

This suggests

reduction used

analysis was a percentage cost

percent (at 100-percent cimetithat the “average” percentage

in the Robinson Associates

Robinson Associates estimates “mean” percentage cost savings as

an “average of total costs”:

i = 1

x 100

1=1

The mean of percentage savings estimated by physicians is:

(1)

(2)

n

In general, eqn. 1 # eqn. 2, although the two may give the same

result in exceptional circumstances.
Table 20.—Percentage Cost Savings Estimated

From Robinson Associates Study

Physician number Percentage savingsa

1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68%

2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

6 48

7: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : 47

8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

9 36

10: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : 35

11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5

18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5

19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o

21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 9

b

22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 2 4

b

23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 4 0

b

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 562%

Mean percentage cost savings = 562/23=24.4%

aGauged from the height of the bar graph for each physlclan In Robinson

Assoclatestable43

bEstlmated c ost incre a s e

SOURCE Robinson Associates, Inc, The /mpacfof C/met/d/neon the Naf/ona/

CosfofDuoderra/U/cers, 1978(121)

analysis was approximately 42 percent larger

than the mean of the estimated percentage

reductions provided by the physician experts.42

(Similar discrepancies of varying degree are

found with each category of cost shown in the

Robinson Associates bar graphs.) Basing overall

percentage cost savings on the mean of percentage reductions estimated by the 23 physicians

would reduce the projected savings at 80-percent cimetidine use by approximatel y $19 0

million, from $645 million to approximately

$455 million.

In summary, we believe the Robinson Associates analysis substantially overestimates expected savings from cimetidine. Considering the

exaggerated baseline costs of ulcer disease

assumed in the analysis,

trum of patients included,

troduced by the method

42 0.34 –0.24

= 0.416

0.24

the incomplete specand the distortion inof calculating mean

percentage reduction in costs we believe the

estimated $645 million savings are probably two

to three times too large. Potential bias introduced by the selection of physician informants

would increase the magnitude of that overestimate.

Despite our criticisms of the Robinson Associates study, we believe its basic thrust is probably correct. Cimetidine does appear to save

more medical resources than it costs. The $305

million savings in medical costs that Robinson

Associates estimates from the use of cimetidine

are approximately nine times the estimated $34

million direct costs of the drug. Thus, even if the

drug costs were tripled and the estimated savings reduced by two-thirds, use of cimetidine

would still appear to be an economically sound

investment. Also, the estimated savings in

health resources omit potential gains in productivity from use of the drug.

The emerging empirical evidence cited in the

section of this case study on health system effects supports the belief that use of cimetidine

probably saves medical resources. In the coming

years, more evidence will probably accumulate

about the costs, risks, and benefits of cimetidine

compared to alternatives. We may learn, for example, about newly recognized adverse effects

of the drug or about rebound in the number of

ulcer patients undergoing surgery or about the

development of safer, equally effective and acceptable treatments. The comparative cost effectiveness of cimetidine for patients with ulcer

disease in the long run is a matter of continuing

empirical study,

Our discussion of the Robinson Associates

study illustrates some of the difficulties of designing and conducting economic analyses of

newly introduced medical practices. The work

of the Robinson Associates analysts must be

viewed in the context of the information available at the time it was done. The Robinson

Associates study was undertaken before there

was widespread clinical experience with cimetidine, and the analysts faced a dearth of empirical findings relating directl y to resource

costs. Given the information available at that

time, the analysts might have considered the following procedure. First, define prototypical pa-
tients that represent the full range of patients

with ulcer disease, including the most severely

ill. Second, obtain from a broad, representative

group of physicians baseline estimates of the

course of disease using traditional therapy.

Third, check how closely these estimates correspond to other estimates of the total cost of

duodenal ulcer disease, examine critically

assumptions that underlie the estimates of the

health system effects in each major cost category, and reach consensus estimates. Fourth,

present to physicians familiar with cimetidine

the consensus-estimated clinical courses for each

patient type with traditional therapy; ask them

to assume the consensus represents actual patient experience; and then ask them to estimate

what changes, if any, would follow from the introduction of cimetidine. Finally, calculate the

mean of the estimated percentage cost reductions and apply it to appropriately estimated

costs of illness.

Guidelines for Review of Health Care

Cost Analyses

Presented below are guidelines in the form of

a series of questions that may aid in the design

and review of cost-benefit and cost-effectiveness

studies. These guidelines cover matters of

definition and purpose, analytic methods, and

conclusions. They are presented here in concise

form and presume familiarity with the rationale

and basic components of benefit-and-cost

analyses in health care (see, e.g., 89).

Objectives of the Analysis

1.

2.

What is the purpose of the analysis? Is it

a) to assess the optimal management of individual patients with a particular clinical

condition; b) to measure the clinical and

economic importance of particular clinical

problems; c) to compare alternative strategies for addressing a particular health problem in a particular population; d) to compare alternative investments in health programs; or e) to compare health and other

social resource investments?

Are the interests and potential biases of the

analyst and client acknowledged? Are measures taken to guard against potential bias?

Specification of the Problem

1.

2.

3.

Is the population of interest appropriately

defined (e.g., a population with a particular

diagnosis, or having a particular clinical

symptom, or undergoing a particular test or

treatment)? Is the population consistently

defined throughout the analysis?

Does the analysis specify the interventions

of interest and address them consistently

throughout the analysis?

Are the conditions of use (e.g., ideal v.

average) specified and consistently treated in

the analysis?

Methods of Analysis

1.

2.

3.

4.

5.

6.

7.

Are the analytic methods selected appropriate to the objectives of analysis? (e. g., CEA

v. BCA, use of decision-analytic framework,

etc. )

Is the time frame of analysis appropriate to

the objectives (e. g., is patient lifetime a more

suitable focus than a cross-section of patients for a limited time?)

Are clinical effects and other benefits appropriately specified? Are the methods of assessment explained? Are incremental benefits the basis for analysis?

Are cost estimates complete and appropriately categorized? Has double counting

been avoided? Are induced costs and savings

considered? Are marginal resources costs the

basis for analysis? Are methods fully explained?

Are benefits and costs aggregated properly

across the population and intervention of interest? Is the analysis restricted to a few uses

of multipurpose intervention?

Are benefits and costs appropriately aggregated over time? Is discounting employed? Is

the discount rate appropriate?

Are projected effects justified? Are the

estimates based on empirical data or opinion? Are uncertainties recognized? Are the

sources of all estimates clearly explained?

Are estimates unbiased? Are assumptions

acknowledged, fully exposed, and justified?

Are estimates based on evidence from the

same population and intervention that are

the subjects of analysis? Are extrapolations

and interpolations reasonable?
8.

9.

10.

Are underlying trends in disease distribution Conclusions

and severity taken into account? Are other 1. pertinent population trends assessed?

Are technological changes and evolution of 2.

practices taken into account?

Are the distributions of benefits and costs

important and are they considered?

Are the conclusions consistent with the analysis and appropriately qualified?

Are conclusions robust? Have assumptions

and key uncertainties been subjected to a

sensitivity analysis?

SUGGESTIONS FOR FURTHER RESEARCH

Our suggestions for further research are

cognizant of broadened clinical experience with

cimetidine in recent years and newly emerging

empirical evidence of health system effects of

the drug. Any analysis must take account of the

shifting epidemiologic pattern of ulcer disease.

We believe that sound CEAs comparing effects

of different strategies over an ulcer patient’s

lifetime would provide valuable guidance to

medical decisions for patients with ulcer disease.

As discussed earlier in this case study, a

number of well-controlled clinical trials have

assessed the clinical effects of cimetidine in the

past few years. These trials have not dealt with

every important clinical comparison (e.g.,

maintenance antacids v. cimetidine), but they

have provided a much sounder empirical base

for projecting some of the clinical consequences

of the drug. Since clinical use of cimetidine is so

widespread, a broad group of clinicians could

be consulted for subjective estimates of likely

consequences in areas where clinical trials are

lacking. It would be possible to begin by sending participating physicians a summary of empirical clinical findings with cimetidine. A

systematic method, such as a Delphi process,

could then be used to reach group consensus on

key probabilities .4:

There is still little empirical information on

health system effects of cimetidine to serve as a

basis for estimating resource costs and savings.

Any analysis of the health system effects of an

intervention in ulcer disease must take as a

43The Delphi method is an iterative process for reaching group

consensus that attempts to separate the reasons for an opinion

from the authority of the opinionholder. It has been employed in

the analysis of health care decisions to obtain estimates of probabilities from a group of medical experts (127).

baseline the epidemiologic trends in the disease

discussed in this case study. As mentioned

previously, the rate of surgery for ulcer disease

shows a steeper decline in 1978 than would be

predicted from the previous trend. Confirmation of this drop and additional evidence linking

it to cimetidine would provide a sounder basis

for projecting direct cost savings in one area,

and for attributing such savings to the use of

cimetidine. Additional evidence of health system effects of cimetidine may emerge from the

ongoing research that we have described.

In further analyses of cimetidine, one fundamental concern must be the time frame of the

analysis. Calculations based on a single year,

for example, will overlook the important distinction between avoidance of surgery and delay

in surgery. From the evidence we have cited in

this case study, there is a good reason to believe

that a year of maintenance cimetidine imparts a

delay in inevitable surgery rather than a longlasting cure of ulcer disease,

More generally, with diseases such as peptic

ulcer, which are chronic, and with interventions

such as cimetidine, whose long-term effects may

be very important, a benefit-and-cost analysis

might best focus on a cohort of patients, projecting effects over their lifetimes. Rather than attempt to enumerate all resource implications for

a cross-section of the population in a single

year, it might be more helpful to estimate the

present-value lifetime resource costs and health

effects for a given population of ulcer patients,

Then, on the basis of available research evidence and subjective clinical judgments, one

could estimate the consequences for a given type

of patient of pursuing different management

strategies. This approach would allow compari-
son of marginal costs with incremental benefits

for each shift in strategy. Focusing on each patient’s lifetime rather than on a given calendar

year would highlight, among other things, uncertainties in the long-term side effects of use of

a relatively new agent such as cimetidine.

The prototype decision tree shown in figure 4

(P P. 26-27) could serve as a starting point for

such an analysis. At least one group of researchers, in Switzerland, has begun to take a decision-analytic approach to the lifetime consequences of duodenal ulcer treatments (137).

Their published analysis is restricted to a

specific 50-year-old male patient, and one might

fault their figures for not discounting future

costs and benefits, but these researchers do approach the problem in an appropriate way.

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