Return on investment 2: evaluating the cost-effectiveness of needle and syringe programs in Australia 2009

Analysis of increases and decreases in NSP provision compared to no government funded NSPs (2010-2079)

Page last updated: 2009

Data from the epidemiological transmission model were generated for a number of different scenarios in which provision and funding of NSPs was less or more than current levels. Each scenario was compared to the no-program scenario using the start date of 2010 for the intervention and discounting to take the position of a decision maker in 2009. Costs were valued in 2008 Australian dollars.

Expenditure on NSPs was cost-saving at all levels of NSP funding when analysed for the periods 2010-2019 (10 years), 2010-2029 (20 years), or 2010-2059 (50 years) with undiscounted cost savings for current levels of NSP of $782m (10yrs), $3.23bn (20yrs), $17.75bn (50 years), and $28.71bn (70 years). The cost savings or net present value increased with more spending on NSPs, although the incremental NPV started to reduce as spending increased beyond 50% above current levels of funding (see Table 9). Analyses with longer time horizons showed greater gains and increased returns for each dollar invested (Table 9; Figure 23).

An expansion pathway was plotted of NPV vs DALY over 2010-2019 (Figure 22), demonstrating that a greater saving can be made with further expansion of NSP provision. In the period 2010-2019, the maximum net present value was obtained when NSP funding was 150% of current funding. If funding was three times current funding, the net present value was equivalent to funding at 75%, although the expansion of funding by three-fold would be cost-effective at $4,000 per extra DALY gained from current levels. If the time horizon was 2010-2029, the maximum NPV was obtained at 200% NSP or double funding and provision of NSP support and services (Table 10). If the economic analysis for the current scenario continued until 2079, when all lifetime costs and cost-offsets would accrue, the net financial saving would be $28.71bn undiscounted and $8.41bn discounted.

Decreases in funding from current level
Secondary analyses
Return on investment of NSPs associated only with HIV

Decreases in funding from current level

Decreased funding from current levels would be associated with increases in HIV and HCV infections, with associated loss of health and life. The reduced return on investment would exceed any savings associated with reduced spending on NSPs: if funding was reduced by $22m or 10% over the time period 2010-2019, 7,600 DALYs would be lost and the return on investment would be reduced by $36m (see Table 9). If funding was cut by 50%, over 36,000 DALYs would be lost with a reduction in the return on investment $197m.Top of page

Table 9: Loss of life and reduced return associated with decreased funding period 2010- 2019 (all discounted at 3%)

NSP funding Reduction in NSP spendingLoss in DALY vs. currentReduced return
50% of current levels
$112m
36,370
$197m
75% of current levels
$56m
16,473
$98m
90% of current levels
$22m
7,607
$36m

Table 10: DALYs and Net Present Value with changes in NSPs after ten years (2010- 2019) and 20 years (2010-2029) discounted at 3%

Table 10 is separated into 2 smaller tables in this HTML version for accessibility reasons. It is presented as one table in the PDF version.

DALYs and net present value with changes in NSPs after ten years (2010- 2019)

Level of funding for NSPs NSP investmentGain in DALYNet Present Value of NSPsReturn on investment
100% of current levels
$225m
97,229
$631m
current investment + 380%
110% of current levels
$248m
98,562
$633m
current investment + 360%
125% of current levels
$282m
104,005
$647m
current investment + 330%
150% of current levels
$338m
111,254
$656m
current investment + 290%
175% of current levels
$395m
116,874
$650m
current investment + 270%
200% of current levels
$451m
121,303
$635m
current investment + 240%
300% of current levels
$676m
132,595
$514m
current investment + 180%
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DALYs and net present value with changes in NSPs after 20 years (2010- 2029)

Level of funding for NSPs NSP investmentGain in DALYNet Present Value of NSPsReturn on investment
100% of current levels
$392m
365,703
$2,273m
current investment + 680%
110% of current levels
$431m
374,333
$2,091m
current investment + 590%
125% of current levels
$490m
389,043
$2,362m
current investment + 580%
150% of current levels
$588m
409,635
$2,427m
current investment + 510%
175% of current levels
$686m
426,538
$2,464m
current investment + 460%
200% of current levels
$784m
440,497
$2,480m
current investment + 420%
300% of current levels
$1,175m
478,262
$2,390m
current investment + 300%

Figure 22: DALY gain versus net present value after ten years

(NB: DALYs start at 50,000 and net costs are expressed as negatives (i.e. are cost-savings) and discounted at 3%)Text equivalent below for Figure 22: DALY gain versus Net Present Value after ten years

Text version of Figure 22

Top of pageFigures in this description are approximate as they have been read from the graph.
Net DALYs (1000s)Net cost ($ millions)
50% NSP
62
-425
75% NSP
82
-525
90% NSP
90
-600
100% NSP
96
-635
110% NSP
98
-640
125% NSP
104
-650
150% NSP
112
-660
175% NSP
117
-655
200% NSP
122
-640
300% NSP
133
-510

Figure 23: DALY gain versus Net Present Value after 20 years disc 3%

(NB: DALYs start at 250,000)
Text equivalent below for Figure 23: DALY gain versus Net Present Value after 20 years disc 3%

Text version of Figure 23

Top of pageFigures in this description are approximate as they have been read from the graph.
Net DALYs (1000s)Net cost ($ millions)
50% NSP
290
-1,600
75% NSP
335
-1,800
90% NSP
350
-1,950
100% NSP
365
-2,300
110% NSP
375
-2,100
125% NSP
390
-2,350
150% NSP
420
-2,400
175% NSP
430
-2,450
200% NSP
440
-2,480
300% NSP
480
-2,380

Secondary analyses

Inclusion of patient/client costs, productivity gains and injection-related injuries and disease

Inclusion of patient/client costs in the economic analysis of current funding of NSPs from 2000 to 2009 increased the net cost-saving of current provision of NSP from $128bn to $2.48bn (undiscounted, see Table 11).

Inclusion of productivity gains and losses (with patient costs) increased the net present value of current provision of NSP to $5.85bn in the period 2000 to 2009. Most of the productivity gains were related to HCV disease. It should be noted that the Friction Cost approach to productivity losses was a conservative one, compared to the frequently used Human Capital approach. This finding was based on limited data on workforce participation rates of NSP clients and people living with HCV. The cost savings to society are shown in Table 12.

If no NSPs were available, one could speculate that there would be an increase in injection related injuries and disease (IRID). If NSPs prevented 50% of the IRID that might occur in their absence, then one might assume that the additional cost-saving with current levels of NSP would be more than $20m a year or $200m in ten years (undiscounted).

Table 11: Healthcare costs averted and net present value for current funding of NSPs (undiscounted)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Healthcare costs averted $m
(IQR, undisc)
103
(94-118)
322
(294-350)
292
(270-314)
250
(229-261)
247
(226-260)
258
(238-274)
278
(259-298)
298
(277-327)
323
(296-356)
351
(323-393)
NPV $ m (current program)
83
300
271
227
222
234
251
271
296
324
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Table 12: Societal costs averted, including productivity losses, and net present value for current funding of NSPs (undiscounted)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Societal costs averted $ m
(IQR, undisc)
993
(931-1075)
949
(881-993)
410
(360-450)
348
(306-369)
380
(353-419)
448
(407-501)
521
(466-582)
580
(509-662)
676
(566-779)
783
(635-901)
NPV $m (current program)
973
928
388
325
355
424
494
552
648
756

Return on investment of NSPs associated only with HIV

The benefit of preventing HIV alone was considered in a secondary analysis for increases in funding scenarios from 2010-2019. Current levels of NSPs funding would be $226m (discounted) over the period 2010-2019 with healthcare costs saved of $56m and a net cost of $170m. 11,990 DALYs would be gained compared to no program for a cost of $14,200 per DALY gained. In other words, current levels of NSPs were cost effective compared to no program if only gains related to the prevention of HIV were considered over a ten year time horizon.

150% of current NSP provision and funding would cost $23,000 per DALY gained compared to no program, which would be considered cost-effective with a societal willingness to pay of $50,000 per DALY. However, the incremental cost of provision of NSPs at 150% compared to current levels was $444,000 per DALY gained when considering just the healthcare costs of HIV disease alone; in other words it would not be cost-effective to expand services on the basis of HIV alone in this ten year time horizon.

If both analyses were conducted at the 20 year time horizon, both current provision and 150% provision were cost-saving compared to no program for HIV alone, although the incremental cost per DALY gained comparing 150% with current program was $55,000 per DALY gained.
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