Abstract
This study aims to discuss approaches to assessing the value of medicines. Economic evaluation assesses value by means of the incremental cost-effectiveness ratio (ICER). Health is maximized by selecting medicines with increasing ICERs until the budget is exhausted. The budget size determines the value of the threshold ICER and vice versa. Alternatively, the threshold value can be inferred from pricing/reimbursement decisions, although such values vary between countries. Threshold values derived from the value-of-life literature depend on the technique used. The World Health Organization has proposed a threshold value tied to the national GDP. As decision makers may wish to consider multiple criteria, variable threshold values and weighted ICERs have been suggested. Other approaches (i.e., replacement approach, program budgeting and marginal analysis) have focused on improving resource allocation, rather than maximizing health subject to a budget constraint. Alternatively, the generalized optimization framework and multi-criteria decision analysis make it possible to consider other criteria in addition to value.
Highlights
Economic evaluation serves as a tool to assess the value of a medicine by comparing the costs and outcomes of a medicine with those of a relevant comparator (Drummond et al, 2005)
Health is maximized by selecting medicines with increasing incremental cost-effectiveness ratio (ICER) until the budget is exhausted
The results of an economic evaluation can be expressed in the form of an incremental cost-effectiveness ratio (ICER)
Summary
Economic evaluation serves as a tool to assess the value of a medicine by comparing the costs and outcomes of a medicine with those of a relevant comparator (Drummond et al, 2005). The results of an economic evaluation can be expressed in the form of an incremental cost-effectiveness ratio (ICER). This ratio relates the difference in costs between a medicine and the comparator to the difference in outcomes. A number of alternative approaches to assessing the value of medicines are presented. This information will aid health care decision makers and researchers to interpret economic evaluations and their results for the purpose of decision making
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