The Allocation of the Economic Value of Second-Generation Antipsychotics Over the Product Life Cycle: The Case of Risperidone in Sweden and the United Kingdom

Abstract

ObjectiveThis article estimates the life-cycle value of risperidone as representative of second-generation antipsychotics (SGA) relative to haloperidol (first-generation antipsychotics). MethodsWe estimated the number of patients treated with risperidone in Sweden and the United Kingdom, from 1994 to 2017, using data of usage and volume sales. We collected data from the literature on the effectiveness (quality-adjusted life-years per patient per year), direct costs (health services), and indirect costs (productivity) of risperidone and haloperidol. We proxied the incremental value added by the new class (SGA) using a comparator from the inferior class. Next, we modeled the life-cycle uptake of risperidone to estimate the life-cycle incremental cost (ie, direct, indirect, and medicine costs), incremental quality-adjusted life-years, and net monetary benefit of risperidone. We also assessed the life-cycle distribution of the social surplus between the payer (consumer surplus) and the innovator (producer surplus). ResultsFor the United Kingdom, consumer surplus represents around 72% of the total surplus before patent expiration and around 95% after patent expiration. For Sweden, the consumer surplus represents around 94% of the total surplus before patent expiration and around 99% after generic competition. ConclusionThese results suggest that the value added by SGAs to the system is higher than the expected value estimated using cost-effectiveness analysis at launch.Pricing and reimbursement decisions could recognize the full life cycle of value of innovative medicines. This not only presents a challenge of estimation but also of assessing the appropriate division of shares of social value.