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Do Changes in Drug Coverage Policy Point to an Increased Role for Cost-Effectiveness Analysis in the USA?

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  • James Chambers

Abstract

Compared with other countries, cost-effectiveness analysis has traditionally had a limited role in US health care. Rather, US payers have typically accommodated the introduction of expensive technology by passing an increasing proportion of costs to patients, through raising insurance premiums and/or by increasing copayments, coinsurance, and deductibles. However, in what may prove to be a tipping point, the two largest pharmacy benefit managers have chosen to exclude drugs from their formularies that offer uncertain health benefit compared with cheaper alternatives. This paper argues that cost-effectiveness analysis should be used to inform these value-based decisions, and that by using information other than robust cost-effectiveness evidence, payers risk wrongly denying beneficiaries access to important medical technologies. If cost-effectiveness analysis were to be used in this way, it would be another in a growing number of examples of its use across public and private payers. In the absence of a centralized agency conducting cost-effectiveness analysis, the recently inaugurated 2nd Panel on Cost-Effectiveness in Health and Medicine has an important role to play in standardizing methods and promoting best practice. Copyright Springer International Publishing Switzerland 2014

Suggested Citation

  • James Chambers, 2014. "Do Changes in Drug Coverage Policy Point to an Increased Role for Cost-Effectiveness Analysis in the USA?," PharmacoEconomics, Springer, vol. 32(8), pages 729-733, August.
    • Handle: RePEc:spr:pharme:v:32:y:2014:i:8:p:729-733
    DOI: 10.1007/s40273-014-0166-6
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    References listed on IDEAS

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    1. Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2008. "Organizational Fragmentation and Care Quality in the U.S. Healthcare System," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 93-113, Fall.
    2. Bryan, Stirling & Sofaer, Shoshanna & Siegelberg, Taryn & Gold, Marthe, 2009. "Has the time come for cost-effectiveness analysis in US health care?," Health Economics, Policy and Law, Cambridge University Press, vol. 4(4), pages 425-443, October.
    3. Elhauge, Einer, 2010. "The Fragmentation of U.S. Health Care: Causes and Solutions," OUP Catalogue, Oxford University Press, number 9780195390131.
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    1. Chambers, James D. & Cangelosi, Michael J. & Neumann, Peter J., 2015. "Medicare's use of cost-effectiveness analysis for prevention (but not for treatment)," Health Policy, Elsevier, vol. 119(2), pages 156-163.

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