Joshua Cohen (Tufts Center for the Study of Drug Development, Boston, Massachusetts, USA) Elly Stolk (Institute for Medical Technology Assessment, Erasmus University, Rotterdam, The Netherlands) Maartje Niezen (Institute for Medical Technology Assessment, Erasmus University, Rotterdam, The Netherlands)
Abstract
There are three known criteria that underlie drug reimbursement decisions: therapeutic value, cost effectiveness and burden of disease. However, evidence from recent reimbursement decisions in several jurisdictions points to residual unexplained variables,_ one of which may be budget impact._ An economic rationale for carrying out budget impact analyses is opportunity cost, measured by the economic benefits foregone by using resources in one way rather than another. Under certain assumptions, cost-effectiveness analysis accounts for opportunity cost while conveying to the decision maker the price of maximising health gains, subject to a budget constraint. However, the underlying assumptions are implausible, particularly in the context of pharmaceutical care. Although drugs that are cost effective may lead to unambiguous health gains among patient groups for whom the drugs are indicated, the opportunity costs could conceivably lead to a reduction in aggregate health gains, or failure to meet different kinds of equity considerations. The pertinent policy question is where to find the resources to fund new innovations, such as cost-effective pharmaceuticals, or drugs targeting severe diseases. It may be a matter of redeployment of resources across healthcare sectors, cancelling the funding of (older) pharmaceuticals that are less cost effective, or delisting drugs that are cost effective but target less burdensome conditions.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Article provided by Wolters Kluwer Health | Adis in its journal PharmacoEconomics.
Volume (Year): 25 (2007) Issue (Month): 9 () Pages: 727-734 Download reference. The following formats are available: HTML,
plain text,
BibTeX,
RIS (EndNote),
ReDIF
Find related papers by JEL classification: C - Mathematical and Quantitative Methods D - Microeconomics I - Health, Education, and Welfare Z - Other Special Topics I1 - Health, Education, and Welfare - - Health I19 - Health, Education, and Welfare - - Health - - - Other I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets