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Twenty Years of Using Economic Evaluations for Reimbursement Decisions. What Have We Achieved?

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  • Michael Drummond

    (Centre for Health Economics, University of York, UK)

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    Abstract

    The objective of this paper is to examine the impact of economic evaluation on the reimbursement process for pharmaceuticals. Before the introduction of economic evaluation, a range of arrangements existed across different jurisdictions, varying from reimbursement based on clinical criteria alone and price controls, to a total absence of controls over price or reimbursement. The changes in the structure of reimbursement policies necessary to incorporate economic evaluation have been accomplished without major difficulty in most jurisdictions. However, several methodological differences in international guidelines for economic evaluation exist, only some of which can easily be justified. A number of beneficial changes in reimbursement processes have also been observed, such as a trend towards requiring the measurement of more meaningful clinical endpoints and increased engagement between manufacturers, drug regulators and payers. A consistent finding in studies of reimbursement decisions is that economic considerations have been influential, second only to the strength of the clinical evidence for the drug of interest. The impact of economic evaluation on the allocation of healthcare resources is hard to ascertain because of the difficulties in specifying the counterfactual and the fact that little is known about the extent to which reimbursement decisions actually lead to changes in healthcare practice. However, there is evidence that economic evaluation has assisted price negotiations and enabled reimbursement agencies to target drugs to those patients who will benefit the most. In publicly financed healthcare systems, an evidence-based system of pricing and reimbursement for drugs, considering societal willingness-topay, is a reasonable policy objective to pursue.

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    File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP75_Using_economic_evaluations_for_reimbursement_decisions.pdf
    File Function: First version, 2012
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    Bibliographic Info

    Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 075cherp.

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    Length: 22 pages
    Date of creation: Feb 2012
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    Handle: RePEc:chy:respap:75cherp

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    1. Bethan George & Anthony Harris & Andrew Mitchell, 2001. "Cost-Effectiveness Analysis and the Consistency of Decision Making: Evidence from Pharmaceutical Reimbursement in Australia (1991 to 1996)," PharmacoEconomics, Springer Healthcare | Adis, vol. 19(11), pages 1103-1109.
    2. Nancy Devlin & David Parkin, 2004. "Does NICE have a cost-effectiveness threshold and what other factors influence its decisions? A binary choice analysis," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 437-452.
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