A Pharmaceutical Innovation – Is it Worth the Money? Whose Money?
AbstractThis study seeks to provide evidence for deciding whether or not a pharmaceutical innovation should be included in the benefit list of social health insurance. A discrete choice experiment (DCE) was conducted in Germany to measure preferences for modern insulin therapy. Of the 1,100 individuals interviewed in 2007, 200 suffered from type 1 diabetes, 150 from insulin-treated type 2 diabetes, and 150 from insulin-naive type 2 diabetes. The long-acting insulin analogue ”Insulin Detemir” is compared to human insulin as the status quo. The DCE contains two price attributes, copayment and increased contributions to health insurance. As one would expect, non-affected non-diabetics and insulin-naive diabetics exhibit higher willingness-to-pay (WTP) values through copayment (adjusted for probability of contracting diabetes), while affected type 1 and insulin-treated type 2 diabetics have higher WTP through increased contributions. However, WTP values exceed the extra treatment cost in both financing alternatives, justifying inclusion of the innovation in the benefit list from a cost-benefit point of view.
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Bibliographic InfoPaper provided by University of Zurich, Socioeconomic Institute in its series Working Papers with number 0914.
Length: 27 pages
Date of creation: Sep 2009
Date of revision: Aug 2010
Health insurance; discrete-choice experiment; preferences; diabetes;
Find related papers by JEL classification:
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-19 (All new papers)
- NEP-DCM-2009-09-19 (Discrete Choice Models)
- NEP-HEA-2009-09-19 (Health Economics)
- NEP-IAS-2009-09-19 (Insurance Economics)
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