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Integrating Health Economics Into the Product Development Cycle


  • Laura Vallejo-Torres
  • Lotte Steuten
  • Bonny Parkinson
  • Alan J. Girling
  • Martin J. Buxton


Background . The probability of reimbursement is a key factor in determining whether to proceed with or abandon a product during its development. The purpose of this article is to illustrate how the methods of iterative Bayesian economic evaluation proposed in the literature can be incorporated into the development process of new medical devices, adapting them to face the relative scarcity of data and time that characterizes the process. Methods . A 3-stage economic evaluation was applied: an early phase in which simple methods allow for a quick prioritization of competing products; a mid-stage in which developers synthesize the data into a decision model, identify the parameters for which more information is most valuable, and explore uncertainty; and a late stage, in which all relevant information is synthesized. A retrospective analysis was conducted of the case study of absorbable pins, compared with metallic fixation, in osteotomy to treat hallux valgus. Results . The results from the early analysis suggest absorbable pins to be cost-effective under the beliefs and assumptions applied. The outputs from the models at the mid-stage analyses show the device to be cost-effective with a high probability. Late-stage analysis synthesizes evidence from a randomized controlled trial and informative priors, which are based on previous evidence. It also suggests that absorbable pins are the most cost-effective strategy, although the uncertainty in the model output increased considerably. Conclusions . This example illustrates how the method proposed allows decisions in the product development cycle to be based on the best knowledge that is available at each stage.

Suggested Citation

  • Laura Vallejo-Torres & Lotte Steuten & Bonny Parkinson & Alan J. Girling & Martin J. Buxton, 2011. "Integrating Health Economics Into the Product Development Cycle," Medical Decision Making, , vol. 31(4), pages 596-610, July.
  • Handle: RePEc:sae:medema:v:31:y:2011:i:4:p:596-610
    DOI: 10.1177/0272989X10388041

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    References listed on IDEAS

    1. James K. Hammitt & Alexander I. Shlyakhter, 1999. "The Expected Value of Information and the Probability of Surprise," Risk Analysis, John Wiley & Sons, vol. 19(1), pages 135-152, February.
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    Cited by:

    1. Maarten Ijzerman & Lotte Steuten, 2011. "Early assessment of medical technologies to inform product development and market access," Applied Health Economics and Health Policy, Springer, vol. 9(5), pages 331-347, September.
    2. Petra Marešová & Lukáš Peter & Jan Honegr & Lukáš Režný & Marek Penhaker & Martin Augustýnek & Hana Mohelská & Blanka Klímová & Kamil Kuča, 2020. "Complexity Stage Model of the Medical Device Development Based on Economic Evaluation—MedDee," Sustainability, MDPI, vol. 12(5), pages 1-27, February.

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