IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Value of Information and Pricing New Healthcare Interventions

  • Andrew R. Willan

    (1SickKids Research Institute and University of Toronto, Toronto, ON, Canada)

  • Simon Eckermann

    (2University of Wollongong, Wollongong, NSW, Australia)

Registered author(s):

    Previous application of value-of-information methods to optimal clinical trial design have predominantly taken a societal decision-making perspective, implicitly assuming that healthcare costs are covered through public expenditure and trial research is funded by government or donation-based philanthropic agencies. In this paper, we consider the interaction between interrelated perspectives of a societal decision maker (e.g. the National Institute for Health and Clinical Excellence [NICE] in the UK) charged with the responsibility for approving new health interventions for reimbursement and the company that holds the patent for a new intervention. We establish optimal decision making from societal and company perspectives, allowing for trade-offs between the value and cost of research and the price of the new intervention. Given the current level of evidence, there exists a maximum (threshold) price acceptable to the decision maker. Submission for approval with prices above this threshold will be refused. Given the current level of evidence and the decision maker's threshold price, there exists a minimum (threshold) price acceptable to the company. If the decision maker's threshold price exceeds the company's, then current evidence is sufficient since any price between the thresholds is acceptable to both. On the other hand, if the decision maker's threshold price is lower than the company's, then no price is acceptable to both and the company's optimal strategy is to commission additional research. The methods are illustrated using a recent example from the literature.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Pay per view

    File URL:
    Download Restriction: Pay per view

    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.

    Article provided by Springer Healthcare | Adis in its journal PharmacoEconomics.

    Volume (Year): 30 (2012)
    Issue (Month): 6 ()
    Pages: 447-459

    in new window

    Handle: RePEc:wkh:phecon:v:30:y:2012:i:6:p:447-459
    Contact details of provider: Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:wkh:phecon:v:30:y:2012:i:6:p:447-459. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dave Dustin)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.