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A Pharmaceutical Innovation � Is it Worth the Money? Whose Money?

Author

Listed:
  • Michele Sennhauser

    () (Socioeconomic Institute, University of Zurich)

  • Peter Zweifel

    () (Socioeconomic Institute, University of Zurich)

Abstract

This 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.

Suggested Citation

  • Michele Sennhauser & Peter Zweifel, 2009. "A Pharmaceutical Innovation � Is it Worth the Money? Whose Money?," SOI - Working Papers 0914, Socioeconomic Institute - University of Zurich, revised Aug 2010.
  • Handle: RePEc:soz:wpaper:0914
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    File URL: http://www.econ.uzh.ch/static/wp_soi/wp0914.pdf
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    More about this item

    Keywords

    Health insurance; discrete-choice experiment; preferences; diabetes;

    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

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