In forthcoming chapter in the Oxford Handbook on the Economics of the Biopharmaceutical Industry, experts in the field outline the evolution of cost-effectiveness analysis (CEA) through its use as part of health technology assessment. The authors also explore the theoretical…
In forthcoming chapter in the Oxford Handbook on the Economics of the Biopharmaceutical Industry, experts in the field outline the evolution of cost-effectiveness analysis (CEA) through its use as part of health technology assessment. The authors also explore the theoretical and practical issues that have arisen as the result of using CEA of drugs to make decisions about resource allocation, pricing and use and offer some important recommendations.
As both public and private payers seek to control pharmaceutical expenditures, formal cost-effectiveness analysis (CEA) has become a common approach for assessing the value of drugs, vaccines and other health technologies. CEA usually is applied within a broader framework of health technology assessment (HTA), whereby the technology is assessed for use and/or reimbursement price considering incremental health-related effects and costs compared to existing treatments. Australia was the first to adopt such a policy, in 1993, followed quickly by New Zealand and several provinces in Canada. Since then, the UK has established NICE (1999) and several other European countries request economic analyses for at least some new medicines, including Belgium, Finland, Ireland, Norway, The Netherlands, Portugal and Germany. Similar policies have been adopted recently in some Eastern European countries, Asia and Latin America. CEA also is used in the United States by some Medicaid programs, private insurers and health care providers, although its expansion under the 2010 health care law remains doubtful.
Adrian Towse has collaborated with outside experts in preparing a chapter that addresses key issues in the forthcoming Oxford Handbook on the Economics of the Biopharmaceutical Industry. The authors outline the evolution of CEA through its use as part of HTA. They also explore the theoretical and practical issues that have arisen as the result of using CEA of drugs to make decisions about resource allocation, pricing and use. The authors’ conclusions, in part, are that:
Towse, A., Drummond, M. and Sorenson, C. Measuring value: Pharmacoeconomics in theory and practice. In Danzon, P. and Nicholson, S. Oxford handbook on the economics of the biopharmaceutical industry. Oxford: Oxford University Press. (forthcoming).
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