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A new paper, published last week in Applied Economics, by Dimitrios Kourouklis, Senior Economist at OHE, looks at the question of whether government funding increases public sector development of new medicines. Looking at public sector drug development in Europe, this paper suggests that government funding does have an impact on the research and development pipeline, particularly at the earlier stages of research for medicines targeting rare diseases.

This research paper examines whether value of a life estimates used in economic evaluation differs between government departments in a selection of developed countries. The authors find that generally estimates used in transport and the environment exceeded those used in health, which suggests that health may be undervalued by departments of health compared to departments of transport or environment.

Using medicines in combination can deliver better outcomes for patients across different tumour types and disease stages. Yet many HTA agencies do not find that the expected additional benefits from adding a new medicine to a currently reimbursed medicine represents value for money to the health system. In markets that utilise cost-per-QALY approaches for assessing value, a clinically effective medicine might even be found to be “not cost-effective at zero price” when used as part of a regimen that increases treatment duration.

Members from the team at OHE attended the Health Economists’ Study Group (HESG) Winter 2021 Meeting, hosted online by the Centre for Health Economics in London, LSHTM, from 6th-8th January 2021.

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