Pricing implications of non-marginal budgetary impacts in health technology assessment: a conceptual model

Research output: Working paperDiscussion paper

Standard

Pricing implications of non-marginal budgetary impacts in health technology assessment : a conceptual model. / Howdon, Daniel David Henry; Lomas, James Richard Scott.

York, UK : Centre for Health Economics, University of York, 2017. p. 1-17 (CHE Research Paper; No. 148).

Research output: Working paperDiscussion paper

Harvard

Howdon, DDH & Lomas, JRS 2017 'Pricing implications of non-marginal budgetary impacts in health technology assessment: a conceptual model' CHE Research Paper, no. 148, Centre for Health Economics, University of York, York, UK, pp. 1-17. <https://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP148_pricing_non-marginal_budgetary_impacts.pdf>

APA

Howdon, D. D. H., & Lomas, J. R. S. (2017). Pricing implications of non-marginal budgetary impacts in health technology assessment: a conceptual model. (pp. 1-17). (CHE Research Paper; No. 148). Centre for Health Economics, University of York. https://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP148_pricing_non-marginal_budgetary_impacts.pdf

Vancouver

Howdon DDH, Lomas JRS. Pricing implications of non-marginal budgetary impacts in health technology assessment: a conceptual model. York, UK: Centre for Health Economics, University of York. 2017 Nov, p. 1-17. (CHE Research Paper; 148).

Author

Howdon, Daniel David Henry ; Lomas, James Richard Scott. / Pricing implications of non-marginal budgetary impacts in health technology assessment : a conceptual model. York, UK : Centre for Health Economics, University of York, 2017. pp. 1-17 (CHE Research Paper; 148).

Bibtex - Download

@techreport{f09024de9efa43fd8713b3351688eb08,
title = "Pricing implications of non-marginal budgetary impacts in health technology assessment: a conceptual model",
abstract = "This paper introduces a framework by which to conceptualise the decision-making process in health technology assessment when the quantity of health forgone by acceptance is high enough such that the use of a single threshold based on the marginal productivity of the health care system is inappropriate,and draws out the implications of this for pharmaceutical pricing. Under the condition of perfect divisibility, a large budgetary impact of a new treatment may imply that optimal implementation may be partial rather than full, even at a given incremental cost effectiveness ratio (ICER) that would nevertheless mean the decision to accept the treatment in full would not lead to a net reduction in health. In a one-shot price setting game, this seems to give rise to horizontal equity concerns which may be more apparent than real. When the assumption of fixity of the ICER (arising from the assumed exogeneity of the manufacturer{\textquoteright}sprice) is relaxed, it can be shown that the threat of partial implementation may be sufficient to give rise to an ICER at which cost the entire potential population is treated, maximising health at an increased level, and with no contravention of the horizontal equity principle.",
keywords = " health technology assessment, economic evaluation, budgetary impact",
author = "Howdon, {Daniel David Henry} and Lomas, {James Richard Scott}",
year = "2017",
month = nov,
language = "English",
series = "CHE Research Paper",
publisher = "Centre for Health Economics, University of York",
number = "148",
pages = "1--17",
type = "WorkingPaper",
institution = "Centre for Health Economics, University of York",

}

RIS (suitable for import to EndNote) - Download

TY - UNPB

T1 - Pricing implications of non-marginal budgetary impacts in health technology assessment

T2 - a conceptual model

AU - Howdon, Daniel David Henry

AU - Lomas, James Richard Scott

PY - 2017/11

Y1 - 2017/11

N2 - This paper introduces a framework by which to conceptualise the decision-making process in health technology assessment when the quantity of health forgone by acceptance is high enough such that the use of a single threshold based on the marginal productivity of the health care system is inappropriate,and draws out the implications of this for pharmaceutical pricing. Under the condition of perfect divisibility, a large budgetary impact of a new treatment may imply that optimal implementation may be partial rather than full, even at a given incremental cost effectiveness ratio (ICER) that would nevertheless mean the decision to accept the treatment in full would not lead to a net reduction in health. In a one-shot price setting game, this seems to give rise to horizontal equity concerns which may be more apparent than real. When the assumption of fixity of the ICER (arising from the assumed exogeneity of the manufacturer’sprice) is relaxed, it can be shown that the threat of partial implementation may be sufficient to give rise to an ICER at which cost the entire potential population is treated, maximising health at an increased level, and with no contravention of the horizontal equity principle.

AB - This paper introduces a framework by which to conceptualise the decision-making process in health technology assessment when the quantity of health forgone by acceptance is high enough such that the use of a single threshold based on the marginal productivity of the health care system is inappropriate,and draws out the implications of this for pharmaceutical pricing. Under the condition of perfect divisibility, a large budgetary impact of a new treatment may imply that optimal implementation may be partial rather than full, even at a given incremental cost effectiveness ratio (ICER) that would nevertheless mean the decision to accept the treatment in full would not lead to a net reduction in health. In a one-shot price setting game, this seems to give rise to horizontal equity concerns which may be more apparent than real. When the assumption of fixity of the ICER (arising from the assumed exogeneity of the manufacturer’sprice) is relaxed, it can be shown that the threat of partial implementation may be sufficient to give rise to an ICER at which cost the entire potential population is treated, maximising health at an increased level, and with no contravention of the horizontal equity principle.

KW - health technology assessment

KW - economic evaluation

KW - budgetary impact

M3 - Discussion paper

T3 - CHE Research Paper

SP - 1

EP - 17

BT - Pricing implications of non-marginal budgetary impacts in health technology assessment

PB - Centre for Health Economics, University of York

CY - York, UK

ER -