Healthcare Economist November 4, 2024
Cost effectiveness analyses (CEA) aim to examine how a new health technologies impact health outcomes and costs over a patient’s lifetime. While extrapolating long-run health benefits and measuring potential cost offsets are important, another important item to estimate is how the cost of the new health technology is likely to evolve over times. This is particularly relevant for pharmaceuticals.
Whittington et al. (2024) write:
...A drug’s net price often increases following launch and may later fall as competitors enter the market. Prices usually fall more noticeably after the drug loses exclusivity and generic substitutes become available. However, CEAs in the past have rarely accounted for these possibilities and instead assume that a drug’s price remains constant over time.
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