Abstract
This article discusses the need in the US pharmaceutical market for data that allow decision makers to compare the “value for money” offered by different drugs and describes how the techniques of cost-benefit analysis (CBA), cost-effectiveness analysis (CEA), quality-of-life (QOL) assessment, and cost-utility analysis (CUA) can be applied to satisfy this need. The application of these techniques to a drug therapy is described in terms of how the potential of a drug v a competitor can be assessed based on their respective product profiles, and how data can be collected for analysis purposes. The article concludes by identifying a number of major trends suggesting that demand for CBA/CEA and QOL data for pharmaceuticals will increase in the future. From a policy perspective, it is suggested that pharmaceutical competition based on cost-effectiveness evidence has the potential to improve economic efficiency in health care without government intervention.
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