Cost Effectiveness in Low- and Middle-Income Countries: A Review of the Debates Surrounding Decision Rules

Samuel Shillcutt, Damian Walker, Catherine Goodman and Anne Mills
Additional contact information
Samuel Shillcutt: Department of International Health, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland, USA
Damian Walker: Department of International Health, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland, USA
Catherine Goodman: Kenya Medical Research Institute/Wellcome Trust Research Programme, Nairobi, Kenya Department of Public Health Policy, London School of Hygiene Tropical Medicine, Keppel Street, London, UK
Anne Mills: Department of Public Health Policy, London School of Hygiene Tropical Medicine, Keppel Street, London, UK

PharmacoEconomics, 2009, vol. 27, issue 11, pages 903-917

Abstract: Cost-effectiveness analysis (CEA) is increasingly important in public health decision making, including in low- and middle-income countries. The decision makers' valuation of a unit of health gain, or ceiling ratio (λ), is important in CEA as the relative value against which acceptability is defined, although values are usually chosen arbitrarily in practice. Reference case estimates for λ are useful to promote consistency, facilitate new developments in decision analysis, compare estimates against benefit-cost ratios from other economic sectors, and explicitly inform decisions about equity in global health budgets. The aim of this article is to discuss values for λ used in practice, including derivation based on affordability expectations (such as $US150 per disability-adjusted life-year [DALY]), some multiple of gross national income or gross domestic product, and preference-elicitation methods, and explore the implications associated with each approach. The background to the debate is introduced, the theoretical bases of current values are reviewed, and examples are given of their application in practice. Advantages and disadvantages of each method for defining λ are outlined, followed by an exploration of methodological and policy implications.

JEL-codes: C D I Z I1 I19 I18 I11 (search for similar items in EconPapers)
Date: 2009

Downloads: (external link)
http://PharmacoEconomics.adisonline.com/pt/re/phe/ ... -200927110-00003.pdf (application/pdf)
http://PharmacoEconomics.adisonline.com/pt/re/phe/ ... -200927110-00003.htm (text/html)
Pay per view

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:wkh:phecon:v:27:y:2009:i:11:p:903-917

Access Statistics for this article

PharmacoEconomics is edited by Christopher I. Carswell, MSc, MRPharmS

More articles in PharmacoEconomics from Wolters Kluwer Health | Adis
Series data maintained by Remco Bouckaert ().