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To the Editor: In their Commentary on drug prices and value for money, Dr Henry and colleagues¹ contrast ways in which the British National Institute for Clinical Excellence and the Australian Pharmaceutical Benefits Scheme use cost-effectiveness analysis (CEA) to assess the value of medical technologies, including newly approved drugs. They assert that if a drug is cost-effective it should be affordable to the third-party payer, so long as the "cost-effectiveness threshold has been set appropriately." I believe that this is incorrect for 2 reasons.

First, a new drug may have a favorable incremental cost-effectiveness ratio (ICER) yet be considered unaffordable to the third-party payer because of the eligibility of large numbers of patients for the new treatment. Bupropion, orlistat, and sildenafil are examples of drugs that some third-party payers in Europe and the United States have deemed unaffordable despite having generally favorable ICERs.² Cost-effectiveness analysis compares the additional costs and . . . [Full Text of this Article]

Joshua P. Cohen, PhD
joshua.cohen@tufts.edu
Tufts University Center for the Study of Drug Development
Boston, Mass

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