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In Reply: Decisions on health care resource allocation, made with incomplete information, will always be imperfect. When faced with a fixed health budget and a goal of maximizing population health, as measured by an index such as the QALY, the optimal rule is to rank all independent health interventions in descending order of efficiency determined by dollar per QALY gained and then run down the list funding interventions until running out of money.¹ At that point the last intervention funded would have a threshold ICER that reflected our willingness to pay for an extra QALY for a given budget. In cases in which budgets are small (as in low-income countries), the threshold ICER will have to be much lower than in high-income countries; this is the basis of proposals for differential pricing of essential medicines, which attempts to equalize opportunity costs in different settings.² In cases in which a new . . . [Full Text of this Article]

Anthony Harris, MA, MSc
Centre for Health Economics
Monash University
Victoria, Australia

Suzanne R. Hill, MBBS, PhD, FAFPHM; David A. Henry, MB, FRCP
david.henry@newcastle.edu.au
School of Medicine and Public Health
University of Newcastle
New South Wales, Australia

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