Example of a utility function

Income (monetary units) Marginal utility of income Total utility 

Let us suppose that the population attaches a constant value to gains of identical health units, in this case QALYs. This means that the sacrifice, in terms of utility, that they are willing to make to gain a QALY is constant. However, the willingness to pay for each additional QALY is decreasing, as a result of the decreasing marginal utility of income. 

Let us suppose that there is one type of patient (A) with a disease that reduces their health status by 2 QALYs, and another type of patient (B) with a disease that reduces theirs by 10 QALYs. They are assumed to have several drugs available to them, and the more expensive the drug, the more effective it is and the more QALYs it enables them to gain Finally, we assume that the price of a drug is related to its effectiveness, and that the price of a drag rises by 1 monetary unit for each additional QALY it enables us to gain. Therefore, type A patients need a drug that costs 2 monetary units, and type B patients need one that costs 10 monetary units. 

Moreover, it is logical to assume that there is a limit to the sacrifice people 

The above example is extremely simple and is based on the assumption that the price of a drug is related to its therapeutic value. Nevertheless, it serves to illustrate how the principles of economic evaluation can be applied to the problem of fixing the percentage of drugs that should be covered by public financing. 

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