Probabilities and utilities of each regulatory policy

This example is very simple and restrictive, but it is useful to illustrate the idea that economic evaluation can help to regulate the approval of pharmaceuticals. It also shows that one of the lessons to be leamt from applying the rules of economic evaluation is that the way dmg approval is regulated should change from one dmg to another, depending on the costs and benefits of each option. 

The role that economic evaluation can play in pharmaceutical pricing varies with the type of regulation carried out in each country it cannot play the same role in a country such as the USA, where there is freedom of prices, and in a country where pricing is regulated. 

Once the price has been fixed, the next decision is whether or not the drag should be financed. This decision falls either to the patient, if it is he or she who pays, or a third party, which could mean the government, an insurance company, an institution such as an HMO, or some other. In the first case, the patient does the economic evaluation when he or she decides whether to buy 

The answer given by economic evaluation to the question of whether a given product should be financed or not seems to be fairly clear. However, the decision rules mentioned above clash with certain problems, and neither these problems nor some possible solutions should be overlooked. 

This generates problems of discrimination between some patients and others, which can on occasions amount to a major political problem. It may be more normal to assume that, once a drug is financed, it will be consumed by a wide variety of patients. Furthermore, it may not be feasible in practice to discriminate between patients for whom the treatment is highly effective and those for whom it is less so. 

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Table 8.4 Probabilities and utilities of each regulatory policy...

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