THE ROLE OF COST-CONSEQUENCE ANALYSIS IN HEALTH-CARE DECISION-MAKING

A greater understanding of value associated with new pharmaceutical pr oducts should lead to better decision-making. Most commonly cost-effec tiveness ratios (CERs) are used to indicate value; however, researcher s have recently shown that CER estimates are rarely used by decision-m akers in making formulary decisions. In this article, a cost-consequen ce approach to estimating the value for money of a new treatment for a specific disease is described. Using a cost-consequence approach, the impact of the new treatment on lifetime resource use and costs (inclu ding specific healthcare service use and costs, and productivity losse s) and health outcomes (including disease symptoms, life expectancy an d quality of life) for an individual or group of individuals is estima ted and presented in a tabular format. The cost-consequence format is more likely to be approachable, readily understandable and applied by healthcare decision-makers than a simple CER. The decision-maker may u se selected items from the cost-consequence analysis to compute compos ite measures of drug value, such as cost per life-year gained or cost per quality adjusted life-year (QALY) gained. In general, the cost-con sequence approach, by making the impact of the new treatment as compre hensive and transparent as possible, will enable decisionmakers to sel ect the components most relevant to their perspective and will also gi ve them confidence that the data are credible to use as the basis for resource allocation decisions.