Willingness-to-Pay for a New Pharmaceutical: Is it Worth the Money? Whose Money?

This study seeks to provide evidence for deciding whether or not a new pharmaceutical should be included in the benefit list of social health insurance. A discrete-choice experiment (DCE) was conducted in Germany to measure preferences for modern insulin therapy using long-acting insulin analogue ”insulin detemir” in comparison to NPH insulin. The DCE contains two price attributes, copayment and increased contributions to health insurance. Of the 1,100 individuals interviewed in 2007, 200 suffered from type 1, 150 from insulin-treated type 2, and 150 from insulin-naive type 2 diabetes. This allows to compare ex-ante and ex-post willingnessto-pay (WTP). Non-diabetics and insulin-naive diabetics exhibit higher WTP values through copayment, while affected type 1 and insulin-treated type 2 diabetics have higher WTP through increased contributions. However, WTP values exceed the extra treatment cost in both financing alternatives, justifying inclusion of the new drug in the benefit list from a cost-benefit point of view. JEL-Classification: I11, H51, I18