Pharmacoeconomics 2009;

Cost-effectiveness analysis (CEA) represents the most important tool in the health economics literature to quantify and qualify the reasoning behind the optimal decision process in terms of the allocation of resources to a given health intervention. However, the practical application of CEA in the regulatory process is often limited by some critical barriers, and decisions in clinical practice are frequently influenced by factors that do not contribute to efficient resource allocation, leading to inappropriate drug prescription and utilization. Moreover, most of the time there is uncertainty about the real cost-effectiveness profile of an innovative intervention, with the consequence that it is usually impossible to obtain an immediate and perfect substitution of a product with another having a better cost-effectiveness ratio. The objective of this article is to propose a rational approach to CEA within regulatory processes, basing our analysis in a Bayesian decisiontheoretic framework and proposing an extension of the application of well known tools (such as the expected value of information) to such cases. The regulator can use these tools to identify the economic value of reducing the uncertainty surrounding the cost-effectiveness profile of the several alternatives. This value can be compared with the one that is generated by the actual market share of the different treatment options: one that is the most cost effective and others in the same therapeutic category that, despite producing clinical benefits, are less cost effective. Since the milestone paper by Weinstein and Stason, cost-effectiveness techniques have long been established in the healthcare arena. At present, this type of economic analysis (as well as the very much related cost-utility analysis) is the most frequently used in the evaluation of new biomedical technologies (pharmaceutical drugs and procedures), and much literature has been devoted to its formalization, increasingly often under a Bayesian statistical approach. However, the application of this technique to real practice decision making has found several critical barriers (outlined in the next section) in different countries. In Italy, for instance, cost effectiveness is hardly considered when deciding about marketing, reimbursement or pricing of new technologies. In effect, the decisions in clinical practice are frequently influenced by factors that do not contribute to an efficient resource allocation, leading to inappropriate drug LEADING ARTICLE Pharmacoeconomics 2009; 27 (8): 645-655 1170-7690/09/0008-0645/$49.95/0 a 2009 Adis Data Information BV. All rights reserved.