We build cost effectiveness models that assess the value of interventions. These models compare a new intervention to a standard of care with respect to two key endpoints: (1) the benefits received and (2) the costs incurred. The output is commonly expressed as the incremental cost-effectiveness ratio (ICER), which is the difference in cost divided by the difference in benefit. Sometimes, but not always, the benefit is estimated as quality adjusted life years (QALYs) in cost utility models. However, any other treatment outcome can be used (e.g., life years or events prevented). These models are one way of conducting comparative effectiveness research and are useful in the following ways:
To indentify key factors that influence the value of the intervention
To identify areas where additional research is needed to support the product’s value
To inform decision-making by a variety of health systems across the world
To contribute information to pricing decisions
To identify important market segments through use of subgroup and scenario analyses
Not all cost-effectiveness models are published. A selection of published models are listed below.