Publications

Which valued-based price when patients are heterogeneous?  (2020)

Authors:
Levaggi, Rosella; Pertile, Paolo
Title:
Which valued-based price when patients are heterogeneous?
Year:
2020
Type of item:
Articolo in Rivista
Tipologia ANVUR:
Articolo su rivista
Language:
Inglese
Referee:
No
Name of journal:
Health Economics
ISSN of journal:
1057-9230
Page numbers:
1-14
Keyword:
personalized medicine; precision medicine; static and dynamic efficiency; value-based prices
Short description of contents:
We use a simple model to study the static and dynamic efficiency of alternative regulation regimes for the reimbursement of medical innovations when responses to a new treatment (effectiveness) are heterogeneous across the eligible population. When the rational behavior of profit-maximizing firms is taken into account, only average value-based prices can ensure both static and dynamic efficiency, but they imply higher expenditure and lower consumer surplus. Ignoring dynamic efficiency, if patients' responses are sufficiently homogeneous, marginal value-based prices may dominate from the payer's perspective. We also present a refinement of average value-based prices that could reverse this result. Overall, the cost of ensuring static and dynamic efficiency is increasing in the degree of heterogeneity. A real-world example is used to illustrate these results.
Product ID:
115039
Handle IRIS:
11562/1020031
Last Modified:
December 1, 2020
Bibliographic citation:
Levaggi, Rosella; Pertile, Paolo, Which valued-based price when patients are heterogeneous? «Health Economics»2020pp. 1-14

Consulta la scheda completa presente nel repository istituzionale della Ricerca di Ateneo IRIS

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