Publications

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:

November 17, 2022

Bibliographic citation:

Levaggi, Rosella; Pertile, Paolo, Which valued-based price when patients are heterogeneous? «Health Economics» , 2020 , pp. 1-14

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