Does the use of cost effectiveness to support decisions undermine incentives for research and development in pharmaceuticals?

As health systems around the world seek to control the growth in their expenditure, many have adopted cost effectiveness analysis (CEA) to support decisions about which new medical technologies should be funded from limited budgets.  This development is particularly clear in the case of decisions about new pharmaceuticals for which CEA is used in countries including the UK, Canada, Australia, Belgium and Sweden.   These methods can inform resource allocation decisions that have the objective of maximising some measure of benefit from available resources.  Several authors have, however, argued that, when used in this way, CEA fails to provide sufficient return to manufacturers which, consequently, reduces the incentives they face to invest in research and development in new products.  This raises the question of whether health systems should pay a ‘R&D premium’ to ensure the flow of new pharmaceuticals into the future.   The seminar will debate these issues.  The speakers will present different perspectives on how to balance the objectives of the efficient use of limited health system budgets with incentivising manufacturers to invest in products for the future.

The speakers: 
Karl Claxton is a Professor in the Department of Economics and Related Studies and the Centre for Health Economics at the University of York.  He was a Harkness Fellow at the Harvard School of Public Health and until 2007 he held an adjunct appointment at Harvard as an Assistant Professor of Health and Decision Sciences.  His research interests encompass the methods for the evaluation of health care technologies. He has served as a member of the National Institute for Health and Clinical Excellence Appraisal Committee from 1999 to 2010 and more recently as a member of the newly formed Medical Technologies Appraisal Committee.   He has represented the committee at a number of appeals and was an expert witness for the Institute during judicial review. He is also a member of the National Decision Support Unit and continues to contribute to the development of the NICE Guide to the Methods of Technology Appraisal. He has contributed in a number of ways to recent policy debates such as pharmaceutical pricing and innovation, including as an expert witness at the House of Common Health Select Committee and the Kennedy review of Innovation in Health Technology.  A well as NICE he has also advised, Department of Health, HM Treasury, Department of Innovation and Skills and Office of Life Sciences.
 
Alistair McGuire is a Professor in Health Economics at LSE Health within the London School of Economics and Political Science. Prior to this he was Professor of Economics at City University, London after being a Tutor in Economics at Pembroke College, University of Oxford. He has written numerous books, articles and reports on health economics, as well as participating in many advisory roles to various committees. He has served, at various times, on a number of UK governmental committees including a UK Cabinet Office Committee on laparoscopic surgery, the UK Office of National Statistics Health Productivity Committee, the UK Food Standards Agency, on various Medical Research Council boards and on a number of NICE committees. He has advised a number of governments on health care issues, including the German IQWiG council on the reimbursement of pharmaceuticals. He teaches on the MSc in International Health Policy (Health Economics) at the LSE.
 
Attendance:  
If you are based outside the University of York and wish to attend the seminar, please contact Kerry Atkinson (kerry.atkinson@york.ac.uk) to reserve a place.

You can find details of how to find the Alcuin College on the Heslington Campus at http://www.york.ac.uk/np/maps/hes.htm; and a map of Alcuin (marking the ARRC Auditorium as A5) at http://www.york.ac.uk/np/maps/alcuin.htm.