The Willingness to Pay for a QALY and type of disorder: a decision maker approach

Abstract: This study elicits “societal” willingness to pay (WTP) for a life-extending drug given to elderly patients with a terminal illness. Using a Contingent Valuation survey respondents are asked to consider themselves as societal decision makers voting on whether to reimburse the drug or not. The drug implies a QALY gain that varies between zero and 0.35. The Contingent Valuation survey is conducted using a web-panel of respondents in Sweden. In total we received around 1,400 responses. 

In light of the policy and academic discussion of a cancer-premium for medical technologies we also test if the type of disorder has an effect on the estimated WTP. Respondents were randomly selected into different survey treatments where the drug was stated to address a neutral (no label) disease, cancer-, psychiatric- or heart disease. 

Our baseline results show that WTP is not significantly different across neutral, cancer- or heart-disease framing, whereas it is significantly lower in the psychiatric disease framing. Other results show that WTP is increasing in age and income, and decreasing in self-reported health-related quality of life.  

Translating the results into a WTP for a QALY gives lower bound estimates at around 1 million Swedish kronor per QALY (approx. GBP 95,000), with a discount of around 30 percent for the psychiatric disease framing.