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Methods and Applications of Statistics in Clinical Trials, Volume 2: Planning, Analysis, and Inferential Methods by N. Balakrishnan

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Chapter 8

Cost-Effectiveness Analysis

Morven Leese

8.1 Introduction

In health economics, evidence from both clinical and economic perspectives is considered together. The result might be to prioritize interventions, set research priorities, or devise a definitive recommendation about whether a specific intervention should be adopted as being both clinically effective and good value for money. The first step in a health economics study would be to gather and present costs and clinical consequences side by side, without them necessarily being entered into a formal cost-effectiveness analysis (a process referred to as a “cost-consequence” analysis). Cost-effectiveness analysis (CEA) in a clinical trial, as discussed in this article, is a more specific analysis that takes this process a step further. It typically aims to provide information about the value for money of a small number of competing treatments, often just two—the new intervention and its comparator.

This comparison is usually expressed through the incremental cost-effectiveness ratio (ICER), which is the cost per unit of benefit obtained from the intervention compared with the comparator. A related measure is the incremental net benefit (INB), which is the overall net cost for a given willingness-to-pay per unit of benefit. The INB has recently become much more widely used for inferential purposes than the ICER, because of analytical problems that develop from the ICER’s ratio form. However, the comparison made directly ...

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