Health economic assessment

Health economic assessment compares the cost and health outcomes of a health product with those of the available alternatives, in order to assess its efficiency. In France, it falls to the Committee for Economic and Public Health Assessment of the French National Authority for Health, which issues a cost-effectiveness opinion for products claiming a high improvement in actual clinical benefit and likely to have a significant impact on health insurance expenditure. This opinion is sent to the Economic Committee for Health Products for the purposes of the price negotiation.

The method

The analysis relates the difference in cost between the product and its comparator to the difference in health outcomes, which produces an incremental cost-effectiveness ratio. Outcomes are most often expressed in quality-adjusted life years, which weight the life years gained by quality of life. The French National Authority for Health publishes a methodological guide and examines the quality of the modelling, the cost sources and the handling of uncertainty. A budget impact analysis may supplement the assessment.

Scope of the cost-effectiveness opinion

Unlike some foreign systems, French law sets no official threshold of cost per life year gained above which a product would be rejected. The cost-effectiveness opinion informs pricing without binding the Committee, which remains guided first and foremost by the improvement in actual clinical benefit. An unfavourable conclusion, or significant methodological reservations, nonetheless considerably weaken the company’s position in the negotiation.

Health economic assessment and asset value

Health economic models provide an estimate of the value a health system attributes to an innovation. They may be used in the valuation of intellectual property assets, in negotiating royalties under a licence covering a product in development and, with caution, in analysing the loss caused by infringement. Their assumptions must then be tested against the prices and volumes actually achieved, which alone reflect market reality.

Key points

Health economic assessment measures efficiency and weighs on the price without determining it alone. It should be checked early whether the product requires a cost-effectiveness opinion, and the model built according to the method published by the French National Authority for Health. In a licence negotiation or an asset valuation, the model submitted to the authorities offers a valuable basis for discussion, provided its limits are understood.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats acts in pharmaceutical patent disputes and on the medicines regulatory questions that accompany them, from the marketing authorisation to the supplementary protection certificate.

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