The Negative Side of Cost-effectiveness Analysis
Abstract
To the Editor. —We agree with Drs Sacristán and Obenchain1that careful analysis of uncertainty is an essential element of sound pharmacoeconomic evaluations. However, their suggestion that a confidence interval (CI) should be reported for the cost-effectiveness (C/E) ratio of an intervention having a significant probability of a negative C/E ratio may prove problematic in applications. Most troubling is the fact that the magnitude of a negative C/E ratio—defined as the ratio of incremental cost (AC) to incremental effectiveness (△E)—conveys no useful information. For example, it is clear that an estimate of AC =-100, △E =100 is more favorable than an estimate of AC =-100, △E=50, which in turn is more favorable than an estimate of AC=-50, △E=50. However, this implies that a C/E ratio of-1 (-100/100) is preferable to a ratio of -2 (-100/50), and yet a ratio of-2 (-100/50) is preferable to a ratio of -1 (-50/50).
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Negative incremental cost-effectiveness ratios (ICERs) are meaningless.
“In presenting one-way uncertainty analysis, reporting negative incremental cost-effectiveness ratios (ICERs) should be avoided as they are meaningless [26,27].”
From Model Parameter Estimation and Uncertainty: A Report of the ISPOR-SMDM Modeling Good Research Practices Task Force-6 (2012) · cites this paper as [27]
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Briggs, A. H., Weinstein, M. C., Fenwick, E. A. L., Karnon, J., Sculpher, M. J., & Paltiel, A. D. (2012) · Value in Health · doi:10.1016/j.jval.2012.04.014 · Cited by 711 · see citing works
Clarke, P., Gray, A., Adler, A., Stevens, R., Raikou, M., Cull, C., Stratton, I., & Holman, R. (2001) · Diabetologia · doi:10.1007/s001250051617 · Cited by 99 · see citing works
- Authors
- Mullahy, J.
- Corresponding author
- Mullahy, John
- ORCID
- Mullahy, John
- Venue
- JAMA: The Journal of the American Medical Association
- Publisher
- American Medical Association (AMA)
- Published
- 1997-06-25
- Volume
- 277
- Issue
- 24
- Pages
- 1931
- ISSN
- 0002-9955 (ISSN-L)
- 0098-7484
- OpenAlex
- W1970636875
- Cited by
- 40
- References
- 0
- Citations by year
- 2026: 1 · 2025: 2 · 2022: 1 · 2017: 2 · 2016: 1 · 2014: 2 · 2012: 3
- FWCI
- 11.79
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- JAMA (publishedVersion)
- PubMed (publishedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Health Systems, Economic Evaluations, Quality of Life
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Pharmaceutical Economics and Policy
- Health Sciences › Health Professions › General Health Professions › Healthcare cost, quality, practices
- Keywords
- cost-effectiveness ratio, uncertainty analysis, confidence intervals, incremental cost, pharmacoeconomic evaluation
- MeSH terms
- Cost-Benefit Analysis, Confidence Intervals
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