Use of pharmacoeconomics in prescribing research. Part 3: cost-effectiveness analysis - a technique for decision-making at the margin

Summary This is the third Research Note addressing pharmacoeconomics in prescribing research, reflecting the increasing use of economic evaluation in drug purchasing decisions in a variety of settings. In this segment we provide an overview of the theoretical basis, practical application and methodological limitations of cost-effectiveness analysis (CEA). Key message box Cost-effectiveness analysis is a technique to aid decision-making at the margin. Cost-effectiveness analysis is most readily applicable to questions of technical efficiency – questions of allocative efficiency can only be addressed where there is a common outcome measure. Difficulties of interpretation can occur when cost-effectiveness ratios are presented in terms of surrogate or intermediate endpoints.