Intended for healthcare professionals


Promoting cost effective prescribing

BMJ 1995; 310 doi: (Published 15 April 1995) Cite this as: BMJ 1995;310:955
  1. Nick Freemantle,
  2. David Henry,
  3. Alan Maynard,
  4. George Torrance
  1. Research fellow Centre for Health Economics, University of York, York YO1 5DD
  2. Senior lecturer in clinical pharmacology Faculty of Medicine and Health Science, University of Newcastle, Newcastle, New South Wales, Australia
  3. Director Centre for Health Economics, University of York, York YO1 5DD
  4. Professor Centre for Health Economics and Policy Analysis, McMaster University, Hamilton, Canada

    Britain lags behind

    In many countries the cost effectiveness of drugs is receiving increasing attention. Rising budgets have heightened concerns about containing costs and whether resources are used efficiently.1 The need for rigorous examination of cost effectiveness as well as clinical effectiveness has been argued for.2 3 4 The message is clear: doctors may prescribe an effective drug to patients who will benefit, but if the drug is not cost effective they may be using resources that would produce greater benefit for other patients for the same cost.

    Expensive drugs require the use of limited resources, which, once deployed are not available for other activities that may bring greater benefits for patients. When an expensive drug is shown to be cost effective, however, its use is justified by the additional benefits it brings. To use scarce resources efficiently the careful and explicit measurement of the value of what is given up (the opportunity cost) and the value of what is gained (for example, improvements in the length and quality of life) is essential. The measurement of cost alone or effectiveness alone will produce inefficiency as a rational health care system finances expensive alternatives to existing treatments only if these bring additional benefits commensurate with the cost.

    The pharmaceutical industry has been quick to realise the potential of economic analyses in promoting new and expensive products.5 Governments have also recognised the importance of economic …

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