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Sunday, 15 October 2006


Bohdan Nosyk, MA1, Nick J. Bansback, MSc1, Xin Li, PhD2, Daphne P. Guh, MSc1, Huiying Sun, PhD1, and Aslam H. Anis, PhD2. (1) St. Paul's Hospital, Vancouver, BC, Canada, (2) University of British Columbia, Vancouver, BC, Canada

Purpose: Budgetary Impact Analysis (BIA) is considered a complement to cost-effectiveness analysis in the decision-making process in allocating scarce healthcare resources. Despite this, little progress has been made in the development of methods with which to estimate increases in utilization through changes in market share, or product diffusion, a key component of BIA. Our objective is to perform a systematic review to assess the means by which estimation of product diffusion have been incorporated into guidelines and BIA studies.

Methods: We performed a search of the Medline, Pubmed and NHS Economic Evaluation Databases using the keywords 'budget impact analysis' and 'financial impact analysis and pharmaceuticals'. National guidelines for a selection of countries were also reviewed and assessed for the requirement of BIA in formulary submissions and the methods recommended.

Results: 9 national formulary submission guidelines and 33 relevant articles (5 guidelines and 28 empirical studies) of a total 398 reviewed were included in the study. Among the 14 guidelines reviewed, 12 requested BIAs and 8 identified the estimation of product diffusion as a required component of BIA. None however indicated any clear methodology to perform this element of the analysis. Among the 28 empirical studies, 10 (36%) chose to evaluate several different (arbitrary) scenarios of product diffusion, while the remainder (18 (64%)) estimated budgetary impact under the assumption of total market capitalization. None of the articles reviewed attempted any formal analytical methodology with which to explicitly model the rate of product diffusion.

Conclusion: Estimating the rate of diffusion of a pharmaceutical product is among the primary methodological components in BIA, however methods with which to conduct such analyses are presently lacking. We propose to draw upon the well-developed economic theory of product diffusion, which is carried out in three steps: 1) estimation of quality-adjusted prices, (indicated by such factors as frequency of dosage and toxicity), 2) estimation of equilibrium market shares and saturation levels based upon quality-adjusted prices, and 3) dynamic product diffusion is then estimated as products reach their equilibrium market shares. The development of more rigorous means of estimating the budgetary impact of new health technologies will improve the precision of evidence with which formulary decisions are made.

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See more of The 28th Annual Meeting of the Society for Medical Decision Making (October 15-18, 2006)