Working Paper: NBER ID: w27978
Authors: Rena M. Conti; Jonathan Gruber; Daniel A. Ollendorf; Peter J. Neumann
Abstract: There is a coming wave of novel genetic therapies aiming to treat rare pediatric disease. A large literature investigates the valuation of new treatments, but the valuation of treatments for rare pediatric illness raises a host of unique issues. In this paper, we review the challenges of applying both the standard economic model and standard approaches to estimating cost-effectiveness using the quality-adjusted life year (QALY) to this case. We argue that there are a large number of special issues that have only been partially addressed by past work and we conclude that more data and the development of new methods are vital as innovators, health technology assessment practitioners and policymakers confront the launch of these new drugs.
Keywords: rare pediatric diseases; valuation; cost-effectiveness analysis; health technology assessment; genetic therapies
JEL Codes: I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| market failures (D52) | inaccurate pricing signals for rare pediatric drugs (D49) |
| imperfect information and agency problems (D82) | market failures (D52) |
| medical expert reliance (I11) | suboptimal decision-making regarding treatment options (D91) |
| high development and manufacturing costs (O39) | exorbitant prices of new genetic therapies (P22) |
| incremental benefits over next best alternative (D61) | value of a drug (D46) |
| standard economic models (E19) | inadequacy in addressing unique considerations for pediatric populations (I24) |
| societal perspective in valuation (H43) | broader impacts on families and communities (J12) |
| traditional QALY measures (J17) | inadequate capture of benefits of pediatric treatments (I18) |
| addressing issues in valuation (G32) | development of appropriate valuation frameworks for rare pediatric drugs (H43) |