Cost-effectiveness analysis (CEA) is commonly used to inform the assessment of value from new healthcare technologies. However, traditional CEA methods often fail to capture important components of social value for biopharmaceutical and other innovations. Two examples are the failure of traditional CEA to account for diminishing returns to health improvement and its failure to account for declines in price as products lose market exclusivity, both of which would appear in “generalized cost- effectiveness analyses” (GCEA).

We investigated the effect of these two elements of social value on traditional CEA value assessments in our white paper.