Question

An existing medication for diabetes has an average cost per person of $5,705, and a calculated...

An existing medication for diabetes has an average cost per person of $5,705, and a calculated measure of effectiveness of 100 QALYs. A new medication would cost $6,683 with a measure of effectiveness of 80 QALYs.

  1. Estimate the incremental cost-effectiveness ratio equation. (15 pts).
  2. Is the new the new medication be cost-effective? (15 pts)
  3. What does your answer means in terms of costs and QALYs?(20 pts)

Hint: consider the following graph to provide your answer.

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Homework Answers

Answer #1

1.Incremental cost effectiveness ratio= Cost of b-Cost of a/Effectiveness of b - Effectiveness of a

=> 5705-6683/80-100

=> - 48.9/QUALYs

2) The new medicine is not cost effective since, it accompanies expanded expense and it is less compelling, as we take a look at the above answer we can see that there is a negative adequacy. Accordingly we can say that old treatment overwhelms.

3)The QUALYs diminishes by 20 with an expanded expense of 978$, which shows that old treatment furnishes higher quality with lesser cost, which implies that new drug is dismissed.

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