Australian guidelines for cost-effectiveness studies of pharmaceuticals: the thin end of the boomerang?

In the summer of 1990, the Australian Government took a major step by requiring evidence of cost-effectiveness of new medicines prior to reimbursement by the public health care system. This paper assesses whether the methodological principles behind the guidelines are sound and whether they raise important new logistical and policy implications. It is concluded that, while the guidelines may represent the 'thin end of the wedge' for the pharmaceutical industry, in that other countries may follow the Australian lead, they also may represent the 'thin end of the boomerang' for government. Namely, the development of explicit guidelines for public funding decisions concerning new health technologies places as many demands on funders (the government) as it does on the suppliers (the industry).