Related Experiment Video
Updated: Aug 3, 2025

Author Spotlight: Cost-Effective Transcriptomic Drug Screening - Unlocking New Targets
Published on: February 23, 2024
A Model-Based Estimate of the Cost-Effectiveness Threshold in Germany
1Frankfurt School of Finance and Management, Adickesallee 32-34, 60322, Frankfurt am Main, Germany. a.gandjour@fs.de.
Purpose:
Value-based pricing of new, innovative health technologies defined as pricing through economic evaluation requires the use of a basic cost-effectiveness threshold. This study presents a cost-effectiveness model that determines the cost-effectiveness threshold for life-extending new, innovative technologies based on health system opportunity costs.
Methods:
To estimate health system opportunity costs, the study used German data and examined the period between 1896 and 2014. To this end, it determined intertemporal differences in the remaining lifetime spending and life expectancy by age and gender. To account for the age composition of the population, it weighted age-specific intertemporal changes in the remaining lifetime spending and life expectancy by the age-specific population size. To estimate life expectancy gains solely attributable to the health care system, it used aggregated data on amenable mortality. It calculated the cost-effectiveness ratio of health care spending in the German health care system on average and at the margin.
Results:
Based on the cost-effectiveness ratio of health care spending at the margin, the threshold value for life-prolonging new, innovative technologies was at least €42,634 per life-year gained, with a point estimate of €88,107 per life-year gained. Based on the average ratio, the threshold value dropped below €34,000 per life-year gained.
Conclusion:
This study provides new evidence on the cost-effectiveness threshold for value-based pricing of new, innovative technologies. Data from Germany suggest that a threshold value based on health care spending at the margin is considerably higher than that based on the average ratio.
Related Concept Videos
Pharmacokinetic Models: Comparison and Selection Criterion
Physiological models take a detailed approach by considering specific molecular processes. They can predict drug distribution, metabolism, and elimination changes, providing a comprehensive understanding of how drugs interact with the body.
Kaplan-Meier Approach
Types of Biopharmaceutical Studies: Controlled and Non-Controlled Approaches
Non-controlled studies, commonly employed for initial exploration, lack a control group, rendering them susceptible to biases and external influences. In contrast,...
One-Compartment Open Model: Wagner-Nelson and Loo Riegelman Method for ka Estimation
On...
Analysis Methods of Pharmacokinetic Data: Model and Model-Independent Approaches
The model approach uses mathematical models to describe changes in drug concentration over time. Pharmacokinetic models help characterize drug behavior in patients, predict drug concentration in the body fluids, calculate optimum dosage regimens, and evaluate the risk of toxicity. However, ensuring that the model fits the experimental data accurately...
Mechanistic Models: Compartment Models in Individual and Population Analysis

