Redefining Willingness-to-Pay

For a new treatment to be considered cost-effective (CE), the incremental cost-effectiveness ratio (ICER) must remain below a designated threshold, reflecting the maximum willingness of the payer. According to the World Health Organization (WHO), the Willingness-to-Pay (WTP) threshold is defined as “the monetary value that consumers are willing to pay for health-related benefits.” ¹

While WTP concept constitutes an integral part of the Health Technology Assessment (HTA) framework, it is explicitly defined in only a few jurisdictions.² A recent literature review of international WTP thresholds (WTP-T) by Klimes et al. (2023) sought to establish a foundation for the future development of WTP-T and to implement an equity-based approach that encompasses the value of products and addresses unmet needs across various interventions. Eligible countries for inclusion were Anglo-Saxon and Nordic countries, as well as other nations, namely France, the Netherlands, Germany, Belgium and Slovakia. These countries were selected due to their well-developed HTA frameworks, rendering them valuable sources of inspiration for other regions. In the countries studied, multiple WTP-T were observed, reflecting other factors including the added value of the intervention, level of innovation, lack of comparative treatments, severity and rarity of the disease, unmet medical need, clinical data uncertainties and budgetary impact analyses outcomes. The review highlighted that among the countries examined, which were selected as exemplars due to their well-established HTA frameworks, only five—specifically England, Scotland, the Netherlands, Canada and Slovakia—presented a clearly defined WTP-T. ² The absence of a widely accepted CE threshold is thus a barrier to the widespread adoption of cost-effectiveness analysis (CE) for decision-making in the health sector. ³

In the absence of explicitly defined official cost-effectiveness thresholds, many countries adopt the thresholds outlined in WHO publications as a widely accepted standard. ³ According to WHO, CE thresholds are based on GDP per capita per disability-adjusted life year (DALY) avoided, recommending a threshold of 1 to 3 times the GDP per capita of the country concerned. However, over the last decade, these thresholds have been subjected to considerable criticism, prompting the development of alternative methodologies to ascertain more robust estimations of cost-effectiveness thresholds. ³

In a recent publication in The Lancet Global Health, Pichon-Riviere et al. (2023) introduced a novel methodology for deriving cost-effectiveness (CE) thresholds based on health expenditure per capita and life expectancy at birth. This methodology has potential applicability in various national and health system contexts, where a specific target for increasing life expectancy and health expenditure per capita can be set for a given timeframe. As the majority of countries do not set specific targets for the change in the two variables, the publication provides guidelines for the empirical derivation of CE thresholds. ³

Harnessing data from the WHO database, a comprehensive analysis was conducted across 174 countries. Over the period spanning from 2010 to 2019, the average annual increase in the health care expenditure per capita ranged from 2-8% for low-income countries, 2-6% for lower middle-income countries, 2-4% for upper middle-income countries and 1-7% for high-income countries, while the average increases in life expectancy at birth were 0-44 years, 0-28 years, 0-21 years and 0-18 years, respectively. The ICER ranged between $87 (DRC) and $95,958 (US) per quality-adjusted life year (QALY), making it lower than 0.5 of GDP per capita in 96% of low-income countries, 76% of lower-middle-income countries, 31% of upper-middle-income countries and 26% of high-income countries. As these thresholds are lower than those widely used today, there is considerable debate within the international HTA community regarding acceptable thresholds for assessments. ³

1.Bertram  MY, Lauer  JA, De Joncheere  K,  et al.  Cost-effectiveness thresholds: pros and cons.  Bull World Health Organ. 2016;94(12):925–930.
2.Klimes, J. & Mlcoch, Tomas & Pásztor, Bálint & Tužil, Jan & Bulejova, L. & Decker, Barbora & Dostal, F. & Kminek, A. & Kolek, Martin & Kostern, M. & Kubesova, D. & Mazalova, M. & Michalek, G. & Novotna, K. & Spousta, Tomas & Stuchlik, O. & Tauchmanova, M. & Uherek, Štěpán & Volfová, Gabriela & Zivansky, M.. (2023). HPR171 WTP Threshold: A Review of International Approaches and Inspiration for Cultivation of Current Situation in the Czech Republic. Value in Health. 26. S284. 10.1016/j.jval.2023.09.1489.
3.Pichon-Riviere, A., Drummond, M., Palacios, A., Garcia-Marti, S., & Augustovski, F. (2023). Determining the efficiency path to universal health coverage: cost-effectiveness thresholds for 174 countries based on growth in life expectancy and health expenditures. The Lancet. Global health, 11(6), e833–e842. https://doi.org/10.1016/S2214-109X(23)00162-6