1. Suppose that you are asked to conduct a CEA of an experimental treatment for
ID: 1128218 • Letter: 1
Question
1. Suppose that you are asked to conduct a CEA of an experimental treatment for Zika:
Without treatment, the average patient’s life-expectancy is 0.5 QALYs. With treatment, the average patient’s life-expectancy is 25 QALYs. The current cost of the treatment is $50,000.
Calculate and show on a graph the ICER.
b) There are actually different companies working on a similar treatment, with prices ranging from $30,000 to $60,000. Modify your graph from part a) to incorporate this uncertainty, using these results as the lower- and upper-bound estimates (best case/ worst case) of cost.
c) Suppose there is also uncertainty about quality-adjusted life expectancy:
With treatment, life expectancy might be as low as 2.5 QALYs or as high as 30 QALYs.
d) Modify your graph from part b to incorporate the uncertainty in costs from part b and the uncertainty in effects from part c. [Hint: this is a rectangular area, not a confidence ellipsoid.]
Explanation / Answer
a. ICER = 50,000 * 0.5 = $25,000
50,000 * 25 = $125,0000.
So, ICER = $125,0000 - $25,000/25-0.5
= $1225,000/24.5
= $50,000/QALY
b. ICER = $60,000-$30,000/25-0.5
= $30000/24.5
= $1224.49/QALY.
c. ICER = $60,000-$30,000/30-2.5
= $30,000/27.5
= $1090.90/ QALY.
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