Unbiased Analysis of Today's Healthcare Issues

Insurance value of multiple sclerosis therapies

Written By: Jason Shafrin - Nov• 27•16

An interesting paper from Shih et al. in this month’s edition of AJMC finds that–due to risk aversion–healthy individuals actually place a high value on the development of new treatments for multiple sclerosis.

Results: In the baseline model, Avonex, Tysabri, and Tecfidera generated $46.2 billion of total value to consumers, almost one-third of which accrued to those without MS. The total value to consumers was double manufacturer revenue. Results were qualitatively robust to the use of alternate epidemiological and economic parameters. We found that value to the healthy is positively related to disease severity, and that value to both the sick and the healthy are larger when costs are shared via health insurance.

Conclusions: Theory predicts that treatments for severe disease provide “peace of mind” value to the healthy. Avonex, Tysabri, and Tecfidera have generated significant social value, a large majority of which accrues to consumers. Future economic valuations of medical technology should consider both the potential value to the healthy and the effects of insurance.

Specifically, the authors find that when patients bear the full cost of treatment, the value of the 3 disease modifying treatments (DMTs) to patients with MS totals $11.1 billion, whereas the value to the healthy is $8.9 billion. In other words, 44.5% of health care value from DMTs accrues to healthy individuals.

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