Economic Evaluation in Medicinal Product Development


Economic evaluation process in the medicinal product development is an essential and integrated element in the process continuum of the medicinal product’s performance evaluations. Ideally, economic evaluation processes would advance better cost-effectiveness analysis on the potential economic impacts of the medicinal product in terms of cost-burden and performance. Among the economic evaluation analysis processes, which includes cost-minimization analysis (CMA), cost-effectiveness analysis (CEA), cost-utility analysis (CUA), cost-benefit analysis (CBA), and cost-efficiency analysis; the appropriateness of the analysis in evaluating the medicinal product performance evaluation depends on a case-by-case scenario. For instance, with a “me-too” cost-performance evaluations, cost-effectiveness analysis is an essential evaluation process. However, the other economic evaluation processes are relevant to a “me-too” product assessment because the integration of all the evaluation processes would give a broader perspectives on the overall objectives on the impacts of the economic assessment of the “me-too” development processes.

Economic Evaluation in Medicinal Product Development

Overall, a me-too medicinal product has very similar structural integrity or mode of action or clinical pathway to an alternative pioneer branded medicinal product for the treatment or management of the same condition or disease. With a me-too product, the major consumer challenge is the level of the effectiveness of the product in treating or managing the health condition or health outcome.  Also, the pioneer company may offer a drastic price reduction for the “me too” product compared to the alternative branded product. However, even when it is feasible to do so, the ultimate goal of seeking an alternative intervention is to achieve a realistic outcome reach (health improvement) and enhance the quality of life. Perhaps, the benefits derived from a product should outweigh the risks. It is even better when health improvement is achieved at a lower cost. In addition, for a “me too” product to be cost-efficient, the efficacy of a “me-too” product should at least show a similar or better effectiveness as any other available alternative products.

CEA compare alternatives, and measures in natural units, the primary goal of the product development processes (morbidity reduction, life years saved, functional ability on a scale, etc.) (Phillips, 2005; PHAC, n.d). Therefore, well-designed comparative studies are necessary to establish a statistical and clinical basis of cost-effectiveness analysis for a me-too product. It is more likely to market a me-too product over other competitive brand products when there are scientific data suggesting robust statistical and clinical significance of the alternative medicinal product. And when such evidence is lacking or absent, and no improved or added benefits are present, the product’s needs and desire (improved functional ability and quality of life) is reduced.

Ideally, improved functional ability is the pivotal beneficence outcome reach that consumers value more than the monetary cost to achieve similar health outcome. However, the societal impact of cost-effectiveness analysis is subjective and interpretive. Individuals may have different views on what their health goal is, and for that reason alone; it’s hard to generalize benefits derived from cost-effectiveness analysis (Phillips, 2005; Whitmore, 2004). After all, CEA assessments are easily criticized for its superficial focus on the outcome measures. Also, CEA assessments may be best served if the comprehensive economic evaluations include multi-dimensional outcome approaches (Phillips, 2005; PHAC, n.d.). Arguably, for outcome measures to be objective, specific and quantitative, its assessment should possess clinical credibility, evaluated and accepted by medical practitioners. It must be comprehensive with clinical relevant measures, objectively and subjectively. In other words, its evaluation processes and analysis should be based on individual evaluative/responsive nature (measuring within-person changes over time) and discriminative/sensitive in nature (measuring across-person or across-program differences) (Phillips, 2005; PHAC, n.d.). Therefore, the use of economic evaluations in medicinal product development process facilitates the exploration of reliable and valid hypothesis-driven assessments either through clinical significance or statistical analyses or both.


Phillips, C. J. (2005). Health economics: An introduction for health professionals. Malden, MA:    Blackwell Publishing.

Public Health Agency of Canada. (PHAC). (n.d). Evaluation of Programs for the Treatment of             Schizophrenia: A Health Economic Perspective Retrieved from http://www.phac-aspc.

Whitemore, E. (2004). Development of FDA-regulated medical products. Quality Press.     Milwaukee, WI.