6. Recommendations

Key recommendations:

• High-cost special needs should only be funded when they do not impose a significant opportunity cost on the rest of the relevant population.
• Where several HCSN policies compete for funding, priority should be given to those that generate the most ‘natural units of outcome.’

The case studies and cost-effectiveness analyses above suggest that not all resource allocation systems will yield the same cost-effectiveness ratio. In both the case of IDEA and in the case of PHARMAC, we have seen how funding some HCSNs leads to imposing real costs on a large section of the population. In a world of limited budgets, needs-claims compete with other needs-claims, and satisfying the needs of some persons with HCSNs can lead to under-providing for the needs of other persons.

It is conceivable that some HCSN funding will not take place over a scale as broad as funding for Avastin, for example. The claim here is that funding them would not impose significant opportunity costs on others. One example is the potential funding of Dasatinib (Sprycel) and Imatinib (Glivec or Gleevec), two drugs used to fight leukaemia. Imatinib is the drug of choice in most countries as it has a much higher cost-effectiveness ratio than Dasatinib. However, some patients are Imatinib-resistant and can benefit from Dasatinib. In New Zealand, they form a very small proportion of leukaemia-patients, and PHARMAC has ruled that funding Dasatinib would occur on such a small scale that it would not impose significant costs on other patients.[1]

This solution offers a ‘Pareto improvement,’ as no-one is worse-off in any relevant sense, and at least some people find themselves better off.[2] Of course, it is possible that a great number of such Pareto improvements, although individually insignificant in terms of opportunity costs for the wider population, would collectively amount to a large opportunity cost. The solution for policy makers would be to establish a starting point where no HCSNs are funded, and then to fund as much HCSNs as possible without crossing the threshold of significant opportunity costs to others. Decisions between which HCSNs to fund should also be done via a cost-effectiveness analysis: funding should go to those policies that satisfy those HCSNs in the most effective way and for the lowest cost.