A number of countries including Australia appoint a group of decision-makers who are largely responsible for making recommendations on which pharmaceuticals will be subsidised by public funds. Whilst cost-effectiveness is of key relevance to their recommendations, there is limited information on the relative importance of the components of cost-effectiveness, or on other criteria that may be of value. In addition to health gain, the public value criteria such as those concerned with fairness and equity considerations. The public are the payers and beneficiaries of any public health system, and procedural justice supports the consideration of their views. In the Australian context, this leads to the question of whether public funding decisions for subsidising pharmaceuticals in Australia are consistent with the preferences of society. It is this broad question that is addressed by this thesis. A review of the literature revealed there are many criteria that may be important to pharmaceutical funding decisions, and these have been explored empirically to varying degrees for public and decision-maker preferences. Most of the evidence relating to pharmaceutical funding originates from outside of Australia. Both the public and decision-makers agree that clinical effectiveness is important to the decision; although, evidence on the relative importance of the individual components of effectiveness (survival, quality of life (QoL) and chance of success) to social preferences is limited. Further, severity of illness also appears relevant to both groups, although most evidence for this defines severity of illness in terms of QoL rather than expected survival. In some cases, evidence exists to support the importance of a criterion in either the public or decision-makers, whilst that criterion has not been (well) explored in the other group. One notable example is the lack of evidence showing costeffectiveness to be important to the public, despite its relevance to pharmaceutical decision-making bodies. The research in this thesis focuses on the relative importance of cost, the components of effectiveness, and uncertainty (decision-makers only) to the preferences of Australian public and decision-makers, for different severity of illness scenarios. A Discrete Choice Experiment (DCE) was developed and used to elicit and compare Australian public and decision-maker preferences. For the purposes of this study, preferences were elicited from an Australian population sample and from members of the Pharmaceutical Benefits Advisory Committee and its Economics Subcommittee. Data analysis utilised a mixed logit framework. The public and decision-maker marginal rate of substitution and willingness-to-pay for attributes was estimated and compared across scenarios and between respondent groups. The findings of this research suggest that the preferences of the Australian public are largely consistent with the stated preferences of Australian decision-makers, and are broadly consistent with pharmaceutical funding decisions in Australia. The public and decision-makers were willing to trade between survival and QoL; and, both consider cost-effectiveness to be important to the decision. Further, the initial severity of illness was important, with both the public and decision-makers willing to pay more for the treatment of severe illness when described in terms of both a short life expectancy and poor QoL with current treatment. However, this trend was stronger in the public. For decision-makers, the importance of uncertainty also differed according to the severity of the illness. Several differences were observed between public and decision-maker preferences, suggesting that the public may place a greater value on QoL gains and on the treatment of moderate anxiety/depression than decision-makers.
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