Nermina Ferizovic | Health Economics Expert

The previous blog post introduced the reader to several questions which should be considered when the value assessment of advanced therapies is being discussed. One of these questions, arguably the first question which should be asked, is in relation to categories of value and which should apply to advanced therapies. 

There are two broad value categories in economics: objective and subjective. Subjective value has its origins in utilitarianism and is based on the opinions and feelings of individuals meaning that it differs from person to person. As such, it is described as being relative. On the contrary, objective value is defined as fact-based and absolute. It came to prominence during the Industrial Revolution as it enabled manufacturers to assess productivity. Importantly, it is not based on intrinsic features of the goods being valued. 

Imagine a world where value assessment does not currently exist, and an assessment framework needs to be developed to enable reimbursement decisions to be made. A potential first step could be to determine the category of value under which assessment should take place. 

A subjective approach would be based on the views of individuals impacted by health conditions which could be treated with advanced therapies. Arguably, this would mean that the needs of those most impacted by advanced therapies would determine the value of these products. However, this approach may not allow for consistent comparisons across interventions and therapy areas. On the other hand, an approach using objective value could mean that advanced therapies are assessed against a consistent framework based on a pre-defined value element – likely a monetary value. However, this may mean that the true value of an advanced therapy is not captured and assessed appropriately. A third potential option could be a combination of the two which would draw on the strengths of both approaches.

Any potential approach would require careful consideration and alignment with economic concepts.