Background: Saudi Arabia's Vision 2030 aims to reform health care across the Kingdom, with health technology assessment being adopted as one tool promising to improve the efficiency with which resources are used. An understanding of the opportunity costs of reimbursement decisions is key to fulfilling this promise and can be used to inform a cost-effectiveness threshold. This paper is the first to provide a range of estimates of this using existing evidence extrapolated to the context of Saudi Arabia.
Methods and materials: We use four approaches to estimate the marginal cost per unit of health produced by the healthcare system; drawing from existing evidence provided by a cross-country analysis, two alternative estimates from the UK context, and based on extrapolating a UK estimate using evidence on the income elasticity of the value of health. Consequences of estimation error are explored.
Results: Based on the four approaches, we find a range of SAR 42,046 per QALY gained (48% of GDP per capita) to SAR 215,120 per QALY gained (246% of GDP per capita). Calculated potential central estimates from the average of estimated health gains based on each source gives a range of SAR 50,000-75,000. The results are in line with estimates from the emerging literature from across the world.
Conclusion: A cost-effectiveness threshold reflecting health opportunity costs can aid decision-making. Applying a cost-effectiveness threshold based on the range SAR 50,000 to 75,000 per QALY gained would ensure that resource allocation decisions in healthcare can in be informed in a way that accounts for health opportunity costs.
Limitations: A limitation is that it is not based on a within-country study for Saudi Arabia, which represents a promising line of future work.
Keywords: Cost-effectiveness threshold; H5; H51; I; I1; I10; I18; cost-effectiveness analysis; decision making; health technology assessment.
Healthcare in Saudi Arabia is undergoing wide-ranging reform through Saudi Arabia’s Vision 2030. One aim of these reforms is to ensure that money spent on healthcare generates the most improvement in population health possible. To do this requires understanding the trade-offs that exist: funding one pharmaceutical drug means that same money is not available to fund another pharmaceutical drug. This is relevant whether the new drug would be funded from within the existing budget for healthcare or from an expansion of it. If the drugs apply to the same patient population and have the same price, the question is simply, “which one generates more health?” In reality, we need to compare pharmaceutical drugs for different diseases, patient populations, and at a range of potential prices to understand whether the drug in question would generate more health per riyal spent than what is currently funded by the healthcare system. This paper provides the first estimates of the amount of health, measured in terms of quality adjusted life years (QALYs), generated by the Saudi Arabian healthcare system. We find that the healthcare system generates health at a rate of one QALY produced for every 50,000–75,000 riyals spent (58–86% of GDP per capita). Using the range we estimate to inform cost-effectiveness threshold can aid decision-making.