Assessing the Value of a New Pharmaceutical: A Feasibility Study of Contingent Valuation in Managed Care

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Abstract

Objectives.

The authors assessed the feasibility and construct validity of the contingent valuation method for measuring the monetary value to healthy enrollees in a health maintenance organization of a new drug, filgrastim, as prophylaxis against febrile neutropenia after chemotherapy treatment for cancer.

Methods.

A random sample of 220 enrollees from a closed-panel staff-model health maintenance organization who did not have cancer were interviewed. Chemotherapy, febrile neutropenia and filgrastim were described by video and decision board. Questions were asked in two different scenarios: (1) User-based: Assuming they were at the point of consumption and about to receive chemotherapy, what is the maximum they would be willing to pay to receive filgrastim? and (2) Insurance-based: Given they were at risk of cancer in the future, what is the maximum they would be willing to pay in additional monthly insurance premiums to add filgrastim to the plan? In a second insurance scenario where respondents were told that filgrastim was covered, what is the minimum reduction in premium that persons were willing to accept to relinquish coverage of the drug? A 2 × 2 factorial design was used to contrast two bidding algorithms to test for starting point bias and two 5-yearly prior risks of cancer, 1/200 versus 1/100. Main effects were tested by ANCOVA controlling for age, sex, health, and income.

Results.

Demographics of experimental cells were similar. No evidence was found of significant starting point bias. For user-based questions, as expected, willingness-to-pay increases with febrile neutropenia risk reduction, but at a declining marginal rate. Despite careful presentation of information to respondents, willingness-to-pay for insurance was higher in the lower prior risk group. Consistent with previous contingent valuation studies, the authors of the present study found evidence that willingness-to-accept exceeds willingness-to-pay for coverage of the same benefit.

Conclusions.

An insurance-based contingent valuation study is feasible in a health maintenance organization. Construct validation evidence was encouraging, with the exception of the test for prior risk of cancer; however, this was a between-person contrast and may have been confounded by other factors.

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