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Cost‐effectiveness analysis

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The term cost‐effectiveness analysis (CEA) is often used loosely to refer to all types of pharmacoeconomic evaluation but does refer to a specific technique that compares alternative treatments in terms of a single natural unit which is common to both alternatives. It is of use where the alternative treatments achieve the outcome to different degrees, i.e. one treatment is more effective than the other. Treatments are then compared in terms of the cost per additional unit of benefit, for example, cost per life year saved, cost per ulcer healed or cost per extra mmHg blood pressure reduction. CEA is frequently used to compare interventions within a single disease area. For many decision makers, it has a significant limitation as it does not allow comparisons to be made between different areas of clinical practice with different outcomes (e.g. ulcer‐healing drug versus blood‐pressure lowering drug).

Clinical Pharmacology and Therapeutics

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