Informing a cost-effectiveness threshold for Saudi Arabia

Abstract

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.