Understanding and improving the one and three times GDP per capita cost-effectiveness thresholds

Abstract

Researchers and policymakers have long been interested in developing simple decision rules to aid in determining whether an intervention is, or is not, cost-effective. In global health, interventions that impose costs per disability-adjusted life year averted less than three and one times gross domestic product per capita are often considered cost-effective and very cost-effective, respectively. This article explores the conceptual foundation and derivation of these thresholds. Its goal is to promote understanding of how these thresholds were derived and their implications, as well as to suggest options for improvement. These thresholds are intended to reflect the monetary value of the benefits to affected individuals, based on their preferences for spending on health vs spending on other goods and services. However, the current values were not rigorously derived, which means that their application may lead to inappropriate conclusions regarding which interventions should be adopted as well as misallocation of resources across health and other investments. Improving the basis for these cost-effectiveness thresholds is of particular importance in low- and middle-income countries, given the limited resources available and the significant needs of their populations.

Keywords: Cost-effectiveness analysis; disability-adjusted life years; international health policy; resource allocation; willingness to pay.