%0 Journal Article
%T How Can a Medicine Be Cost-Effective Yet Unaffordable? Reconciling Value, Budget Impact, Cash-Flow Timing, and Health-System Displacement
%A Lucas Meyer
%A Aisha Khan
%A Peter Nagy
%J Annals of Pharmacy Practice and Pharmacotherapy
%@ 3062-4436
%D 2024
%V 4
%N 2
%R 10.51847/PXF2d5a0CU
%P 102-113
%X A medicine can represent good value for money and still create an adoption problem for a health system. Cost-effectiveness evaluates incremental costs and consequences relative to an alternative, whereas affordability depends on the scale and timing of expenditure, the population eligible for treatment, the resources required to deliver care, and the services displaced when additional resources cannot be obtained immediately. These quantities can move in different directions. A therapy with a favorable lifetime cost-effectiveness profile may require concentrated expenditure before benefits or offsets occur, may create a large aggregate budget impact because many patients are eligible, or may require scarce diagnostic, treatment, monitoring, and administrative capacity. Conversely, a medicine with a high acquisition cost can sometimes be accommodated when eligible volume is small, payment is distributed over time, or additional resources can be mobilized without substantial displacement. This Practical Application separates value, budget impact, cash-flow timing, implementation capacity, and health-system displacement as related but non-equivalent reimbursement quantities. It examines when marginal cost-effectiveness reasoning becomes unreliable for large expenditure changes, how payment arrangements alter financial timing without necessarily reducing total expenditure, and why nonfinancial constraints can remain binding after funding is secured. The practical implication is that reimbursement should identify the source of the affordability problem before selecting a policy response. Cost-effectiveness remains necessary for judging value, but it cannot by itself determine whether adoption is financially and operationally feasible within a particular health system and time horizon.
%U https://galaxypub.co/article/how-can-a-medicine-be-cost-effective-yet-unaffordable-reconciling-value-budget-impact-cash-flow-t-1riqxzatojatera