Cost effectiveness in low-and middle-income countries a review of the debates surrounding decision rules

Samuel D. Shillcutt, Damian G. Walker, Catherine A. Goodman, Anne J. Mills

Research output: Contribution to journalReview articlepeer-review

151 Scopus citations


Cost-effectiveness analysis (CEA) is increasingly important in public health decision making, including in low-and middle-income countries. The decision makers' valuation of a unit of health gain, or ceiling ratio (λ), is important in CEA as the relative value against which acceptability is defined, although values are usually chosen arbitrarily in practice. Reference case estimates for λ are useful to promote consistency, facilitate new developments in decision analysis, compare estimates against benefit-cost ratios from other economic sectors, and explicitly inform decisions about equity in global health budgets. The aim of this article is to discuss values for λ used in practice, including derivation based on affordability expectations (such as $US150 per disabilityadjusted life-year [DALY]), some multiple of gross national income or gross domestic product, and preference-elicitation methods, and explore the implications associated with each approach. The background to the debate is introduced, the theoretical bases of current values are reviewed, and examples are given of their application in practice. Advantages and disadvantages of each method for defining l are outlined, followed by an exploration of methodological and policy implications.

Original languageEnglish (US)
Pages (from-to)903-917
Number of pages15
Issue number11
StatePublished - 2009
Externally publishedYes

ASJC Scopus subject areas

  • Pharmacology
  • Health Policy
  • Public Health, Environmental and Occupational Health


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