The Allocation of the Economic Value of Second-generation Antipsychotics Over the Product Life-cycle: the Case of Risperidone in Sweden and the UK.

This paper estimates the life-cycle value of risperidone as representative of Second-Generation Antipsychotics (SGA) relative to haloperidol (first generation antipsychotics). We estimated the number of patients treated with risperidone in Sweden and the UK, 1994-2017, using data of usage and volume sales. We collected data from the literature on the effectiveness (QALYs per patient per year), direct costs (health services) and indirect costs (productivity) of risperidone and haloperidol. We proxied the incremental value added by the new class (SGA) using a comparator from the inferior class. Next, we modelled the life-cycle uptake of risperidone to estimate the life-cycle incremental cost (i.e., direct, indirect and medicine costs), incremental QALYs and Net monetary Benefit (NMB) of risperidone. We also assessed the life-cycle distribution of the social surplus between the payer (consumer surplus) and the innovator (producer surplus). For the UK, consumer surplus represents around 72% of the total surplus before patent expiration and around 95% after patent expiration. For Sweden the consumer surplus represents around 94% of the total surplus before patent expiration and around 99% after generic competition. These results suggest that the value added by SGAs to the system is higher than the expected value estimated using cost-effectiveness analysis at launch. Pricing and reimbursement decisions could recognise the full life cycle of value of innovative medicines. This presents a challenge of estimation, but also of assessing the appropriate division of shares of social value.