Reimbursement Decisions for Pharmaceuticals in Sweden: The Impact of Disease Severity and Cost Effectiveness

The Swedish Dental and Pharmaceutical Benefits Agency (TLV) is the government body responsible for deciding whether outpatient drugs are to be included in the pharmaceutical benefits scheme. This paper analyzes the impact of cost effectiveness and severity of disease on reimbursement decisions for new pharmaceuticals. Data has been extracted from all decisions made by the TLV between 2005 and 2011. Cost effectiveness is measured as the cost per quality-adjusted life-year (QALY) gained, whereas disease severity is a binary variable (severe-not severe). In total, the dataset consists of 102 decisions, with 86 approved and 16 declined reimbursements. The lowest cost per QALY of declined reimbursements is Swedish kronor (SEK) 700,000 (a,not sign79,100), while the highest cost per QALY of approved reimbursements is SEK1,220,000 (a,not sign135,600). At a cost per QALY of SEK702,000 Swedish kronor (non-severe diseases) and SEK988,000 (severe diseases), the likelihood of approval is estimated to be 50/50 (a,not sign79,400 and a,not sign111,700). The TLV places substantial weight on both the cost effectiveness and the severity of disease in reimbursement decisions, and the implied willingness to pay for a QALY is higher than the often cited 'rule of thumb' in Swedish policy debates.