Early economic modelling

Early economic models are simplified analytical tools that explore the potential cost effectiveness of treatment alternatives under various circumstances, including future scenarios. They are most commonly used for understanding the likely cost effectiveness associated with different possible clinical trial results and different intervention costs (including pricing for drugs, devices, or digital health technologies), as well as identifying the key parameters that drive ‘value for money’.

For pharmaceutical and biotechnology companies, early models can help to inform decisions on pipeline prioritisation and clinical trial design by estimating the potential value of candidates early in development. For MedTech and digital health technology companies, early models can support proof-of-concept, potentially before clinical data collection, by exploring potential pricing given different effectiveness levels. Early models can inform strategic decisions on target populations, pricing strategies, and prioritisation of future research. While they can be further developed into more robust economic models for formal reimbursement decisions, their initial value often lies in their simplicity, where expert judgement has been used to focus on the central drivers of the economic analysis.