Leading Article


, Volume 19, Issue 6, pp 609-621

First online:

Developing Guidance for Budget Impact Analysis

  • Paul TruemanAffiliated withJohnson & Johnson Medical UK Ltd Email author 
  • , Michael DrummondAffiliated withCentre for Health Economics, University of YorkInnovus Research Inc.
  • , John HuttonAffiliated withMEDTAP International Inc.

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The role of economic evaluation in the efficient allocation of healthcare resources has been widely debated. Whilst economic evidence is undoubtedly useful to purchasers, it does not address the issue of affordability which is an increasing concern. Healthcare purchasers are concerned not just with maximising efficiency but also with the more simplistic goal of remaining within their annual budgets. These two objectives are not necessarily consistent.

This paper examines the issue of affordability, the relationship between affordability and efficiency and builds the case for why there is a growing need for budget impact models to complement economic evaluation. Guidance currently available for such models is also examined and it is concluded that this guidance is currently insufficient. Some of these insufficiencies are addressed and some thoughts on what constitutes best practice in budget impact modelling are suggested. These suggestions include consideration of transparency, clarity of perspective, reliability of data sources, the relationship between intermediate and final end-points and rates of adoption of new therapies. They also include the impact of intervention by population subgroups or indications, reporting of results, probability of re-deploying resources, the time horizon, exploring uncertainty and sensitivity analysis, and decision-maker access to the model. Due to the nature of budget impact models, the paper does not deliver stringent methodological guidance on modelling. The intention was to provide some suggestions of best practice in addition to some foundations upon which future research can build.