Dread and Risk Elimination Premium for the Value of a Statistical Life

Assessing the incorporation of latent variables in the estimation of the value of a statistical life

For many years, the economic literature has recognized the role of attitudes, beliefs, and perceptions in estimating the value of a statistical life (VSL). However, few applications have attempted to include them. This article incorporates the perceived controllability and concern about traffic and cardiorespiratory risks to estimate VSL using a hybrid choice model (HCM). The HCM allows us to include unobserved heterogeneity and improve behavioral realism explicitly. Using data from a choice experiment conducted in Santiago, Chile, we estimate a VSL of US$3.78 million for traffic risks and US$2.06 million for cardiorespiratory risks. We found that higher controllability decreases the likelihood that the respondents would be willing to pay for risk reductions in both risks. On the other hand, concern about these risks decreases the willingness to pay for traffic risk reductions but increases it for cardiorespiratory risk reductions.

Valuation of Treatments for Rare Diseases: A Systematic Literature Review of Societal Preference Studies

INTRODUCTION

We sought to synthesize published empirical studies that elicited and characterized societal valuations of orphan drugs and the attributes that may drive different valuations for orphan drugs versus other treatments.

METHODS

We conducted a systematic literature review (SLR) in MEDLINE and EMBASE databases up to November 2, 2020. Search terms covered societal preferences and attributes of orphan drugs (e.g., disease prevalence, severity, burden, unmet needs, and benefits).

RESULTS

We identified 38 eligible publications: 33 societal preference studies and 5 reviews discussing societal valuations and attributes of orphan drugs. Most publications suggested that a majority of respondents favored allocating funds to more prevalent diseases. However, trade-off studies and discrete-choice experiments found that survey participants chose to allocate resources to orphan drugs even when the cost per unit of health benefit was greater than for therapies for more prevalent diseases. Overall, 19 of 27 studies assessing severity in treatment valuation revealed that respondents prioritized patients with severe diseases over those with milder ones for equal health benefits. Members of the general public tended to prefer treatments for diseases with no alternative or when existing alternatives had limited efficacy over diseases with clear therapeutic alternatives. There was evidence that individuals preferred sharing resources, so no patient was left without treatment.

CONCLUSIONS

Our SLR indicates the general public typically attaches greater value to orphan drugs than to other treatments for common diseases. This is not because of rarity per se, but primarily because of disease severity and lack of therapeutic alternatives typically associated with rare diseases.