publicity nowadays — and it must be confessed that our drug bill is a formidable one — but it must be remembered that the economic benefit to England and Wales resulting from the use of the anti-tubercular drugs alone is approximately £55 million a year, or more than half the cost of the expenditure of the National Health Service on all drugs to treat all disease.”
It's easy to think that not much has changed in 60 years. Many people still feel that pharmaceutical expenditure is too great – although it is capped in the UK and represents a small percentage of total healthcare expenditure. Others feel strongly that the benefits of medicines – both financial and broader – are still not fully recognised. And as a result, medicines are underutilised.
But that would do a great disservice to the academic and practical subject of health economics. My predecessor at OHE, Professor Adrian Towse, has nicely characterised the history of health economics as emerging as a discipline in the 1960’s with a focus on burden of disease, followed in the 1970’s by the development of the QALY, and then by the 1980’s this has turned into arguments in favour of rationing using a cost-per-QALY approach. Adoption of Health Technology Assessment was the over-riding theme of the 1990’s and by the early “noughties” concerns were raised over the declining R&D productivity of the pharmaceutical industry and the lack of breakthrough innovations. And in the past decade that has been reversed with an explosion in innovation and questions about the affordability and financial sustainability of health systems. So much has been achieved and so much has changed.
We are proud of the major role that OHE has played in the development of the discipline and our many contributions to theory, practice and policy and we look forward to celebrating our 60th year by reviewing some of OHE’s most important work.
Remember that OHE was founded before Kenneth Arrow’s seminal paper was published in 1963. Before Marty Feldstein’s doctoral work at Oxford was complete in 1967. Before the first economists started at the Economic Advisers’ Office in the Department of Health and Social Security in 1970. Or before the University of York was even founded, let alone starting to have the enormous impact that it’s had on the evolution of health economics.
We should therefore all agree with Professor Dunlop closing remarks that “The pharmaceutical industry is to be congratulated on taking the initiative in sponsoring the Office of Health Economics.”
