Economic analysis

The Prescription for Pharmacoeconomic Analysis (PFPA) is a guide for assessing the value for money of pharmaceuticals in New Zealand.

Prescription for Pharmacoeconomic Analysis (PFPA)

Prescription for Pharmaceutical Analysis (PFPA), version 2.2. - web

Prescription for Pharmaceutical Analysis (PFPA), version 2.2. [PDF, 901 KB]

Version 2.2 of the PFPA, published in August 2015, supports assessment of medical devices, vaccines and medicines under the Factors for Consideration.

The update to version 2.2 took into account feedback received during consultation on our decision-making framework and medical devices activities.

The PFPA provides a detailed guide to the methods PHARMAC uses for health economic analysis of health funding. The preferred method is cost-utility analysis, which informs the “health benefits” and “costs and savings” dimensions of the Factors for Consideration, and can generate information helpful for considering Factors in the “need” and “suitability” dimensions.

Documenting our methodology aims to ensure that economic analyses by and for PHARMAC measure costs, benefits, time preference and uncertainty in a similar fashion; hence enabling comparison between the cost-effectiveness of different interventions and ensuring that the results of analyses are meaningful for decision making. The intended audience for the PFPA is medicine and medical device suppliers, PHARMAC staff, clinicians, and contracted health economists preparing economic analyses for PHARMAC.

If you want a previous version of the PFPA, contact us at

Assessment of medical devices and vaccines

Version 2.2 of the PFPA reflects our expanding role into vaccines and medical devices.

A summary of changes and specific information relating to medical devices and vaccines is in our PFPA Supplement 2: Assessment of Medical Devices and Vaccines.

Cost-Utility Analysis (CUA) Explained

Cost-Utility Analysis (CUA) Explained provides a simple explanation of general CUA concepts. CUA Explained was also updated in August 2015.

The following general CUA concepts are covered:

  • a quick overview of CUA
  • assessing clinical evidence for inclusion in a CUA
  • assessing benefits and costs
  • managing risk in CUA
  • the economic model
  • the cost per quality-adjusted life year (QALY) result of a CUA
  • using the cost per QALY information
  • and commonly asked questions and answers regarding CUA

For detailed information on the methods for CUA at PHARMAC, please refer to the Prescription for Pharmacoeconomic Analysis.

Cost Resource Manual

The Cost Resource Manual promotes consistency in the costs and prices used in health technology assessments by and for PHARMAC. It provides information on the key costs and prices that PHARMAC regularly uses in cost-utility analyses and budget impact analyses, so that applicants may, if they wish, use the same cost data in their own economic assessments for PHARMAC.

The following key costs are regularly used in PHARMAC assessments and are covered in this manual:

  1. pharmaceutical costs
  2. primary health care costs
  3. investigative and diagnostic test costs
  4. hospital care costs
  5. community care costs.

Technology Assessment Reports

Technology Assessment Reports are detailed analyses of new pharmaceuticals. They are used to determine the cost-effectiveness of pharmaceuticals that we are being asked to fund.

We don't publish most of our Technology Assessment Reports, because of commercial sensitivity.