To estimate the life-cycle value of risperidone – representative of Second-Generation Antipsychotics– relative to First Generation Antipsychotics to balance the view that cost per Quality-Adjusted Life Year (QALY) at launch are enough to guide access decisions. Study aims to drive the discussion on access and price, through recognition of the dynamic nature of value added by pharmaceutical innovation over the long-run.

We estimated the number of patients with schizophrenia treated with risperidone in Sweden and the UK (1994-2017). We collected cost-effectiveness data from the literature of risperidone and haloperidol – representative of First-Generation Antipsychotics. We modelled the life-cycle uptake of risperidone to estimate the life-cycle incremental cost, incremental QALYs and Net monetary Benefit (NMB). We also assessed the life-cycle distribution of the consumer (the payer) and the producer (innovator) surpluses.

For the UK, the producer surplus represents around 28% of the total surplus before patent expiration and around 5% after patent expiration. Life-cycle NMB for the health system is estimated at €1,116m. During the life-cycle, the NMB significantly increased in response to two events: (i) the launch of Risperidone Long-Acting Injectable (RLAI); and (ii) generic entry. The ICER was negative (dominant) for the whole period. For Sweden, the producer surplus represents around 6% of the total surplus before patent expiration and around 1% after generic competition. Life-cycle NMB is estimated at €803m, and both NMB and ICER follow the same pattern as in the UK.

Analysis shows that health systems appropriated most of the life-cycle value (surplus) generated. This suggests that, considering the entire life-cycle, the value added by SGAs to the system is higher than the value estimated using cost-effectiveness analysis at launch. Pricing and reimbursement decisions should take into account the dynamic nature of pharmaceutical markets and the value added by innovative medicines over the long-run.