ISSUE: : Conventional cost effectiveness analysis is broadly used in the context of formal Health Technology Assessments (HTAs), but rests on a set of problematic assumptions and conventions. It cannot capture citizens’ preferences for health care resource allocation beyond individual gains in length and quality of life and the associated uncertainty. This is particularly relevant for increasingly important areas such as the evaluation of orphan medicinal products and precision (or “personalized”) medicine.

OVERVIEW: : Our starting point is the assumption that Health Technology Assessment (HTA) should inform decision makers acting on behalf of citizens covered by a collectively financed health scheme. Accordingly, their decisions should respect the social norms, preferences, and value judgments of the population. However, the currently prevailing conventional health economic evaluation approaches, in particular cost effectiveness analyses (CEAs) relying on the ICER (incremental cost effectiveness ratio) metric, are based on a reductionist efficiency criterion and do not capture the full social value of health technologies. This may result in recommendations contradicting social norms and preferences, which have been demonstrated by the “empirical ethics” project. As an example, the limitations imposed by the linearity assumptions underlying the ICER metric are illustrated by the inadequacy of the method to reflect the size of programs and the prevalence (or “rarity”) of a health problem, with potentially far-reaching implications not only for the evaluation of rare and ultra-rare disorders. Thus, measuring social preferences may require a payment vehicle different from the (purely selfish) consumers’ perspective applied in most stated preference studies. Empirical studies using a citizens’ perspective (resting on the budget impact of programs) will be presented. Social cost value analysis will be discussed as an emerging concept that may capture citizens’ social preferences better than conventional CEAs. Methodological challenges, policy implications and further research needs will be debated.