Money well spent? How real-world use of treatments differs from clinical trials

Decorative

CHE RESEARCH BITES

By Peter Ghijben, Silva Zavarsek, Gang Chen and Emily Lancsar

01 April, 2025

Value for money is crucial for public health systems because it ensures that limited resources are used in the best way to improve people’s health. To determine whether new treatments offer good value for money, policymakers need to understand their costs and benefits.

The main challenge is that estimates of costs and benefits (before widespread approval and use) are often based on clinical trials under tightly controlled conditions. In real life, however, doctors and patients have more freedom to decide how treatments are used. This means the costs and benefits seen in clinical trials may not always match what happens in everyday practice.

This study examines how doctors and patients responded when new prostate cancer treatments were funded by the Australian government through the Pharmaceutical Benefits Scheme. We found that, compared to the clinical trials doctors treated patients who were more ill, patients switched to the new treatments earlier than expected, and remained on the new treatments longer periods. These real-world differences led to higher costs and lower benefits, reducing the overall value for money in practice.

Our findings suggest that policy makers should consider how doctors and patients are likely to use treatments in everyday settings when deciding whether these treatments are likely to offer good value for money, rather than relying solely on clinical trial results.

Ghijben P, Petrie D, Zavarsek S, Chen G, Lancsar E. Behavioral Responses to Healthcare Funding Decisions and Their Impact on Value for Money: Evidence From Australia. Health Economics. 2025. https://doi.org/10.1002/hec.4958

Find out more about the Economic modelling of health policies and technologies research theme.

CHE Research Bites are short, easy-to-understand summaries of our recent academic papers highlighting new evidence and insights on topical issues in the health and healthcare sectors.

Interested in hearing the latest from the Centre for Health Economics? Sign up to our newsletter. Follow us on X and LinkedIn.