We estimate the life-cycle value of risperidone – Second-Generation Antipsychotics (SGA) – to balance the view that cost per Quality-Adjusted Life Year (QALY) estimates at launch are enough to guide access decisions. Study results will also drive discussion on access and price to recognize the dynamic nature of pharmaceutical pricing over the long-run.

We estimated number of patients treated for schizophrenia with risperidone in Sweden and the United Kingdom (UK) between 1994-2017 based on usage data form national statistics and volume sales data from IQVIA. We collected data from literature on the effectiveness (QALYs) and costs (EUR 2017) of risperidone (SGA) and haloperidol – First-Generation antipsychotic (FGA). We estimate the life-cycle value added by risperidone versus haloperidol, and the life-cycle distribution of the social surplus between the payer (consumer surplus) and the innovator (producer surplus).

We estimated the consumer surplus, the producer surplus, the Net Monetary Benefit (NMB) and Incremental Cost-Effectiveness Ratio (ICER) at each year and in aggregate terms (1993-2017). For the UK the producer surplus was ~28 percent out of the total surplus before patent expiration and five percent after patent expiration. In Sweden, producer surplus was around 6 percent out of the total surplus before patent expiration and one percent thereafter. In both countries, during the life-cycle of risperidone, the NMB per patient increased and the ICER decreased as a response to: (i) the launch of Risperidone Long-Acting Injectable (RLAI); and (ii) the generic entry.

The value added by risperidone increased during the life-cycle due to the launch of RLAI and the generic competition. This suggests that, considering the entire life-cycle, the value added by SGAs to the system is higher than the expected 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.