Budget Impact Model
Pubrica develops budget impact models for pharmaceutical and medical device companies preparing payer and formulary submissions. A budget impact analysis shows whether a payer can afford a new treatment, which is often the deciding question in formulary decisions. Our health economists build the model from the payer’s perspective, over a short horizon, for the payer’s own population and with realistic uptake. You receive the model, an interactive tool in which the payer can enter their own figures, and a written analysis.
- The payer’s perspective rather than society’s: the budget holder’s costs over the budget holder’s horizon, typically one to five years
- Undiscounted, in line with ISPOR good practice, because a budget is spent in the year in which it is allocated
- Realistic uptake, because optimistic diffusion curves are the most common reason a payer discounts the whole analysis
- Interactive payer tool: the payer can change population size, mix and price and see the result for their own figures
- Built alongside the cost-effectiveness model, using shared inputs so that the two analyses are consistent within the same submission
Payer perspective and horizonIncluded
Population and uptake modelledIncluded
Interactive payer toolIncluded
Consistency with the CE modelIncluded
Discounting a budgetNot applied, in line with good practice
Population → uptake → cost → horizon → payer tool
- Payer perspective, payer horizon
- Undiscounted, per good practice
- Uptake assumptions justified with evidence
- Interactive and localisable
- Consistent with the economic model
Deliverables
Four Components of Every Budget Impact Analysis
Budget impact answers a different question from cost-effectiveness, and using the same assumptions for both causes inconsistencies within a submission.
From the analysisA discounted, lifetime, societal budget impact analysis indicates to the payer that the cost-effectiveness model was adapted rather than built to answer the payer’s question.
From the population buildPayers check the population first. A figure that does not reconcile with their own claims data undermines the rest of the analysis.
From the uptake modelThe most common weakness in a budget impact analysis is an implausible uptake curve, which leads the payer to discount the results that depend on it.
From the handoverWhen a payer receives only a static result, they may rebuild the analysis with their own assumptions, and you will not see the version on which they base their decision.
The samples shown are illustrative and anonymised. Hover over a sample to replay it.
Compliance and Standards
Budget Impact Analysis Standards and Guidelines
Budget impact analysis has its own good practice guidance, separate from that for cost-effectiveness.
ISPOR budget impact good practice (task force report)
The reference for budget impact analysis: payer perspective, short horizon, undiscounted costs, current versus new treatment mix, and an interactive model that decision makers can apply to their own population.
ISPOR–SMDM good practices (modelling)
The seven-report series on model conceptualisation, state-transition and discrete event structures, parameter estimation, and the validation and transparency standards that HTA committees use to assess models built by others.
CHEERS 2022 (reporting economic evaluations)
The consolidated health economic evaluation reporting standard. Its twenty-eight items cover model structure, inputs, assumptions, uncertainty and conflicts, and reviewers and HTA bodies increasingly ask to see the completed checklist.
Quality management (cert. H3CR9TCU20251212INDQM10N)
Our certified system for running, recording and releasing project work.
Responsible Use of AI
Our Approach to AI Use in Budget Impact Analysis
Health technology assessment submissions are examined in detail by assessors. Every structural assumption, input and source must be attributable, which is why NICE has published a position on AI in submissions and why traceability is the main requirement.
Why We Do Not Publish an AI Accuracy Figure
Accuracy figures for AI tools are usually reported by the companies that sell them.
Pubrica therefore does not quote a self-generated accuracy figure, because it would carry the same conflict of interest. Instead, we tell you which tool was used on your project, at which stage, and what a specialist changed afterwards.
Methodology
Budget Impact Methodology
We build the population first, because every subsequent calculation depends on it.
Population
We build the eligible population step by step from market epidemiology, with each rate sourced and the derivation shown.
Treatment mix and uptake
We establish the current treatment mix, project the new mix and base the uptake curve on market dynamics.
Costs
We apply drug, administration, monitoring and offset costs from the relevant market’s tariffs over the budget horizon, without discounting.
Interactive tool and report
We deliver the interactive model with a written analysis and cross-check the inputs against the cost-effectiveness model so that the two agree.
Our Experts
Your Budget Impact Modelling Team
A named team of subject specialists stays with your project from scoping to delivery. Your project coordinator introduces each team member by name before work begins.
Determines what the work can claim. Each expert is matched to your topic and tells you clearly when the evidence does not support the intended conclusion.
Responsible for all quantitative decisions. Advises before the analysis begins whether the data can answer the question, and delivers the code so that the analysis can be re-run independently.
Identifies and retrieves the sources the work is built on. Writes the search strategy line by line for each platform and delivers it dated and reproducible.
Reviews the work independently of the first pass and reconciles the two, because most errors in this work are transcription errors. Disagreements are logged and adjudicated by a third reviewer.
Packages
Budget Impact Modelling Packages
Pricing depends on the market, the number of comparators in the treatment mix and how much epidemiology must be built from the beginning.
Budget impact model
For a single market
Quoted per projectBased on market and indication
Delivery By scope
- ✓Eligible population built and sourced
- ✓Current and projected treatment mix
- ✓Uptake curve with scenarios
- ✓Costs over the budget horizon
- ✓Interactive payer tool
- ✓Written analysis
Where possible, we build the budget impact model alongside the cost-effectiveness model so that shared inputs remain consistent.
Deliverables Request a quoteMarket adaptation
For adapting an existing model to new markets
Quoted per projectBased on markets and data availability
Delivery By market
- ✓Local epidemiology substituted
- ✓Local tariffs and unit costs applied
- ✓Comparator mix changed to the market
- ✓Uptake reassessed for local dynamics
- ✓Tool localised and re-checked
Data availability varies between markets, and we will tell you which markets have sufficient data before quoting.
Deliverables Request a quotePayer-facing version
For account and formulary discussions
Quoted per projectBased on the account and its data
Delivery By scope
- ✓Built to the payer’s population
- ✓The payer’s formulary mix reflected
- ✓The payer’s contracted prices used where available
- ✓Simplified interface for live use
- ✓Left with the account where appropriate
A payer who keeps the model can rerun it when the decision is reviewed.
Deliverables Request a quoteSend the indication and the market and we will build the eligible population calculation free of charge, so that you can see whether the epidemiology supports your case.
FAQs
Frequently Asked Questions About Budget Impact Models
If your question is not listed here, ask an expert. No quote is required.
The two answer different questions with different methods. Cost-effectiveness analysis asks whether the health gained is worth the cost, usually over a lifetime, discounted and from a health system perspective.
Budget impact analysis asks what the budget holder will spend over the next one to five years, undiscounted, for their own population. Using cost-effectiveness methods to answer this question is a common and visible error.
No. ISPOR good practice states that budget impact should be undiscounted, because a budget is spent in the year in which it is allocated.
Where an agency also requests a discounted version, we provide both and explain the difference.
The horizon should match the payer’s budgeting period, which is usually between one and five years. Three years is common, and five is the practical maximum for most payers.
A ten-year horizon effectively turns the analysis into a cost-effectiveness model, and payers will interpret it that way.
Payers who are seriously considering a product do use them. An interactive tool allows the payer to test the result rather than simply accept it.
It also means that the version the payer acts on is the one you built, rather than a reconstruction from your figures.
Related Services
Related Market Access Services
Budget impact addresses affordability, and cost-effectiveness addresses value.
1COST-EFFECTIVENESSbuilt together
Cost-effectiveness modelWhether the treatment represents value for money. Health economicsThe discipline behind both analyses.2SUBMISSIONSdownstream
HTA submission dossierAgencies request both analyses. Global value dossierIncluding the AMCP Format version.3SUPPORTING EVIDENCEbuilt first
Payer evidence reviewComparators and effect sizes. Medical data collectionReal-world use and resource data.Request a Free Eligible Population Estimate
Payers check the eligible population first, and it is often built on a global figure that does not reconcile with local claims data.