Should the Lambda (λ) Remain Silent?

When making decisions regarding the funding of new health technologies (e.g. pharmaceuticals), a key consideration should be the opportunity cost associated with a positive funding decision in terms of other patients’ health. Lambda (λ) is a term that has been used to refer to a maximum acceptable value (cost-effectiveness threshold) for the incremental cost-effectiveness ratio (ICER) of a new technology, which should reflect the opportunity cost of funding decisions.

In 2006, Gafni and Birch [1] discussed the ‘silence of the λ’ with respect to the justification of its numerical value within the decision-making process. They noted that the use of threshold values, which do not represent the true opportunity cost of new and generally more expensive technologies, can lead to increased health expenditures with little evidence of increases in population health.