Cost-effectiveness analysis of donepezil for mild to moderate Alzheimer’s disease in Taiwan Jong-Ling Fuh * and Shuu-Jiun Wang Neurological Institute, Taipei Veterans General Hospital and National Yang-Ming University School of Medicine, Taipei, Taiwan SUMMARY Background Donepezil is a drug used for treatment in patients with Alzheimer’s disease (AD). Information regarding the cost-effectiveness of this medication was previously rare in Asia. We used techniques of decision analysis and economic evaluation in conjunction with available local epidemiological and clinical data on costs of mild to moderate AD to assess the cost-effectiveness of donepezil in Taiwan. Methods A four-state Markov model was built to simulate the disease progression of AD patients. Local transition probabilities and costs of different stages were from the studies published earlier. Results Over a 5-year span, donepezil treatment for mild or moderate AD patients is predicted to result in the gain of 0.505 QALYs when comparing to usual care, while at the same time reducing the cost by US$7,691. The incremental cost was US$3,647 from the payer perspective; thus, the incremental cost-effectiveness ratio was estimated to be US$7,226 when considering only the medical expenditures. Conclusions Under some assumptions, donepezil treatment might be a cost saving strategy for mild to moderate AD patients in Taiwan from a societal perspective. It is inconclusive from the payer’s part since we still lack a consensus for judging the cost-effectiveness of a new health care technology. Copyright # 2007 John Wiley & Sons, Ltd. key words —Alzheimer’s disease; donepezil; cost-effectiveness; dementia; Taiwan INTRODUCTION With a 10 year average annual growth rate of 4.5% (The Ministry of the Interior of the Republic of China, 2002), the elderly population in Taiwan has a prevalence of dementia of 2 to 4.4% (Liu et al., 1994, 1996). We previously showed the economic costs per demented patient per year varied from $ 6,290–21,669 US dollars (Chou et al., 2001). The number of patients with Alzheimer disease (AD) is forecasted to grow dramatically in Taiwan. Taiwan has had National Health Insurance (NHI) since 1995 and like other countries, NHI has faced the challenge of rising expenditures. Cholinesterase inhibitor (CEI) is the mainstream AD treatment. Donepezil, was the first drug approved by NHI for treatment of mild to moderate AD patients. According to the latest reimbursement criteria, prior authoriz- ation is required for all new patients; furthermore, patients are evaluated every 6 months after initiating treatment (Lin et al., 2006). Patients who show either a decrease in Mini-mental state examination (MMSE) of 2 or more points or an increase in Clinical Dementia Rating (CDR) of one or more points on the rating scale during follow-up evaluation, reimbursement stops. Several studies on the economics of donepezil treatment using the Markov model were conducted in the UK, Canada, Sweden, and the USA (Stewart et al., 1998; Jonsson et al., 1999; Neumann et al., 1999; O’Brien et al., 1999). Whether these results can be applied to less developed countries is uncertain; furthermore such studies are scanty in Asia. For these INTERNATIONAL JOURNAL OF GERIATRIC PSYCHIATRY Int. J. Geriatr. Psychiatry 2008; 23: 73–78. Published online 22 May 2007 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/gps.1842 *Correspondence to: Dr J.-L. Fuh, Neurological Institute, Taipei Veterans General Hospital, 11217, Taipei, Taiwan. E-mail: jlfuh@vghtpe.gov.tw Copyright # 2007 John Wiley & Sons, Ltd. Received 8 December 2006 Accepted 20 April 2007