#PharmEconFriday: The QALY

“QALY” is one of the first terms students will learn in an introductory course on pharmacoeconomics.  It is an acronym for “quality-adjusted life year” and is routinely used by economists to measure the value individuals place on an additional year of life into a single index.1  Just describing the definition to some people will send off ethical red flags, but before you close your browser and swear to never visit my website again let us walk through the ways in which we measure QALY’s.  If you still hate the idea of adjusting the value of a year based on quality of life using these different methods, then this area of research may not be for you.

Below is a basic summary of Sarah Whitehead and Shehzad Ali’s 2010 article, “Health outcomes in economic evaluation: the QALY and utilities” published in the British Medical Bulletin.  For the full article please check out: http://bmb.oxfordjournals.org/content/96/1/5.full

Figure used by Whitehead and Ali, originally adapted from EuroQol

Figure used by Whitehead and Ali, originally adapted from EuroQol

Visual Analogue Scale

This is simply a method by which we ask an individual to rank on scale where they think a particular health state would be.  Sounds pretty basic and it is.  See the figure published by Whitehead et al in 2010 which was adapted from www.euroqol.org.  So if you have diabetes, but are in otherwise feel like you are in great health, you might still rank your health at 95.  As you can imagine, this is a very subjective scale and can vary widely between different people.

Time Trade-Off

This method gives the participant two choices, such as 10 years of life with a disease or 5 years of life with no disease.  If you sample enough individuals, you might find that on average, people would prefer 5 years of life with no disease over 10 years of life with a disease then you would make the weighted adjustment of 0.5 for people with this disease.

Standard Gamble

I like saying the phrase “Standard Gamble” for some reason…it just sounds cool to me.  Anyway, the SG is just like it sounds, you provide the participant with the option of staying in a particular health state or taking a risk that includes full health or death.  So think of it like this: “Given the choice, would you rather be given a syringe that guarantees you will have HIV, or a syringe full of a drug that has a 50% chance of death today or a 50% chance of perfect health?”  (Ok, this sounds a little crazy, but it sort of gets to the point)  So in theory, the worse the health state is to the individual – the more likely they will be willing to take on a higher risk level for death.

Other Measures

Beyond these basic QALY measures, there are a whole slew of developed instruments meant to assess the perceived quality of life or “utility” a person experiences given a certain disease.  Drs. Whitehead and Ali mention several such as the EuroQol-5D, Short Form 6D, and Health Utilities Index.  All meant to generate a score or QALY weight for different disease states.

Other Issues

QALYs are meant to aid decision makers in resource allocation.2  With that said, there are limitations to the way in which we develop QALY adjustments.  Understanding how researchers are using these tools is important so we can understand when recommendations are made based off of a theoretical change in QALY given two or more options.  I’ll save the discussion around the pros and cons of QALYs for another #PharmEconFriday post!

Thanks for tuning in.  If you are a health economist or pharmacoeconomist and would like to contribute to the blog, please message me!



  1. Whitehead SJ, Ali S. Health outcomes in economic evaluation: The QALY and utilities. Br Med Bull. 2010;96(1):5-21. doi:10.1093/bmb/ldq033.
  2. Weinstein MC, Torrance G, Mcguire A. QALYs : The Basics. Value Heal. 2009;12(1):S5-S9. doi:10.1111/j.1524-4733.2009.00515.x.
Joey Mattingly, PharmD, MBA is an assistant professor at the University of Maryland School of Pharmacy located in Baltimore, Maryland. Joey has managed retail and long-term care pharmacy operations in Kentucky, Illinois and Indiana. Leading Over The Counter is a blog of Joey's views and opinions on the topics of pharmacy leadership and management and do not represent the University of Maryland, Baltimore. Joey can be followed on Twitter @joeymattingly.

2 Responses to “#PharmEconFriday: The QALY

  • I’d enjoy a follow-up post of how QALYs get used to allocate resources — perhaps with a case example or two?

    • Great idea! Resource allocation is a big reason this “adjustment” is so controversial. Trying to put a value on time/life is so challenging. Also very different throughout the world.

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