Cost Utility Analysis (CUA) MCQs With Answer

Cost Utility Analysis (CUA) MCQs With Answer — Introduction

Cost-Utility Analysis (CUA) is a core tool in pharmacoeconomics that compares health interventions by integrating both quality and quantity of life, typically using quality-adjusted life years (QALYs). For M.Pharm students, understanding CUA is crucial for evaluating therapies, informing formulary choices, and contributing to health technology assessments. This set of multiple-choice questions focuses on theoretical foundations, utility measurement methods, QALY calculations, incremental cost-effectiveness ratios (ICERs), thresholds, discounting, sensitivity analyses, and decision rules like dominance and net monetary benefit. The questions include conceptual items and practical numerical problems to deepen analytical skills needed in research and professional practice.

Q1. What best describes Cost-Utility Analysis (CUA)?

• An economic evaluation that compares costs and clinical effectiveness measured only in natural units, such as life-years gained
• An economic evaluation that compares costs and outcomes by combining length and quality of life into a single metric, usually QALYs
• A budgeting tool used to set drug prices without considering patient preferences
• A qualitative assessment of patient-reported outcomes without cost considerations

Correct Answer: An economic evaluation that compares costs and outcomes by combining length and quality of life into a single metric, usually QALYs

Q2. Which statement correctly defines a QALY?

• A measure of cost per life saved regardless of quality of life
• A composite measure that multiplies duration of life by a utility weight representing quality of life
• A raw health status score from disease-specific instruments
• A measure of resource utilization per patient

Correct Answer: A composite measure that multiplies duration of life by a utility weight representing quality of life

Q3. Which of the following is an example of an indirect utility measurement instrument?

• Time Trade-Off (TTO)
• Standard Gamble (SG)
• EQ-5D
• Visual Analogue Scale (VAS)

Correct Answer: EQ-5D

Q4. A patient lives for 4 years after treatment with a constant health-state utility of 0.65. How many QALYs are gained?

• 0.65 QALYs
• 2.6 QALYs
• 4.65 QALYs
• 6.5 QALYs

Correct Answer: 2.6 QALYs

Q5. What is the correct formula for the incremental cost-effectiveness ratio (ICER)?

• ICER = (Cost_new + Cost_old) / (Effect_new + Effect_old)
• ICER = (Effect_new – Effect_old) / (Cost_new – Cost_old)
• ICER = (Cost_new – Cost_old) / (Effect_new – Effect_old)
• ICER = (Cost_old – Cost_new) * (Effect_old – Effect_new)

Correct Answer: ICER = (Cost_new – Cost_old) / (Effect_new – Effect_old)

Q6. A new drug costs $20,000 and yields 3.5 QALYs. The current standard costs $10,000 and yields 2.5 QALYs. What is the ICER (cost per QALY) of the new drug versus standard?

• $5,000 per QALY
• $10,000 per QALY
• $20,000 per QALY
• $30,000 per QALY

Correct Answer: $10,000 per QALY

Q7. Which scenario describes “dominance” in economic evaluation?

• New treatment is more effective and more costly than comparator
• New treatment is less effective and less costly than comparator
• New treatment is both more effective and less costly than comparator
• New treatment is equally effective and costs the same as comparator

Correct Answer: New treatment is both more effective and less costly than comparator

Q8. Which statement about discounting in CUA is correct?

• Discounting increases future costs and benefits to give them more weight
• Discounting adjusts future costs and benefits to present value, typically reducing their magnitude
• Discounting is applied only to costs and never to health outcomes such as QALYs
• Discounting is unnecessary when follow-up is less than one year

Correct Answer: Discounting adjusts future costs and benefits to present value, typically reducing their magnitude

Q9. The willingness-to-pay (WTP) threshold in CUA is best described as:

• The maximum cost of a drug regardless of benefit
• The minimum clinical benefit required for regulatory approval
• The monetary value decision-makers are prepared to pay for one additional QALY
• A figure set by manufacturers to price new technologies

Correct Answer: The monetary value decision-makers are prepared to pay for one additional QALY

Q10. What is the formula for incremental net monetary benefit (NMB)?

• NMB = ΔC – (λ × ΔE)
• NMB = (λ × ΔE) – ΔC
• NMB = (ΔE / λ) + ΔC
• NMB = ΔE × ΔC

Correct Answer: NMB = (λ × ΔE) – ΔC

Q11. Which of the following best distinguishes probabilistic sensitivity analysis (PSA) from deterministic sensitivity analysis?

• PSA varies one parameter at a time to see its effect on results
• PSA uses predefined scenario analyses but does not quantify uncertainty
• PSA assigns probability distributions to parameters and propagates uncertainty through simulation
• PSA ignores parameter uncertainty and focuses on point estimates

Correct Answer: PSA assigns probability distributions to parameters and propagates uncertainty through simulation

Q12. On the cost-effectiveness plane, which quadrant represents a new intervention that is more effective but also more costly?

• Northwest (more costly, less effective)
• Northeast (more costly, more effective)
• Southwest (less costly, less effective)
• Southeast (less costly, more effective)

Correct Answer: Northeast (more costly, more effective)

Q13. Which is a key conceptual difference between QALYs and DALYs?

• QALYs measure only mortality while DALYs measure only morbidity
• QALYs combine quality and length of life as gains; DALYs measure health loss relative to an ideal
• DALYs are used exclusively in clinical trials, QALYs are used only in observational studies
• QALYs are preference-based but DALYs are not

Correct Answer: QALYs combine quality and length of life as gains; DALYs measure health loss relative to an ideal

Q14. Which method is often considered most appropriate for eliciting utilities in paediatric populations?

• Standard Gamble administered directly to very young children
• Proxy reporting by parents using age-appropriate preference-based instruments
• Time Trade-Off with adolescent-specific anchor states only
• Using adult utilities without adjustment

Correct Answer: Proxy reporting by parents using age-appropriate preference-based instruments

Q15. What is “mapping” in the context of utility estimation?

• Direct elicitation of utilities using the Standard Gamble
• Converting clinical or disease-specific quality-of-life scores into generic preference-based utility values using an algorithm
• Switching between different economic evaluation methods
• Adjusting costs for inflation

Correct Answer: Converting clinical or disease-specific quality-of-life scores into generic preference-based utility values using an algorithm

Q16. If a new intervention is less costly and yields fewer QALYs than standard care, how would it appear on the cost-effectiveness plane and what decision is typically required?

• Northeast quadrant; accept always because more effective
• Southwest quadrant; decision requires judgment about acceptable loss in effectiveness for cost savings
• Northwest quadrant; reject because it is more costly and less effective
• Southeast quadrant; accept always because it is dominant

Correct Answer: Southwest quadrant; decision requires judgment about acceptable loss in effectiveness for cost savings

Q17. A cost-effectiveness acceptability curve (CEAC) shows:

• The probability that an intervention is cost-effective across a range of willingness-to-pay thresholds
• The single ICER value with no uncertainty
• How to map clinical outcomes to utilities
• The incremental cost per natural unit of outcome

Correct Answer: The probability that an intervention is cost-effective across a range of willingness-to-pay thresholds

Q18. Why are Markov models commonly used in CUAs for chronic diseases?

• They require only cross-sectional data and ignore time dependence
• They allow modelling of disease progression over time with recurring events and state transitions
• They produce deterministic costs without probabilistic outputs
• They eliminate the need to assign utilities to health states

Correct Answer: They allow modelling of disease progression over time with recurring events and state transitions

Q19. The Time Trade-Off (TTO) method elicits utilities by asking respondents to:

• Choose between two risky prospects with known probabilities
• Rate health states on a numerical scale from 0 to 100 only
• Indicate how many years in full health they consider equivalent to a longer time in a suboptimal health state
• Submit to clinical tests to determine utility weights

Correct Answer: Indicate how many years in full health they consider equivalent to a longer time in a suboptimal health state

Q20. What is the key distinguishing feature of the Standard Gamble (SG) compared with TTO?

• SG uses time preference explicitly while TTO uses risk preferences
• SG involves choices under uncertainty using probabilities of perfect health versus death, capturing risk attitudes
• SG provides direct mapping from disease-specific scores to utilities
• SG is always less valid than indirect measures like EQ-5D

Correct Answer: SG involves choices under uncertainty using probabilities of perfect health versus death, capturing risk attitudes

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