Tough Choices: The Cost-Effectiveness of Sildenafil

• Cost-benefit analysis
• Sildenafil
• Insurance, pharmaceutical services
• Insurance, health
• Impotence

When sildenafil (Viagra, Pfizer, Inc., New York, New York) was released to the U.S. commercial market in April 1998, it rocked the nation. Here was a simple-to-take oral treatment for erectile dysfunction; previous treatments had required penile injection, insertion of a urethral suppository, use of bulky mechanical suction devices, or surgical implants. Sildenafil sold for about $10 a pill.

Reaction from the health insurance industry was swift—and confused. Most existing treatments for erectile dysfunction had been covered by insurers under the rubric of their policies on “medical necessity.” Such policies, which are used to determine insurance coverability, commonly invoke concepts of appropriateness, demonstrated effectiveness, and accepted medical practice; they exclude coverage of therapies that are prescribed primarily for the convenience of the patient, family, or prescribing physician. Most men did not speak openly or easily about their erectile problems, and existing treatments did not invite overuse. But sildenafil was something entirely different. With an estimated 30 million men in the United States having erectile dysfunction (1), and untold millions more assumed to be yearning for even greater virility, the likelihood of explosive additional costs to insurers seemed very real.

In the face of this new treatment, insurers adopted various approaches. Some chose not to cover sildenafil at all, risking challenge to the consistency with which they applied their own medical necessity policies. Others announced that they would defer their decision for several months in order to …