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Discounting and consumption costs

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Reference no: EM132248038

A miraculous vaccine is invented to treat the common cold. The new vaccine costs $40,000 and one dose lasts for a lifetime. The vaccine increases each person's remaining life expectancy by 1%. In addition, the vaccine increases the QALY weight in an average year from 0.99 to 1. Assume the value of a QALY is $100,000, and ignore discounting and consumption costs.

a) Before the vaccine, a 50 year old person expected to live until they were 75 years old. For this 50 year old, is the vaccine worth the cost?

b) What about for a 20 year old person who expected to live until they were 75?

Reference no: EM132248038

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