# Bayes Pharma 2012

Earlier this week, I went to the third edition of Bayes Pharma, which turned out to be quite an interesting short conference. Most people in the audience probably were from the industry (although there was a very nice balance and quite a few people were from academia). The tone of the talks was, of course, pretty much of the Bayesian persuasion and the quality was very high, I thought!

Anyway, here is my (invited - thanks again for that, Julien Cornebise!) talk. I thought it went down pretty well and got quite a few interesting questions. The point of the talk is that while standard cost-effectiveness analyses assume perfect substitution (of the non cost-effective interventions, in favour of the most cost-effective one), in practice, quite often markets are not so elastic and some of the sub-optimal interventions are still available, thus leading to market inefficiencies.

Tools like our beloved Expected Value of Information could be still used to quantify the loss in efficiency, like so:

The grey area indicates the loss in efficiency (ie the increase in the expected value of information, or to put it another way, the increased impact of parametric uncertainty on the optimal decision, given by the fact that non cost-effective alternatives are available on the marked).

Hope you’ll like it!

PS Aachen was very nice too!