What Is Cost Minimization Analysis?

Cost-minimization is a tool used in pharmacoeconomics to compare the cost per course of treatment when alternative therapies have demonstrably equivalent clinical effectiveness. Therapeutic equivalence must be referenced by the author conducting the study and should have been done prior to the cost-minimization work.

What is cost-minimization analysis in economics?

Cost minimisation analysis is a method of comparing the costs of alternative interventions (including the costs of managing any consequences of the intervention), which are known, or assumed, to have an equivalent medical effect.

What is a cost minimization model?

Updated December 22, 2018. Cost minimization is a basic rule used by producers to determine what mix of labor and capital produces output at the lowest cost. In other words, what the most cost-effective method of delivering goods and services would be while maintaining a desired level of quality.