The What and Why of Budget Impact Models

Budget Impact Models (BIMs) are increasingly important tools for global healthcare decision-makers, both in the public and private sectors. Decision-makers in many regions including Australia, North America, Europe (England and Wales, Spain, Belgium, France, Hungary, Italy and Poland), South America (Brazil and Columbia), Asia (South Korea, Taiwan and Thailand), and Israel have requested BIMs to support formulary listings or reimbursement (1. ref). But what are BIMs, and why are they so important?


  • In brief, a BIM is a simple comparison of current and alternative treatment scenarios in terms of cost, considered over a defined time. The current and alternate scenarios will have differing market shares of treatments, thus leading to an associated budget impact.
  • In terms of cost, the BIMs primarily consider pharmacy prices, but they may also include direct medical costs, e.g. for BIMs in the area of diabetes, to produce a reflective and accurate budget impact it is important to include the additional direct medical costs of hypoglycaemia.
  • In terms of the population, a targeted patient cohort for the treatment is selected, which is then considered more fully to scale the cost per patient up to the cost for the population of interest.


  • Given healthcare systems’ local nature and decision-makers’ varying perspectives, a single estimate of budget impact is not a feasible option. A BIM can be developed to provide a valid computing framework that allows users to input the relevant data for their local population.
  • BIMs are used to explore and communicate the value of a treatment, which can be critical in informing pricing decisions and supporting negotiations between the pharmaceutical industry and external customers and payers.
  • BIMs are also used to support reimbursement and formulary listings (91% of Formulary Decision Makers agree that digital resources, such as a BIM, are essential to the process of making formulary decision (2. ref)).

If you would like to more about how to build an effective BIM please talk to us. We know what works when developing a convincing payer communication tool; we focus on the flow of the information within the tools, making sure we tell a valid story which decisions-makers can follow from beginning to end. For further information or to request a demonstration of our Budget Impact tools please click on the link below.

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1. Sullivan D S, Mauskopf A J, et al. Budget Impact Analysis – Principles of Good Practice: Report of the ISPOR 2012 Budget Impact Analysis Good Practice II Task Force. 2015. Available at:

2. Taking the Pulse® Formulary Decision Makers. Decision Resources Group. 2015.