Using Top-down and Bottom-up Costing Approaches in LMICs: The Case for Using Both to Assess the Incremental Costs of New Technologies at Scale

Abstract

Purpose: Estimating the incremental costs of scaling-up novel technologies in low-income and middle-income countries is a methodologically challenging and substantial empirical undertaking, in the absence of routine cost data collection. We demonstrate a best practice pragmatic approach to estimate the incremental costs of new technologies in low-income and middle-income countries, using the example of costing the scale-up of Xpert Mycobacterium tuberculosis (MTB)/resistance to riframpicin (RIF) in South Africa.

Materials and methods: We estimate costs, by applying two distinct approaches of bottom-up and top-down costing, together with an assessment of processes and capacity.

Results: The unit costs measured using the different methods of bottom-up and top-down costing, respectively, are $US16.9 and $US33.5 for Xpert MTB/RIF, and $US6.3 and $US8.5 for microscopy. The incremental cost of Xpert MTB/RIF is estimated to be between $US14.7 and $US17.7. While the average cost of Xpert MTB/RIF was higher than previous studies using standard methods, the incremental cost of Xpert MTB/RIF was found to be lower.

Conclusion: Costs estimates are highly dependent on the method used, so an approach, which clearly identifies resource-use data collected from a bottom-up or top-down perspective, together with capacity measurement, is recommended as a pragmatic approach to capture true incremental cost where routine cost data are scarce.

Keywords: LMICs; cost analysis; diagnostics; economies of scale; scale-up; tuberculosis.