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

PurposeEstimating 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 methodsWe estimate costs, by applying two distinct approaches of bottom‐up and top‐down costing, together with an assessment of processes and capacity.ResultsThe 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.ConclusionCosts 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.

Bottom-up or top-down: unit cost estimation of tuberculosis diagnostic tests in India

“…6 Costs may differ at scale and in routine settings. 7 We present the unit costs of the Xpert assay, SSM and other commonly used drug resistance tests in India across a range of geographic and laboratory settings. For scale-up purposes, costs estimated by bottom-up and top-down methods may be equally important.…”

“…For scale-up purposes, costs estimated by bottom-up and top-down methods may be equally important. 7 We therefore estimated costs with the bottom-up or ingredient approach and with the topdown method, and we present a full capacity costing of Xpert. These estimates, under different conditions of service volume, inform scale-up decisions of Xpert across different sites in India.…”

Cost-effectiveness of Xpert MTB/RIF for tuberculosis diagnosis in South Africa: A real-world cost analysis and economic evaluation

“…Additionally, the roll-out of Xpert required supportive activities, including restructuring of workloads in laboratories and quality control. 17 Xpert roll-out commenced in March, 2011, with sequential capacitation of laboratories with large, medium, and small sputum specimen volumes. National roll-out was completed in December, 2013.…”

“…Because the details of our costing methods, prices, and unit costs of each patient event are reported elsewhere, 17,19 we only provide a brief overview in this Article. We used primary data collection methods to estimate all costs (including human resource costs) at both the site and above-site levels.…”

“…We included all capital and recurrent costs at the facility and laboratory (site) level, and the above-site level costs incurred by the central laboratory services, including quality control and training for both Xpert and sputum smear microscopy. 17 We collected cost data from all 20 XTEND peripheral laboratories and one reference laboratory. We measured diagnostic test costs at each of these laboratories during two periods (in the first 2 months and last 2 months of the XTEND study).…”