Which statement best describes the primary use of scenario analysis in economic evaluations?

• A. It uses random sampling of inputs to assess uncertainty.
• B. It quantifies parameter uncertainty across distributions.
• C. It analyzes predefined alternative circumstances to explore plausible outcomes.
• D. It eliminates all uncertainties.

Answer: (C)

Scenario analysis looks at predefined alternative circumstances to see how results would unfold under different, plausible conditions. It’s a way to test the robustness of conclusions by changing key drivers—such as costs, effectiveness, uptake, or prices—and observing how the incremental costs and outcomes shift. This helps decision-makers understand whether a result holds across reasonable scenarios, rather than relying on a single set of assumptions.

This differs from probabilistic methods that randomly sample inputs to quantify uncertainty across distributions, and it doesn’t aim to eliminate uncertainty—only to show how outcomes respond to different plausible conditions. For example, in a cost-effectiveness evaluation of a new treatment, scenario analysis might compare a high-adherence scenario, a low-adherence scenario, and a scenario with a negotiated price, illustrating how the decision might change under each case.