PHARMACOECONOMICS

Jinender Kumar

Pharmacoeconomics Research Uses of Pharmacoeconomics Research Need for Pharmacoeconomics Research Types of Pharmacoeconomics Research Sensitivity Analysis Discounting Journals References

Preview

PHARMACOECONOMICS RESEARCH Sub-discipline of health economics compares the costs (i.e resources consumed)

and consequences (i.e economic, clinical and humanistic) of the drug therapies and medical interventions

PE analysis efficient allocation of limited resources among

competing alternative medications and services

VALUE

Health Outcome

Cost

USE OF PHARMACOECONOMIC RESEARCH Pharmaceutical reimbursement Selecting formulary products Price Negotiations Clinical Practice Development guidelines Communication to prescribing physicians

NEEDS TO MONITOR VALUE OF PHARMACEUTICALS Increased cost. Increased number of alternatives available to

treat illness and disease. Growing demand for pharmaceuticals. Introduction of high cost biotechnology

products.

TYPES OF PHARMACOECONOMIC EVALUATION Cost-minimization analysis (CMA) Cost-benefit analysis (CBA) Cost-effectiveness analysis (CEA) Cost-utility analysis (CUA) Cost-consequence analysis (CCA)

COMPARING PHARMACOECONOMIC METHODOLOGIES

METHODOLOGY

Cost-Minimization

Cost-Effectiveness

Cost-Benefit

Cost-Utility

Cost-Consequence

CONSEQUENCES

Natural Units

Natural Units

Dollars

Quality-Adjusted Life Years (QALYs)

Natural Units, Dollars or

QALYs

STEPS FOR CONDUCTING A PHARMACOECONOMIC EVALUATION Defining the problem and stating the

objective. Identifying the perspective and alternative

interventions to be compared. Identifying and measuring the outcomes of

each alternative. Identifying, measuring and valuing the costs

of all alternatives.

DEFINE THE PROBLEM AND STATE THE OBJECTIVE All pharmacoeconomic evaluation should

have a clear and concise statements of problem or question to be addressed.

e.g. What is the most cost-effective regimen for the treatment of type II diabetes?

PERSPECTIVE

Point of view from which the study is taken Determines what will be measured, what are

the costs and benefits, and how they will be valued

Guides and limits application of study results What are the possible perspectives in PE

studies?

PERSPECTIVE

Pharmacoeconomic evaluation can be conducted from several different perspectives including the employer, the patient, the health insurance plan, society, or the government.

IDENTIFYING ALTERNATIVE INTERVENTIONS Which alternative should be compared in

pharmacoeconomic evaluation?

IDENTIFYING ALTERNATIVE INTERVENTIONS Alternatives should be compared only when

one of the alternatives is either more costly or more effective.

IDENTIFY AND MEASURE OUTCOMES OF EACH ALTERNATIVE INTERVENTIONSome of the outcomes of the treatment are: A cure (health is restored) Improved quality of life Decreased incidence of morbidity Extended life Relief or reduction in symptoms No effect Increased morbidity Mortality

OUTCOMES

Both positive and negative outcomes should be addressed

Positive outcomes: drug’s efficacy measure Negative outcomes: ADR and treatment

failure

IDENTIFYING,MEASUREMENT AND VALUATION OF COSTS

From the measurement aspect, two components are costs and consequences

Three important concepts related to costs are identifying, measuring, and placing a value on resources or costs.

IDENTIFYING RELEVANT COSTS What is cost?

How is cost different from price?

COSTS

Direct costs: costs to deliver services to patient; both medical and non-medical

Indirect costs: cost of treatment to patient or society

Intangible costs: quality of life

Costs can be described in many ways Cost / unit (cost/tab, cost/vial) Cost / treatment Cost / person Cost / person / year Cost / case prevented Cost / life saved Cost / DALY (disability-adjusted life year)

MEASURING COSTS

After cost identification the next step involves measuring the costs.

Measurement involves counts of resources consumed in units depending on the type of costs.

VALUING COSTS

After cost measurement, the next step involves placing a dollar value on the resources.

SENSITIVITY ANALYSIS

Test key outcome or cost assumption of an analysis to determine how sensitive the results are to variation or to uncertainty.

In pharmacoeconomic evaluations, the accuracy with which costs can be identified, measured, or valued will vary.

DISCOUNTING

The purpose of discounting is to present all costs in their present value and to incorporate the society’s time preference for money.

Alternatives that have costs or benefits realized at different times should be discounted to a present value to make valid comparisons.

JOURNALS

Value in Health Pharmacoeconomics Health Economics Pharmacoeconomics and Outcomes News Clinical Therapeutics - Pharmaceutical

Economics & Health Policy Health Affairs (The Policy journal)

REFERENCES

1. http://ispor.org/Terminology/Default.asp

2. Bootman JL, Townsend RJ, Mcghan WF. Principles of Pharmacoeconomics. 3 rd edition. Harvey Books Company. 2005.

3. McCArthy Rl, Schafermeyer KW. Introduction to Health Care Delivery. 3rd edition. Jones and Barlett Publisher. 2004.

4. Bonk RJ. Pharmacoeconomics in Perspective:a primer on reseach, techniques and perspective. Pharmaceutical product press. 1999.

5. Rychlik R.Strategies and Pharmacoeconomics and Outcomes Research. Pharmaceutical Heritage Edition. 2003.

6. Vogenberg FR. Introduction to Applied Pharmacoeconomics. Mcgraw-Hill Publications. 2001.

ASSIGNMENT

Prepare a short report on each type of pharmacoeconomics analysis. How each type of PE analysis is defined? What perspectives can be taken in each type of PE

analysis ? How CER, CBR, and CUR are defined? How ICER, ICBR, and ICUR are defined? What type of data can be used to conduct PE analysis ? What are different study designs to conduct PE

analysis? Examples of each type of PE analysis.