Pharmacoeconomics

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Pharmacoeconomics

• Drug Policy Issues for Transitional countries
• Uzbekistan
• C. Cashin, R. Laing

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What is PharmacoEconomics (PE)?
Outcomes
Inputs Costs
Health Care
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Pharmacoeconomics (PE)

• Compares the costs and consequences (outcomes) of
  drug therapies and medical interventions
• PE analysis
• efficient allocation of limited resources among
  competing alternative medications and services
• biggest bang for your buck, using a quantitative
  measure

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Costs

• What is cost?
• How is cost different from price?
• Do we know the cost of drugs?

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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

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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)

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Outcomes

• Both positive and negative outcomes should be
  addressed
• Positive outcomes drugs efficacy measure
• Negative outcomes ADR and treatment failure

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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?

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Pharmacoeconomic Methods

• Cost-minimization analysis (CMA)
• assumes equal outcomes
• Cost-effectiveness analysis (CEA)
• measures outcomes in natural/physical units
• Cost-utility analysis (CUA)
• measures outcomes in QALYs
• Cost-benefit analysis (CBA)
• measures both benefits and costs in

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Cost-Effectiveness Analysis

• Used to evaluate cost and outcome of therapy
• outcome measure in non-dollar units
• Results expressed as cost-effectiveness ratio
• cost/treatment
• cost/outcome
• cost/life saved

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Cost-Effective

• Cost-Effective is NOT the least expensive
• Less expensive and at least as effective
• More expensive with an additional benefit worth
  the additional cost
• Less expensive and less effective
• extra benefit provided by competing therapy is
  not worth the extra cost

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Decision Making
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Available Sources of Data for Pharmacoeconomic
Analysis

• Stock / Purchasing Records
• trends and changes in usage
• ABC analysis
• Adverse Drug Reaction Program Data
• identify areas to study
• Non-Essential / Non-Formulary Monitoring
• Effectiveness from clinical trial data

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Incremental Cost Analysis (ICA)

• When comparing 2 therapies, ICA assesses what the
  added cost per net effect for alternative therapy
  would be
• ICA is the difference in total costs of 2
  therapies divided by difference in effectiveness
  of the 2 therapies

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Example

• Therapy A costs 2500 and saves 10 lives
• C/E ratio 250/life saved
• Therapy B costs 5000 and saves 15 lives
• C/E ratio 333/life saved
• ICA 5000-2500 or 500/life saved
• 15-10

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Sensitivity Analysis

• How sensitive are the results to different values
  of key variables
• What if scenarios, e.g.,
• a. Assume different cost of drug or outcome
• b. Assume different probability of an
  outcome

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Conclusions

• Pharmacoeconomics can guide choices among
  alternative medications, treatment regimens and
  services based on a combination of costs and
  outcomes.
• Results and interpretation of pharmacoeconomic
  studies are influenced by the perspective of the
  studythere is no one right answer.