Pharmacoeconomics

Introduction To Pharmacoeconomics, Objectives, Need of Pharmacoecomics, Four methods of Pharmaeconomics Evaluation, Basic Terminology, Importance of
Pharmacoeconomics.

1. Pharmacoecomics
PRESENTED BY
MS. MONIKA P. MASKE
ASSISTANT PROFESSOR
M. PHARM
(PHARMACEUTICAL CHEMISTRY)
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2. Introduction To
Pharmacoeconomics
oPharmacoeconomics is the branch of economics that
uses cost-benefit, cost-effectiveness, cost minimization,
cost of illness and cost utility analyses for comparing
pharmaceutical products and treatment strategies.
oIt’s a part of health economics focusing on economic
estimation of drugs.
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3. oCost can be measured in following ways cost/unit,
cost/treatment, cost/person, cost/person/year, etc.
oPharmacoeconomics coined by Townsend in 1986.
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4. Pharmacoeconomics
Humanistic
1. Quality of life
2. Patient preferences
3. Patient satisfaction
Economic
1. Cost benefit
2. Cost effectiveness
3. Cost minimization
4. Cost utility
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5. Objectives
oOutline the issues and theory.
oTo show its application to make decision about drug
therapy.
oTo show application in decreasing financial burden on
the consumers for effective managing of healthcare
system.
oThe limited resources more effective for expansion of
healthcare benefit at lower cost.
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6. Need of
Pharmacoecomics
oTo find out the optimal therapy at lowest cost.
oIn industry to develop specific research and development
alternatives.
oIn public to design health insurance benefits.
oIn government the determine programmer benefits and
prices.
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7. Four methods of
PharmaeconomicsEvaluation
1. Cost-Minimization Analysis (CMA)
It involves measuring only costs, of health services
ex. Prescribing generic medicine instead of brand
leader.
2. Cost-Effectiveness Analysis (CEA)
It refers to the whole of economic evaluation but
specifically a particular type of evaluation in which the
health benefit can be defined and measured in natural
units. Ex. Years of life saved, etc.
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8. 3. Cost-Utility Analysis (CUA)
Its similar to cost effectiveness but the outcome is
a unit of utility. Ex. Quality adjusted life years (QALY) is
coronary artery bypass versus cost for erythropoietin in renal
diseases.
4. Cost-Benefit Analysis (CBA)
The benefit is measured as the associated
economic benefit of an intervention. Ex. Monitor value of
returning a worker to employment earlier.
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9. Basic Terminology
oPharmacoeconomic –It’s the branch of health
economics that deals with the evaluation of the
costs and consequences of therapeutic decision
making.
oCost of Drugs –It’s the total resources spent in
making the drug or drug preparation.
oPrice –It’s the amount a customer pays for a
product or service.
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10. oQOL(QualityofLife)–Anindividual’spreparationoftheir
positioninlifeinthecontextofthecultureandvaluesystem
inwhichtheyliveandinrelationtotheirgoals,expectations,
standardsandconcerns.
oTimeTradeOff(TTO)–It’satooltohelpdetermineQOLof
patient.
oQALY–QualityAdjustedLifeYears.
oDiscounting–It’samethodfortimeadjustmentforcosts
wherethefuturecostsarebroughttothepresent.
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11. Direct Cost
oThese are the resources consumed in the prevention,
detection or treatment of a disease or illness.
oIt involve transfer of money.
A) Direct Medical Cost : Represents costs that are
incurred during provision of care.
Ex. Cost of drugs, lab tests, salaries of health care
professionals.
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12. B) Direct Non-Medical Costs : Arising due to illness
but do not involve purchasing medical services.
Ex. Cost of transportation, cost of special clothing's, etc.
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13. Indirect Cost
oIt’s the external cost or indirect cost.
oThese are costs of reduced productivity.
oIt is the one borne by the patient and family.
oEx. Wages and salaries lost due to mortality and
morbidity.
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14. Intangible Costs
oThese are costs incurred, which represent non -financial
outcomes of disease and medical care, which cannot
be expressed in money value.
oIts related to the patients pain, worry and suffering the
patients family.
oEx. Quality of life for patients of cancer, arthritis.
oIts difficult to measure and presently included in indirect
costs.
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15. Utility Unity & Quality of Life
oUtility Unity :-It evaluates the changes in a patients
satisfaction or sense of safety as an effort to calculate the
approved result from moving from one state to other for
the use of drug therapy.
oQuality of Life :-It involves physical and psycho-social
dimensions of life. physical dimensions include presence
or absence of ache and immobility; while psycho-social
dimensions include level of anxiety, depression and
reduced ability of patient to deal with issues.
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16. Importance of
Pharmacoeconomics
oPharmacoeconomic analysis helps to achieve
maximum benefit in limited cost.
oClinicals want their patients to receive best care
and outcome available.
oThe payers want to manage rising costs.
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17. oPharmacoecomicscombines the objectives of both
clinics and payers by estimating the value of patient
outcomes for the expenditure spent on medications
and other healthcare services.
oIn todyshealthcare settings, Pharmacoecomics
methods can be applied for effective formulary
management, individual patient treatment,
medication policy determinations and resource
allocation.
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