Pharmacoeconomics

pharmacoeconomics

1. Pharmaco-Economics Dr. Renu Yadav Resident Pharmacology

2. Contents Definition Cost Classification Outcome and Perspective Types of PE Analysis Cost Effectiveness Plane Application of PE Methods of PE PE Steps Conclusion

3. Definition Pharmacoeconomics is the discipline concerned with optimal allocation of resources to maximize population health from the use of medicines. Pharmacoeconomics has been defined as the description and analysis of the costs of drug therapy to health care systems and society.

4. Treatment Cost Outcome Only left Cost analysis (partial economic analysis). Only right Clinical analysis/outcome analysis (not economic analysis).

5. Cost Classification Direct : From the persepective of healthcare funder including staff cost, capital , drug acquisition cost. Indirect : From persepective of a society as a whole eg loss of earning, loss of leisure time, etc Intangible : Pain worry , other distress. Measured in terms of quality of life. Opportunity Cost : lost opportunity, revenue forgone

6. Outcome The term outcome is increasingly being used to describe the result and value of healthcare intervention. It’s a multidimensional term More focused on resource use, or economic outcome of healthcare decision. Whereas patients want to focus on humanistic outcome of a therapy.

7. Types of Outcome Economic Clinical Humanistic

8. Pharmacoeconomics is a type of outcomes research, but not all outcomes research is pharmacoeconomic research.

9. Pharmacoeconomics overlaps with both health care economics and pharmacy-related clinical or humanistic outcomes. Health care economics encompasses a broad range of topics, including supply and demand for health care resources, the effects of health insurance, and manpower supply. Clinical or humanistic outcomes research is defined as the attempt to identify, measure, and evaluate the end results of health care services. It may include not only clinical and economic consequences but also outcomes such as patients’ health status and satisfaction with their health care.

10. Perspective Perspective is an economic term that describes whose costs are relevant based on the purpose of the study. M ost appropriate and comprehensive perspective is that of society.

11. Societal costs include costs to the insurance company, costs to the patient, costs to the provider/institution, other sector costs, and indirect costs because of the loss of productivity. If the perspective of the analysis is that of the payer, the amount that is reimbursed should be used when estimating costs. If the perspective is that of the patient, his or her out of-pocket expenses, such as co-payments, deductibles, lost wages, and transportation costs, would be estimated.

12. Why pharmacoeconomics ???

13. Why P harmacoeconomics ? Health care costs have been increasing each year more than the average rate of inflation. N eed to understand how limited resources can be used most efficiently and effectively. If a new branded medication that has an advantage over another marketed medication that is less expensive, the professional can take this into account depending on demographic , clinical , and economic consideration. Deciding whether the added advantage is worth extra cost.

14. E valuating D ifferent T ypes of Analysis Efficacy : optimal circumstances Effectiveness : usual circumstances Efficiency : cost-effectiveness Comparison with alternative therapy/therapies requires consideration of costs to be included, perspective, timeframe, effectiveness metric, discount rate, assumptions disease endpoints assessed by indices of therapeutic outcome

15. Types of PE Analysis Cost - minimization analysis Cost - effectiveness analysis Cost - utility analysis Cost - benefit analysis Others - cost of illness analysis , cost - consequence analysis

16. Cost - Minimization Analysis Simplest to conduct because the outcomes are assumed to be equivalent; thus, only the costs of the intervention are compared. Example: 1. Comparing cost of drug A and drug B which have equal efficacy for a given condition. 2. Generic drugs Disadvantage : Cannot be used when outcome is different.

17. Study Example of CMA Cost-Minimization Analysis of Metformin and Acarbose in Treatment of Type 2 Diabetes. ( https://doi.org/10.1016/j.vhri.2015.03.012 ) Zhiliu Tang, PhD , Lizheng Shi, PhD Monika Sawhney, PhD , Huimei Hu, MPA , Hengjin Dong, PhD

18. Cost-Effectiveness Analysis CEA measures outcomes in natural units (e.g., mm Hg, cholesterol levels, symptom-free days [SFDs], years of life saved) Average cost effectiveness ratio (ACER) Cost is measured in MONETARY UNITS, and outcomes are measured in terms of obtaining a specific therapeutic outcome.These outcomes are often expressed in physical units, natural units, or nondollar units (lives saved, cases cured, life expectancy, or drop in blood pressure). The results of CEA are also expressed as a ratio—either as an average cost-effectiveness ratio (ACER) or as an incremental cost effectiveness ratio (ICER). An ACER represents the total cost of a program or treatment alternative divided by its clinical outcome to yield a ratio representing the dollar cost per specific clinical outcome gained, independent of comparators. This formula yields the additional cost required to obtain the additional effect gained by switching from drug A to drug B.

19. Example: difference of fall in mmHg with amlodipine with telmisartan compared with difference in their prices. Advantag e: outcomes are easier to quantify, comfortable for practioners . Disadvantage : 1.Programs with different outcomes cannot be measured. 2. Different side effects of different medications cannot be compared ( eg fexofenadine and diphenhydramine). 3. Can’t determine if added benefit is worth added cost.

20. Study Example of CEA Cost-effectiveness analysis of metformin + dipeptidyl peptidase-4 inhibitors compared to metformin + sulfonylureas for treatment of type 2 diabetes Christina S. Kwon ,  Enrique Seoane -Vazquez  &  Rosa Rodriguez- Monguio   BMC Health Services Research   volume 18 , Article number: 78 (2018) 

21. Cost - Utility Analysis CUA is a subset of CEA. Measuring quality of life or utility not years of life (Quality-adjusted life Year(QALY) represent the number of full years at full health that are valued equivalently to the number of years as experienced) Range from 1.0 for “perfect health” to 0.0 for “dead.” Disadvantage : there is no consensus on how to measure these utility weights, and they are more of a “rough estimate” than a precise measure.

22. Study Example of CUA Cost-Utility Analysis of Screening Intervals for Diabetic Retinopathy in Patients With Type 2 Diabetes Mellitus Sandeep Vijan , MD, MS ;  Timothy P. Hofer, MD, MS ;  Rodney A. Hayward, MD Author Affiliations JAMA. 2000;283(7):889-896. doi:10.1001/jama.283.7.889

23. Cost - Benefit Analysis Cost and outcome are both measured in monetary terms. Advantage - Easy to determine if the benefit of a program exceed cost of implementation -Compare multiple programs. Disadvantage - Imprecise placement of monetary values to health outcome.

24. Study Example of CBA Cost-benefit analysis of vaccination: a comparative analysis of eight approaches for valuing changes to mortality and morbidity risks. Minah Park ,  Mark Jit  &  Joseph T. Wu   BMC Medicine   volume 16 , Article number: 139 (2018)

25. Cost - Consequence Analysis If only a list of costs and a list of various outcomes are presented, with no direct calculations or comparisons, this is termed a cost-consequence analysis (CCA).

26. Cost of Illness Analysis Determines the total economic burden (including prevention, treatment, losses caused by morbidity and mortality, and so on) of a particular disease on society. Direct Indirect Intangible Opportunity

27. Advantage : Indicates the magnitude of resources needed for a specific disease or condition. Used to compare the economic impact of one disease versus another

28. Cost - Effectiveness Plane This cost-effectiveness plane is a visual method for representing the comparison of alternatives. 4 quadrants

29. Cost - Effectiveness Plane Difference in cost Difference in effect Maximum willingness to pay Region of cost-effectiveness Q 1 Q2 Q3 Q4

30. Applications of Pharmacoeconomics Quantify the value of pharmacy products and pharmaceutical care services Clinical and policy decision making Drug therapy evaluation Clinical pharmacy service evaluation

31. PE Evaluation Steps Define the pharmacoeconomic problem Assemble a cross-functional study team Define the appropriate study perspective Identify treatment alternatives and outcomes Identify the appropriate pe method to employ Place a monetary value on treatment alternatives and outcomes

32. 7. Identify resources to conduct study in an efficient manner 8. Identify probabilities that outcomes may occur in the study population 9. Employ decision analysis 10. Discount costs or perform a sensitivity or incremental cost analysis 11. Present study results 12. Develop a policy or an intervention 13. Implement policy and educate professionals 14. Follow up documentation