pharmacoeconomics76858657547654787658.pptx

Pharmacoeconomics

1. pharmacoeconomics TALHA SHAHID

2. outline Introduction Need of Pharmacoeconomics Goals Costs and types Perspectives of Pharmacoeconomics Types of Pharmacoeconomic studies Applications Conclusion

3. introduction Term coined by Townsend in 1986 Branch of health economics Making choices between options, when there is scarcity of resources Fundamentally comparative, weighing the costs and benefits of 2 options- 󱁋 Most efficient

4. Pharmacoeconomics The description & analysis of the costs of drug therapy to health care system & society

5. Pharmacoeconomics research identifies, measures & compares the costs( i.e. resources consumed ) & consequences (i.e. clinical, economic , humanistic) of pharmaceutical products & services PE analysis Efficient allocation of limited resources among competing alternative medications and services Biggest bang for your buck, using a quantitative measure To make the best use of limited resources

6. Why study pharmacoeconomics ?? Helps to decide which drug to develop To estimate and understand the full impact of new therapy To make an informed decision regarding appropriate use of drug which have been developed To make the best use of limited resources

7. Goals: To determine which healthcare alternatives provide the best healthcare outcome in terms of money spent To improve the allocation of resources for pharmaceutical products and services

8. pharmacoeconomics

9. COSTS Cost vs. Price ?? Cost involves all the resources that are used to produce and deliver a particular drug therapy Types of Costs Direct costs Medical vs Nonmedical Indirect costs Intangible costs Opportunity costs

10. Direct Medical Costs : Costs of medical service These include: Fixed costs or costs that do not vary immediately with the number of patients treated. E.g. capital costs of hospital building or equipment etc. Variable costs or costs that vary immediately with number of patients treated. E.g. costs of drugs, syringes, needles etc. Direct non-medical costs : Costs incurred by the patient in receiving medical care. E.g. transportation to and from hospital.

11. Indirect cost : e.g. income lost because of absenteeism, loss of productivity Intangible costs Costs of pain, worry and other suffering which a patient or his family might suffer Opportunity costs : The amount lost by not using economic resources in its best alternative use ( labour , capital, building, management etc.) Resources invested in one area will be at expense of loss of another opportunity

12. PERSPECTIVES OF pHARMACOECONOMICS Patient perspective Provider perspective Payer perspective Societal perspective After selection of perspective next step cost related measurements Direct medical costs Direct non medical costs Indirect nonmedical costs Intangible costs Opportunity costs

13. PATIENT PERSPECTIVE All the relevant cost and consequences experienced by the patient Included costs: Direct Indirect Intangible

14. PROVIDER PERSPECTIVE Concerned with the expenses of providing products or services Included costs: -Direct costs only

15. PAYER PERSPECTIVE Social Security/Government, third party payers eg . private insurance companies and employers Included costs: -Direct costs -Indirect costs relevant to employers lost workdays lost productivity at work

16. SOCIETAL PERSPECTIVE The broadest of all perspectives that comprehensively evaluates all costs and consequences Considers the benefits to society as a whole Included costs: - Direct; overall cost of providing care - Indirect; loss of productivity

17. Echo model

18. OUTCOME PARAMETERS Clinical - As a result of disease or treatment -survival / mortality -morbidity Economic- Direct, indirect and intangible costs Humanistic -Patient preferences / Utilities -Quality of life

19. Types of study Cost Minimization Analysis Cost Effectiveness Analysis Cost Benefit Analysis Cost Utility Analysis

20. Cost Minimization Analysis (CMA) Compares the costs of two or more alternatives that have a demonstrated equivalence in therapeutic outcome Relatively straight forward and simple method Least cost alternative is chosen Examples: Brand vs. Generic products Different antibiotic therapies Different route of administration of the same drug

21. Cost-minimization analysis (CMA): in drug therapy Cost of therapies (₹) COSTS Drug A Drug B Acquisition cost 250 350 OUTCOMES Antibiotic effectiveness 90% 90%

22. Cost-minimization analysis (CMA): in drug therapy Cost of therapies (₹) COSTS Drug A Drug B Acquisition cost 250 350 Administration 75 Monitoring 75 25 Adverse effects 100 25 Subtotal 500 400 OUTCOMES Antibiotic effectiveness 90% 90%

23. Cost-Effectiveness Analysis (CEA) Form of economic evaluation whose goal is to identify, examine, and compare the relevant costs and consequences of competing drug regimens and interventions Costs are expressed in monetary terms Consequences are measure in their natural units, such as: - Cases cured - Lives saved - Hospitalization prevented Decision maker in identifying a preferred choice among possible alternatives

24. Result expressed as: cost per unit of success CER = cost / Effectiveness Choice is that of lower ratio

25. Cea in drug therapy Cost of therapies (₹) COSTS Drug A Drug B Acquisition cost 300 400 Administration 50 Monitoring 50 Adverse effects 100 Subtotal 500 400

26. Cea in drug therapy Cost of therapies (₹) COSTS Drug A Drug B Acquisition cost 300 400 Administration 50 Monitoring 50 Adverse effects 100 Subtotal 500 400 OUTPUTS Extra years of life 2.22 1.6 Cost-effectiveness ratio 500/2.2 = ₹ 225 400/1.6 = ₹ 250 Per extra year of life

27. COST-BENEFIT ANALYSIS (CBA) All costs (inputs) and benefits (consequences) of alternatives expressed in monetary terms Results are often expressed as: Ratio of benefit to cost Net cost or benefit = benefit – cost CBA allows uniform comparison of programs or interventions with entirely different outcomes Useful when resources are limited and only one program can be implemented

28. COST-BENEFIT ANALYSIS (CBA) Cost of therapies (₹) COSTS Drug A Drug B Acquisition cost 300 400 Administration 50 Monitoring 50 Adverse effects 100 Subtotal 500 400 BENEFITS (₹) Days at work (₹) 1000 1000 Extra months of life (₹) 2000 3000 Subtotal (₹) 3000 4000 Benefit to cost ratio 3000/500=6:1 4000/400=10:1 Net benefit (₹) 3000-500 =2500 4000-400 =3600

29. Cost-Utility Analysis (CUA) Method to compare treatment alternatives or programs where costs are measured in monetary terms and outcomes is expressed in terms of patient preferences or quality of life CUR = Cost / QALY Least cost preferred Example: Evaluating arthritis treatment Chemotherapy that increases survival but decreases patient well-being

30. Cost-Utility Analysis Cost of therapies (₹) COSTS Drug A Drug B Acquisition cost Administration Monitoring Adverse effects Subtotal UTILITIES Extra years of life (yrs) Quality of life index QALYs Cost-to-utility ratio 300 50 50 100 500 2.22 0.33 0.73 500/0.73=₹ 685 Per extra quality of life year 400 400 1.6 0.41 0.66 400/0.66= ₹ 606 Per extra quality of life year

31. Pharmacoeconomic Methods Cost minimization analysis (CMA) -assumes equal outcomes Cost effectiveness analysis (CEA) -measures outcome in natural or physical units Cost Benefit analysis (CBA) -measures both benefit and cost in monetary terms Cost Utility analysis (CUA) - measures outcomes in QALY

32. Applications Assist in decision making and allocating scarce resources Assessing the value of a new agent Formulary decision making Drug policy decisions, treatment guidelines & Justify the addition of new clinical service Pricing in pharmaceutical industry Decision on reimbursement Third-party; payers use such information to decide whether to pay for a particular treatment, or to determine what price they are willing to pay

33. conclusion Time and money can only be spent once-choice is inevitable Pharmacoeconomics can enhance the quality of practice by strengthening evaluation process and increasing the probability that deliver better value in patient care

34. Thank you