Pharmacoeconomics

By

M.H.Farjoo M.D. , Ph.D.Shahid Beheshti University of Medical Science

R&D Costs

Sales Revenue

Approval

What is PharmacoEconomics?

Inputs

Costs

Health Care

Outcomes

Objectives

Objectives of pharmacoeconomics originate within three dimensions: Acceptable clinical outcomes Acceptable humanistic outcomes Acceptable economic outcomes

Pharmacoeconomics (PE)

Compares the costs and consequences (outcomes) of drug therapies and medical interventions

efficient allocation of limited resources among competing alternative medications and services

Costs

Cost is NOT the same as price. Cost involves all the resources that are used to

produce and deliver a particular drug therapy. in general physicians and pharmacists do not

have complete information about the costs of drugs.

often they really have no idea how much drugs cost.

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

Description of Costs

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)

Outcomes

Both positive and negative outcomes should be addressed

Positive outcomes: drug’s efficacy measure

Negative outcomes: ADR and treatment failure

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 Most studies are conducted only from the

perspective of the provider or payer and omit the costs to patients.

Pharmacoeconomic Methods

Cost-minimization analysis (the simplest) Assumes equal outcomes

Cost-effectiveness analysis (the most common) Costs in monetary terms to some unit of effectiveness

or clinical outcome Cost-utility analysis (when ADR is severe)

Measures outcomes in QALYs

Cost-benefit analysis (difficult, controversial) Measures both benefits and costs in $

Cost-Effectiveness Analysis

Used to evaluate cost and outcome of therapy A therapy is a cost-effective strategy when the

outcome is worth the cost relative to competing alternatives.

Results expressed as cost-effectiveness ratio cost/treatment cost/outcome cost/life saved

Cost-Effective

Cost-Effective is NOT the least expensive it may be: Less expensive and at least as effective More expensive and more effective

If the extra benefit is worth the additional cost

Less expensive and less effective If the extra benefit by competing therapy is not worth

the extra cost

Decision Making

Higher Cost Lower Cost

HigherEffectiveness ? Yes

LowerEffectiveness No ?

Conclusions

Time and money can only be spent once and choice is inevitable.

Pharmacoeconomics can guide choices among alternative treatments based on the costs and outcomes.

Pharmacoeconomics research increases the probability that you deliver better value in patient care.

Results of pharmacoeconomic studies are influenced by the perspective of the study

there is no one “right” answer.

Osteoarthritis Pain NSAIDs

effective pain relief 24 – 30% the cost of Cox-II inhibitors associated with a significant risk of adverse effects

Dyspeptic symptoms symptomatic ulcers, ulcer hemorrhage, ulcer perforation

Cox- II inhibitors effective pain relief substantially more expensive than NSAIDs associated with lower risk of GI side effects

Osteoarthritis Pain

NSAIDs are inexpensive compared to Cox-II inhibitor.

Cox-II inhibitors: Prevent an expensive GI bleeding Dyspeptic symptoms decreased by 15% significant ulcer complications reduced by 50%

Osteoarthritis Pain

Not all osteoarthritis patients have an equal risk of developing a GI bleed

Is paying extra for GI protection justified in all patients? How much can the risk of GI bleed be altered by using

a Cox-II inhibitor? The relative risk reduction of GI complications with

Cox-II inhibitor catches our eye but actual risk reduction is small: 1-2% for overall ulcer complications 1% for serious hemorrhage and perforation

ICA is the difference in total costs of 2 therapies divided by difference in effectiveness of the 2 therapiesTherapy A: costs $2500 and saves 10 lives

C/E ratio= $250/life savedTherapy B: costs $5000 and saves 15 lives

C/E ratio= $333/life savedICA: $5000-$2500 or $500/life saved 15-10

Cost-effectiveness analysis

Population DrugTotal

AnnualCost

QualityGained

Incremental cost per Quality gained

No Dx of GI ulcer

Naproxen $4859 15.2613 -

Cox-II inhibitor

$16,443 15.3033 $275,809

Dx of GI ulcer

Naproxen $14,294 14.7235 -

Cox-II inhibitor

$19,015 14.8081 $55,803

Difference of Total AnnualCost divided by difference of quality gained:16,443 – 4,859 = 11,58415.3033 – 15.2613 = 0.04211,584 / 0.042 = 275,809

Cardiovascular Effect of Cox-II Inhibitors

• How do cardiovascular problems affect my choice of using Cox-II inhibitors or NSAIDs?

Population DrugAnnual

CostQualityGained

Incremental cost per Quality gained

All patients

Naproxen $5,037 15.2539 -

Cox-II $16,620 15.2832 $395,324

Osteoarthritis Pain

Risk reduction for GI complications seen with Cox-II inhibitors is unlikely to offset their increased cost. With no history of GI bleed, choose naproxen With history of GI bleed, choose Cox-II inhibitor

it may be prudent to avoid COX II inhibitors in patients with cardiovascular history, even in patients with history of GI bleed

SummaryIn English

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