Pharmacoeconomics By M.H.Farjoo M.D. , Ph.D. Shahid Beheshti University of Medical Science
Nov 18, 2014
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
Thank youAny question?
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