Post on 09-Jul-2015
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BASICS OF
PHARMACOECONOMICS
By Dr Ketan Asawalle
JR1,Dept. of Pharmacology
SVNGMC Yavatmal
SCOPE OF
PRESENTATION
1. Introduction
2. Brief History
3. Challenges
4. Pharmacoeconomic Evaluation
5. Methods for Evaluation
SCOPE OF
PRESENTATION
6. Assessment of Results
SCOPE OF
PRESENTATION
7. Limitations of Evaluation
8. Summary
HISTORY
• Economic evaluations in the field of pharmacology started about 30 years ago
Crude parameters were used to evaluate e.g. increased labour production
• The term PHARMACOECONOMICS was used on a public forum for the first time in
INTRODUCTION
• Who Pays for medical bills ?
1.Government
2. Insurance Companies
This NEVER
Happens
This ALWAYS happens
Health care Funders try to make efforts to contain drug costs
By
• Price negotiations
• Patient co-payments
• Dedicated Drug Bills
WHAT IS A DRUG
BILL?
which states the various policies of that government that it has made for health care improvement in the country
percentage of GDP that particular country has allotted for
Generally the health care bill is 10 to 15% of total GDP
In 2013, Indian health care budget was 1.04% of the GDP
In 2014 it is proposed to touch 2.5%
Health Care Funders have to keenly study all these aspects in order to achieve their
SAVE AS MUCH MONEY AS POSSIBLE ALONG WITH PROVIDING ADEQUATE HEALTH CARE
The VERY FIRST aspect of controlling drug costs is
EVALUATION OF EXPENDITURE OF DRUG THERAPY
REASONS for EVALUATION
Size of drug bill
Easy to measure pharmaceutical costs
Evidence of wasteful prescribing
Perception that drug companies work for profits
DEFINITION
PHARMACOECONOMICS
effectiveness, cost-minimization, cost-of-illness and cost
Pharmacoeconomics adopts and applies the principles and methodology of HEALTH ECONOMICS
Pharmacoeconomic evaluation therefore makes use of the broad range of techniques used in health economics evaluation to the s
Pharmacoeconomics is the description and analysis of the costs of drug therapy
BASIC USES
• Make formulary decisions
• Design disease management programs
• Measuring the cost- effectiveness of interventions and programs
NEED FOR
PHARMACOECONOMICS
GOVERNMENT
Determining programme benefits and prices paid
INDUSTRY
Deciding among specific research and development alternatives
PRIVATE SECTOR
Determining the insurance benefit
COMMON MAN
Rising health expenditures have led to the necessity to find the optimal therapy at the lowest price
Pharmaceutical expenditure has increased dramatically
Numerous alternatives for the same disease/condition
Increasing costs of health care products
IMPORTANT
TERMS
PRO i.e. PATIENT REPORTED OUTCOME
HRQL i.e. HEALTH RELATED QUALITY OF LIFE
QALY i.e. QUALITY ADJUSTED LIFE YEARS
PATIENT REPORTED OUTCOME (PRO)
Measured by self-reported questioners
patients own viewpoint about the new product in question
HEALTH RELATED QUALITY OF LIFE
related quality of life" (HRQL) is an individual's satisfaction or happiness with domains of life
variables within the dimension of health (e.g., a disease or its treatment) relate to
disease burden, including both the quality and the quantity of life lived
The quality-adjusted life year QALY
Based on the number of years of life that would be added by the
CHALLENGES
Training and education in ANALYSIS of DATA
Standardizing the methods and establishing GUIDELINES for practice
CONTINUED EDUCATION on relevant features
Stable FUNDS
PHARMACO-ECONOMIC
EVALUATION
ISSUES
INPUT
COSTS PERSPECTIVES
HEALTH CARE
OUTCOME
PERSPECTIVE
Gives the information about from whose point of view the evaluation is considered
1. Health Service Perspective
Two Types
2. Societal Perspective
Generally the societal perspective is considered but the health mangers facing problem of low budget concentrates on health s
Health service perspective contains direct cost
Societal perspective contains indirect cost
COSTS
Two main types
is the benefit foregone when selecting one therapy alternative over the next best alternative
Financial costs=Mandatory costs
Economic costs=Non mandatory costs
MEASUREMENT OF COST
1.cost/unit (cost/tablet, cost/vail)
2.cost/treatment
3.cost/person
4.cost/person/year
5.cost/case prevented
6.cost/life saved
7.cost/DALY
OUTCOME
What is the effect of alternative drug therapies on disease progression, survival, quality of life?
POSITIVE and NEGATIVE outcomes are to be considered
Positive outcomes = Drug Efficacy
Negative outcomes = Side Effects, Treatment failure and Drug Resistance
METHODS OF
PHARMACO-ECONOMIC
EVALUATION
COST-MINIMIZATION
ANALYSIS
• Measures only costs
• Mainly of Health Services
• Applicable only when outcomes are identical and need not be considered separately
EXAMPLE
Comparing prescriptions containing generic drug and leading branded drug
Amoxicillin-clavulenic acid and Augmentin™
The purpose is to project the least costly drug or treatment modality
Reflects cost of preparing and administering a drug
COST-EFFECTIVENESS
ANALYSIS
It refer to a particular type of evaluation, in which the health benefit can be defined and measured in natural units (e.g. years of life saved, ulcers healed) and the
Compares the relative costs and outcomes (effects) of two or more courses of action
Assigns a monetary value to the measure of effect
CEA is
Cost associated with health measureGain of health from a measure
Compares therapies with qualitatively similar outcomes in a particular therapeutic area
QALY is the most common outcome measure
In severe reflux oesophagitis, we could consider the costs per patient relieved of symptoms using a
EXAMPLE
COST-UTILITY
ANALYSIS
Similar to Cost-effectiveness analysis
Costs are measured in Money
Outcome is Defined
Outcome is a Unit of Utility e.g. QALY
End point of disease is not directly dependent in disease state
Can look into more than one area of medicine
Cost per QALY of coronary artery bypass grafting versus cost per QAL Y for erythropoietin in renal disease
EXAMPLE
difficult than measuring the monetary value of life through health improvements
This is because in CUA you need to measure the health improvement effects for every remaining year of life
DRAWBACK
COST-BENEFIT
ANALYSIS
The benefit is measured as the associated economic benefit
E.g. monetary value of returning a worker to employment earlier
Both costs and benefits are expressed in money
Allows comparisons to be made between very different areas, and not just medical
(benefits of improved education and hence productivity) compared to establishing a back pain service
but very important benefits not measurable in money terms, e.g. relief of anxiety
CBA may also seem to discriminate against those in whom a return to productive employment is unlikely
DRAWBACKS
SUMMARY
RESULTS OF
EVALUATION
FOUR POSSIBILITIES
New treatment is
More effective and more expensive
More effective less expensive
Less effective less expensive
Less effective more expensive
RESULTS OF ECONOMIC EVALUATION
I
IIIII
IV
This would be the case in which only TWO treatment regimens or drugs are considered
But what if multiple regimens are considered at once
Beta Slope
MARKOV’S POPULATION TREE FOR DECISION ANALYSIS
OTHER METHODS OF DECISION MAKING
AMOUNT NEEDED TO TREAT/NUMBER NEEDE TO TREAT
LIMITATIONS
BIAS
• Choice of comparator drug
• The assumptions made
• Selective reporting of results
WHY IS THIS BIAS?
less well understood by doctors and others, bias needs to be minimised
Doctors may tend to equate health economics with rationing or cost cutting, and therefore may reject the whole process as
MAIN PROBLEMS
• A short term outlook
• Many budgets operate in isolation, and it is not easy to move money between them
• A new intervention may simply not be affordable no matter how cost effective it might be
• Young sciences
• Need of proper guidelines
THANK YOU
REFERENCES
1. A Practical Guide To Clinical Audit, Quality and Patient Safety(QPSD-D-029-1 V.1)
2 Pharmacoeconomics: basic concepts and terminology T. Walley & A. Haycox (Department of Pharmacology and Therapeutics, Univers
3. Pharmacoeconomics and Economic Evaluation of Drug Therapies Tom Walley, M.D. (Professor of Clinical Pharmacology Departmen
4. PHARMACOECONOMICS: A REVIEW SURENDRA G. GATTANI, Department of Pharmaceutics, R.C.Patel college of Pharmacy, Karwand naka, Sh
ABASAHEB B. PATIL, Lecturer Department of Pharmaceutics , R.C.P.E.R. Malegaon,
SACHIN S. KUSHARE, Department of Pharmaceutics R.C.Patel college of Pharmacy, Shirpur
5. THE THEORY OF COST-BENEFIT ANALYSIS JEAN DREZE AND NICHOLAS STERN (London School of Economics)
6. DRUG UTILIZATION AND THERAPEUTIC AUDIT, British journal of clinical pharmacology (1980), 9, 227