Basics of Pharmacoeconomics and Outcomes Research (2)

7/28/2019 Basics of Pharmacoeconomics and Outcomes Research (2)

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Basics ofPharmacoeconomics and

Outcomes Research:Application to Patient Care

Sara Shull PharmD, MBA


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Preview

Economic concepts Data types & sources Types of pharmacoeconomic analyses

Perspective Cost-effectiveness and incremental

analysis Sensitivity analysis

Steps to pharmacoeconomic literatureevaluation Case studies for clinical practice and policy

building


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Opportunity Cost

Time and money as resources canonly be spent once choice isunavoidable.

O.C. is defined as the amount that aresource could earn in its highestvalued alternative use.

How do you invest your time? Why take valuable time to learn

about pharmacoeconomics andoutcomes research?


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How Can PE and Outcomes

Enhance My Practice?

PE is an aid to decision making with strongpotential to:

Mitigate the influence of marketing Puts practitioner in the drivers seat

Help set practice priorities

Enhances position of practitioner from payersperspective Medicare plans to decrease pay-out to stem

tide of budget deficit Private payers actively are developing

quality report cards


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How Can PE and Outcomes

Enhance My Practice?

Statistically more likely to beresponsible for better success in clinical

care by eliminating poor/ unnecessarycare

Ethical framework

Fidelity to individual patients &stewardship to the public good


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Economics is:

The study of how individuals &society end up choosing, with orwithout the use of money, to employ

scarce resources that could havealternative uses, to produce variouscommodities & distribute them for

consumption now, now or in thefuture, among various people andgroups in society. Paul Samuelson


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Pharmacoeconomics and

Outcomes Research

Using data to distinguish yourpractice

Data about efficacy

clinical and humanistic

Data about cost

resources consumed to achieveefficacy endpoints (investment)


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Efficacy Data

Management of efficacy endpointsbased on evidence enables cliniciansto maximize prescribing skills

Evidence-based healthcare is adetermination of the mix of thoseservices, drug products, andprocedures that maximise benefitsand reduce risks.


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Cost Data

Management of resourceconsumption enables patients tomaximize purchasing power-

Individual level- managing insuranceco-payments

Group level- managing insurance

premiums across groups andmaximizing the number of insuredpatients

Govt level- sustaining public programs


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Value Is the Goal of Practice

Minimizing the ratio of cost toefficacy creates value- best return oninvestment

Enhances your ability to deliver asuperior product


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Basic Value of Medical Care

Evidenced by general trends:

Increased use of medical care and prescriptiondrugs

Mortality rates of certain diseases havesignificantly declined

Mean length of hospital stay has also declined

Despite this general evidence, few specific

data regarding the actual costs andbenefits attributed to drugs and medicaltherapies exist


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Objectives

Objectives of pharmacoeconomicsand outcomes research mustoriginate within three dimensions

when considering results and valueof healthcare

Acceptable clinical outcomes

Acceptable humanistic outcomes

Acceptable economic outcomes


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Types of Pharmacoeconomic

Analysis

Methodology Cost measurementunit

Outcome unit

Cost minimization Dollars Various- butequivalent in

comparative groups

Cost benefit Dollars Dollars

Cost effectiveness Dollars Natural units (lifeyears, mg/dl blood

sugar, LDLcholesterol)

Cost utility Dollars Quality adjusted lifeyears


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Common Misconceptions When

Applying Pharmacoeconomic

Principles

Cost-effective care is initially the cheapest alternative

in a manner similar to other investments, least costoption may lead to greater costs downstream

Cost-effective care is outcome that generatesbiggest effect in a manner to similar investments,smaller increments of outcome may be achieved at a

lower overall cost


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Perspective

The point of view considered ineconomic analyses influences theoutcomes and costs considered to be

most relevant: Provider

Patient

Payer

Society


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Comprehensive Definition of

Cost-effectiveness

A therapy is deemed to be a cost-effective strategy when the outcomeis worth the cost relative tocompeting alternatives. In otherwords, scarce resources are utilized

to acquire the best value on themarket.


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Average Cost-effectiveness

Specifies the cost of an agentrequired to achieve each unit ofeffect. No comparison is made to

alternative agents.

Average cost-effectiveness

Cost of drug

Resulting effect = Cost per unit of effectachieved


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Average Cost-effectiveness

Average cost-effectiveness of Agent A

$50.00

50 units of effect = $1.00 per unit

Average cost-effectiveness of Agent B

$150.00

90 units of effect = $1.60 per unit


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Incremental Cost-effectiveness

Analysis

Makes comparisons to othertherapeutic options, standard ofcare, or doing nothing (placebo)

Fundamental ratio

Cost optionB Cost optionA

Effect option

B

Effect option

A

= Cost to achieve one unit of effect


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Incremental Cost Analysis

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Placebo Agent A Agent B

Cost


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Comprehensive Incremental Cost-

effectiveness $150 - $50 $100

90 50 units = 40 units

=

$2.50 per unit of effect achieved

Therefore, because Agent A is an availablealternative with a lower average cost per

unit of effect achieved, the cost-effectiveness of using Agent B isdiminished. The cost of Agent B is not inline with the product it delivers- a poorvalue.


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Grid Representing All Possible

Relationships of Cost to Effect Between

Two Competing Alternatives

Cost of alternative Arelative to alternative

B

Lower Equal HigherEffectivenessalternative Arelative toalternative B

Lower+/-

Tradeoff

--

Dominated

Equal + Arbitrary -

Higher+

Domina

nt

++/-

Trade-off


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Sensitivity Analysis

Conclusions drawn from an economic analysismay change, depending on the uncertainty ofcost and effects considered.

S.A., by altering important variables & then

recalculating results, tests the validity ofconclusions:

Would Agent A still be most cost-effective ifthe effect of Agent B was greater thanmeasured in clinical trial?

Would Agent A still be most cost-effective ifthe monitoring costs of Agent B were actuallylower?

S.A. becomes increasingly important as

assumptions are made to a greater degree.


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Steps to Pharmacoeconomic

Literature Evaluation Evaluate:

The quality of the journal Qualifications of authors Title and abstract- unbiased?

Study methodology Perspective, study design, outcomes and appropriate

alternatives, costs and appropriate discounting,sensitivity analysis, & data sources

Sponsorship- could bias be introduced?

Incremental results What is the conclusion and does it differ between

subgroups? How much does allowance foruncertainty change conclusion?

Vogengerg, FR editor. Introduction to Applied Pharmacoeconomics, 2001


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Cases for Development

Formulary decision making (policy) Appropriate place for eplerenone (Inspra) and spironolactone

(generic) on Inpatient formulary of tertiary care academicmedical center

Clinical decision making for acute therapy

(bedside) Choosing between low molecular weight heparin orunfractionated heparin for the treatment of acute proximaldeep vein thrombosis

Clinical decision making for chronic therapy(bedside)

Choosing between selective cyclooxygenase inhibitor andtraditional non-steroidal anti-inflammatory agent formanagement of osteoarthritis pain

Other suggestions?


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Treatment of Pain Resulting from

Osteoarthritis Pain results in significant disability and resource utilization

affects 15% of US population

results in > 100,000 hospitalizations annually

NSAIDs

effective pain relief

24 30% the cost of Cox-II inhibitors

associated with a significant risk of adverse effects

Dyspeptic symptoms

More serious non-dyspeptic effects- 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


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How should I treat my patient?

NSAIDs are inexpensive compared toCox-II inhibitor:

But wont the more expensive agent pay

for itself many times over by preventingan expensive GI bleed in my patient?

Dyspeptic symptoms are decreased by 15%

Clinically significant ulcer complications arereduced by 50%


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Risk of GI bleed: How Much Can It

Be Altered? 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 bealtered by using a Cox-II inhibitor insteadof an NSAID? What value is really purchased for the extra

cost?

The relative risk reduction of GI complicationswith Cox-II inhibitor catches our eye- butactual risk reduction is small 1-2% for overall ulcer complications 1% for serious hemorrhage and perforation

Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)


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Cost-effectiveness analysis

Population Drug TotalAnnual

Cost

Qualys

Gained

Incrementalcost per

Qualy gained

No Hxof GIulcer

Naproxen $4859 15.2613 -

Cox-IIinhibitor

$16,443 15.3033 $275,809

Hx of GIulcer

Naproxen $14,294 14.7235 -

Cox-IIinhibitor

$19,015 14.8081 $55,803

Spiegel MR et al. Annals Internal Medicine 2003;138:10(795-806)


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Clinical Decision Making

Risk reduction for GI complicationsseen with Cox-II inhibitors is unlikelyto offset their increased cost in the

management of average risk patientswith osteoarthritis pain

With no history of GI bleed, choose

naproxen With history of GI bleed, choose Cox-II

inhibitor


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In all patients with osteoarthritis, thedecision to use Cox-II inhibitorshould be made with awareness of

the effect of the added risk forcardiovascular events on cost-effectiveness

Currently, there is not enoughinformation available, but it may beprudent to avoid these drugs in patientswith cardiovascular history, even in

patients with history of GI bleed


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Treatment of Acute Deep Vein

Thrombosis VTE

> 200,00 new cases reported annually in US Mortality attributed to PE 100 200,000 deaths annually

Unfractionated heparin

Effective for treating VTE Daily cost for IV therapy is low Requires close monitoring of clotting time/ dose titration

and, therefore, hospitalization

Low molecular weight heparin

Effective for treating VTE Daily cost for SQ therapy is high Routine clotting time monitoring not required unless

obese or manifestations of renal compromise present Early discharge or outpatient treatment for VTE is

possible


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How Should I Treat My Patient?

Unfractionated heparin is a lessexpensive option compared to lowmolecular weight heparin.

But wont the more expensive agent payfor itself by bypassing routinecoagulation monitoring?

Also, cant I lower the risk of nosocomial

infection and error by sending mypatient home after establishing lowmolecular weight therapy?


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Cost-effectiveness Analysis

Treatmentsetting Drug

Total

costs ofcourse oftherapy

QualysGained

Incremen

tal costper Qualygained

Both agentsadmin ininpatientsetting

Unfractionated heparin $26,361 7.978 -

Lowmolecularweightheparin

$26,516 7.998 $7,750

Lowmolecular

weightheparinprimarilyadmin inoutpatientsetting

Unfractionated heparin $26,361 7.978 -

Lowmolecular

weightheparin

$25,559 7.998Cost-saving

Gould MK et al. Annals Internal Medicine 1999;130(10):789-799


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Decreased monitoring costs with lowmolecular weight heparins and theattenuated risk of future complications

with these agents do result in cost-effective care.

The higher acquisition cost is justified.

Treating the patient on outpatient basis

creates best value. Better outcomes are achieved at a lower

overall cost- the best possible situation.

Gould MK et al. Annals Internal Medicine 1999;130(10):789-799


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For patients that can receive in-hometreatment and support, establish lowmolecular weight heparin therapy on first

day of hospitalization, then send thepatient home. (analysis includes cost ofhome health visits)

For patients that must remain

hospitalized, low molecular heparin shouldbe selected before unfractionated heparinas therapy for treatment of VTE.


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Drug Selection for Inpatient

Formulary Addition

Congestive heart failure

Afflicts > 4.6 million people in US

Disease and cost burden rapidly

increasing

Primary reason for hospitalization in US

Length of stay & readmission significant

cost drivers High mortality rate


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Formulary Considerations

Two agents are effective & safe inreducing the risk of death andhospitalization of heart failure patients.

Spironolactone (available on Inpt formulary) Daily cost is 50-90% lower than eplerenone

Gynecomastia/ breast pain occurs in 10% of males

Eplerenone (considered for formulary addition)

More specific mechanism of action

Lower incidence of gynecomastia, but greaterincidence of hyperkalemia requiring hospitalization

C f C


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Indirect Comparison of Clinical Trial

Results

Variable Spironolactone Eplerenone

Relative risk of

death due toheart failure 75.2% 86.2%

Per patient costof drug (36

months)

$50.28 $1,230.00

Cost of drug perdeath prevented

$440.00 $53,000.00

Pitt B et al. The New England Journal Medicine 1999;341(10):709-717

Pitt B et al. The New England Journal Medicine 2003;348(14):1309-1321


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Policy Decision Making

Eplerenone is not cost-effective acrossentire heart failure population

However, length of stay and readmission

rates increase as severity of heart failureincreases

Stratification of eplerenone efficacyindicates mortality and hospitalization

rates fall more dramatically when heartfunction is more compromised (ejectionfraction < 40%)


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Policy Decision Making

Extra cost of eplerenone may be justifiedin sicker patients or in patients thatcannot tolerate cheaper spironolactonedue to gynecomastia/ breast pain

Add eplerenone to Inpatient formulary butlimit use within these two patientpopulations only Ejection fraction < 40% Cannot tolerate or fails spironolactone

Eplerenone is not allowed for treatment ofhypertension (despite FDA indication) asmany effective, safe alternatives areavailable at significantly lower cost.


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Conclusion

Time and money can only be spent once-choice is inevitable. Whether doneunconsciously or with a consistent

process, health care professionals areconstantly evaluating patient care choices& acting on them.

Pharmacoeconomics and outcomes

research can enhance the quality of yourpractice by strengthening your evaluationprocess and increasing the probability thatyou deliver better value in patient care.

Basics of Pharmacoeconomics and Outcomes Research (2)

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