Pharmacoeconomics.pdf

8/17/2019 Pharmacoeconomics.pdf

1/41

PHARMACOECONOMICS (PE)PHARMACOECONOMICS (PE)

(THEORY AND PRACTICE)(THEORY AND PRACTICE)

Ms.PratibhaMs.Pratibha

Guide:Guide:

Dr.U.P.RathnakarDr.U.P.Rathnakar MD.DIH.PGDHMMD.DIH.PGDHM


2/41

ROAD MAPROAD MAP IntroductionIntroduction

HistoryHistory

DefinitionDefinition ConceptConcept

Cost and outcomesCost and outcomes

Evaluation methodsEvaluation methods ApplicationsApplications

Conduct of PE evaluationConduct of PE evaluation

ConclusionConclusion


3/41

INTRODUCTIONINTRODUCTION

Resources are always scarce.Resources are always scarce.

Challenge to provideChallenge to provide-- quality medical care with minimumquality medical care with minimum

resources.resources.

Balance betweenBalance between-- economic,economic,

-- humanistic andhumanistic and

-- clinical outcome.clinical outcome.


4/41

HISTORYHISTORY Health economic is a branch of economicsHealth economic is a branch of economics Mid 1960sMid 1960s – – few systemic reference to itfew systemic reference to it

can be foundcan be found

In 1973In 1973 – – the first book on this subject wasthe first book on this subject waspublishedpublished

The first time the PE was used in public forumThe first time the PE was used in public forum --in1986,in1986,

At a meeting of Pharmacists in Toronto.At a meeting of Pharmacists in Toronto. When Ray Townsend, from the UpjohnWhen Ray Townsend, from the Upjohn

Company, used the term in a presentationCompany, used the term in a presentation


5/41

DEFINITIONDEFINITION

ECONOMICS:ECONOMICS:

-- Is the study of how society decidesIs the study of how society decides whatwhat

gets produced,gets produced, how how and forand for whom whom ..


6/41

HEALTH ECONOMICS:HEALTH ECONOMICS:

Branch of economicsBranch of economics

-- Study ofStudy of

-- How scarce resources are allocated forHow scarce resources are allocated for

the health carethe health care-- For the maintenance andFor the maintenance and

impprovementimpprovement of health among peopleof health among people


7/41

PHARMACOECONOMIC:PHARMACOECONOMIC:

Subdivision of health economicSubdivision of health economic

-- Process ofProcess of

-- IdentificationIdentification

-- Measuring and comparing the costMeasuring and comparing the costand outcome of health careand outcome of health care

programmeprogramme


8/41

CONCEPTCONCEPT

Provides a basis forProvides a basis for

-- resource allocation and utilizationresource allocation and utilization Nowadays in India primary care providers areNowadays in India primary care providers are

-- bombarded with various new drugsbombarded with various new drugs

usually of the same familyusually of the same family

-- having properties similar to thehaving properties similar to the

available (older) drugavailable (older) drug

Cont………Cont………


9/41

Cont…..Cont…..

Before prescribing any new drug therapy twoBefore prescribing any new drug therapy two

question must be importantquestion must be important1. Whether the new drug is equally or1. Whether the new drug is equally or

more efficacious in the said diseasemore efficacious in the said disease

as compare to the standardas compare to the standardtreatment?treatment?

2. Does the new drug have any2. Does the new drug have anypharmacoeconomic advantage over thepharmacoeconomic advantage over the

existing drugs?existing drugs?


10/41

PharmacoeconomicsPharmacoeconomics

OutcomeOutcome CostCost


11/41

MEASURES COST AND OUTCOMESMEASURES COST AND OUTCOMES

Determines which alternative gives bestDetermines which alternative gives best

outcome for the resource invested.outcome for the resource invested.

Alternative which gives optimum outcome to theAlternative which gives optimum outcome to therupee spent.rupee spent.


12/41

COST?COST?

Not same as priceNot same as price

Involves all the resources that are used toInvolves all the resources that are used to

-- produce and deliver a particular drugproduce and deliver a particular drug

therapytherapy

Cont……Cont……


13/41


COSTCOST

Direct Non medical Intangible OpportunityDirect Non medical Intangible OpportunityMedicalMedical

Direct IndirectDirect Indirect


14/41

DIRECT MEDICAL:DIRECT MEDICAL:-- Cost related to diseaseCost related to disease

Eg: Drugs, lab test, hospitalizationEg: Drugs, lab test, hospitalization

DIRECT NON MEDICAL:DIRECT NON MEDICAL:

-- Cost related to illness but not related toCost related to illness but not related to

purchasing health care services.purchasing health care services.

Eg: spent on transportation, hiring of aEg: spent on transportation, hiring of aroom near treatment centerroom near treatment center


15/41

INDIRECT NON MEDICAL:INDIRECT NON MEDICAL:

-- Cost of reduced productivityCost of reduced productivity

INTANGIBLE:INTANGIBLE:-- Cost incurred due to diseaseCost incurred due to disease

-- Which cannot be measured in rupeeWhich cannot be measured in rupeetermsterms

EgEg: pain, suffering: pain, suffering


16/41

OPPORTUNITY COSTS:OPPORTUNITY COSTS:

-- When taking certain course of actionWhen taking certain course of actionopportunity & cost is lost to use theopportunity & cost is lost to use the

next best alternative therapynext best alternative therapy


17/41

OUTCOMESOUTCOMES

Outcomes (consequence)Outcomes (consequence)

Clinical HumanisticClinical Humanistic

(efficacy of (QOL, patient(efficacy of (QOL, patient

treatment) satisfaction)treatment) satisfaction)


18/41

EVALUATION METHODSEVALUATION METHODS

CostCost minimizitionminimizition analysis [CMA]analysis [CMA]

Cost benefit analysis [CBA]Cost benefit analysis [CBA]Cost effectiveness analysis [CEA]Cost effectiveness analysis [CEA]

Cost utility analysis [CUA]Cost utility analysis [CUA]


19/41

CostCost--minimization Analysisminimization Analysis

Simplest of theSimplest of the pharmacoeconomicspharmacoeconomics tooltool

Comparing two drugs of equal efficacy andComparing two drugs of equal efficacy and

equal tolerabilityequal tolerability Therapeutic equivalence must beTherapeutic equivalence must be

established between 2 procedures to beestablished between 2 procedures to be

comparedcompared

Now no need to compare efficacy orNow no need to compare efficacy or

outcomeoutcome Simple comparison of costSimple comparison of cost


20/41

COST MINIMIZATION ANALYSISCOST MINIMIZATION ANALYSIS

-- -- EgEg::

Comparing two dosage forms of intravenousComparing two dosage forms of intravenous

clindamycinclindamycin for prevention of postoperativefor prevention of postoperativeinfectioninfection

Patient undergoing surgery for gangrenousPatient undergoing surgery for gangrenous

appendicitisappendicitis-- ClindamycinClindamycin 900mg every 8 hour900mg every 8 hour OROR

ClindamycinClindamycin 600mg every 6 hour600mg every 6 hour

-- Both showed equalBoth showed equal-- efficacyefficacy

-- safetysafety

-- pharmacokineticspharmacokinetics


21/41

COST BENEFIT ANALYSIS (CBA)COST BENEFIT ANALYSIS (CBA)

Both cost and benefits of variousBoth cost and benefits of various

alternatives are reduced to monetary termsalternatives are reduced to monetary terms Used to evaluate the desirability of a givenUsed to evaluate the desirability of a given

intervention in marketsintervention in markets

InterventionIntervention vsvs status quostatus quo


22/41

CBA….CBA….

Expressed as ratioExpressed as ratio – – B/C ratioB/C ratio-- B/C ratio >1,B/C ratio >1, ProgrammeProgramme or treatment isor treatment is

of valueof value

-- B/C ratio = 1, Benefit and cost equalB/C ratio = 1, Benefit and cost equal

-- B/C ratio < 1,B/C ratio < 1, ProgrammeProgramme is notis not

beneficialbeneficial


23/41

COST EFFECTIVE ANALYSIS (CEA)COST EFFECTIVE ANALYSIS (CEA) Ratio of cost of a treatment alternative andRatio of cost of a treatment alternative and

clinical outcome is compared to anotherclinical outcome is compared to anotheralternativealternative

Outcomes is not expressedOutcomes is not expressed-- in monetary termsin monetary terms

-- but in unitsbut in units -- (non rupee units)(non rupee units)


24/41

CEA…..CEA…..

EgEg::

-- 44 StatinsStatins comparedcompared FluvastatinFluvastatin

LovastatinLovastatin,, SimvastatinSimvastatin,, PravastatinPravastatin-- Outcome: rate of success in achieving the LDLOutcome: rate of success in achieving the LDL

goal of therapygoal of therapy

-- Cost: drug cost, physician cost, lab costCost: drug cost, physician cost, lab cost

-- FluvastatinFluvastatin lowest CEA ratio for LDL reductionlowest CEA ratio for LDL reduction

of 25% or lessof 25% or less


25/41

CEACEA--ACEAACEA 1. Average cost effective analysis[ACEA]:1. Average cost effective analysis[ACEA]:

CCost in rupee of option ‘A’ / clinical outcomeost in rupee of option ‘A’ / clinical outcome

-- when this ratio is compared to anotherwhen this ratio is compared to anotheroption ‘B’option ‘B’

-- one with least ACER is selectedone with least ACER is selected


26/41

CEACEA--ICEAICEA 2. Incremental cost effective analysis:2. Incremental cost effective analysis:

This helps to know theThis helps to know the

-- increase in cost to get better outcomeincrease in cost to get better outcomebetween two optionsbetween two options


27/41

COST UTILITY ANALYSIS (CUA)COST UTILITY ANALYSIS (CUA)

Drugs/intervention with different outcomes areDrugs/intervention with different outcomes are

comparedcompared Outcomes measured in ‘utility units’ ,Outcomes measured in ‘utility units’ ,

i.e. Quality Adjusted Life Years (QALY)i.e. Quality Adjusted Life Years (QALY)

EgEg::OndansetronOndansetron VsVs MetoclopramideMetoclopramide inin

patient receiving high dosepatient receiving high dose CisplatinCisplatin

therapytherapyCont……Cont……


28/41

CUA …..CUA …..

Cost: direct cost of the drug,Cost: direct cost of the drug,material,material, labourlabour

Clinical outcome: counting emesisClinical outcome: counting emesis

episode in 24 hours afterepisode in 24 hours afterantiemetic andantiemetic and extrapyramidalextrapyramidal

reaction afterreaction after metoclopramidemetoclopramide


29/41

CUA….CUA…. Example, intervention AExample, intervention A Allows a patient to live for 3 additional yearsAllows a patient to live for 3 additional years Than if no intervention had taken place, butThan if no intervention had taken place, but

only with a quality of life weight of 0.6,only with a quality of life weight of 0.6, Then the intervention confers 3 * 0.6 =Then the intervention confers 3 * 0.6 = 1.81.8

QALYs to the patient [A]QALYs to the patient [A]

If intervention B confers 2 extra years of lifeIf intervention B confers 2 extra years of lifeat a quality of life weight of 0.75,at a quality of life weight of 0.75, Then it confers an additionalThen it confers an additional 1.5 QALYs to1.5 QALYs to

the patient. [B]the patient. [B]

The net benefit of intervention A overThe net benefit of intervention A overintervention B is therefore 1.8intervention B is therefore 1.8 -- 1.5 = 0.31.5 = 0.3QALYs.QALYs.


30/41

QualityQuality--adjusted life years, or QALYs,adjusted life years, or QALYs,

Is a way of measuring disease burden,Is a way of measuring disease burden, Including both the quality and the quantity ofIncluding both the quality and the quantity of

life livedlife lived

As a means of quantifying in benefit of aAs a means of quantifying in benefit of amedical intervention.medical intervention.

Based on the number of years of life thatBased on the number of years of life that

would be added by the intervention.would be added by the intervention. Each year in perfect health is assigned theEach year in perfect health is assigned the

value of 1.0 down to a value of 0 for death.value of 1.0 down to a value of 0 for death.

I If the extra years would not be lived in fullI If the extra years would not be lived in fullhealthhealth --the extra lifethe extra life--years are given a valueyears are given a valuebetween 0 and 1 to account for this.between 0 and 1 to account for this.


31/41

Methodology Cost measurement units Outcome measurementunits

CMA Rupees or monetary units Assumed to be equivalent

CEA Rupees or monetary units Natural units[Bp, blood

sugar, life years]

CBA Rupees or monetary units Rupees or monetary units

CUA Rupees or monetary units QALY or other utilities


32/41

Application ofApplication of PharmacoeconomicsPharmacoeconomics::

1. Pricing of a new drug1. Pricing of a new drug

2. Re2. Re--pricing of an old drugpricing of an old drug3. Generation of a data for promotional3. Generation of a data for promotional

materialmaterial

4. Legislative requirement for drug4. Legislative requirement for druglicensing and medical reimbursementlicensing and medical reimbursement

5. Justify clinical pharmacy evaluation5. Justify clinical pharmacy evaluation



33/41

Use …..Use …..

6. Used to justify use of pharmacy6. Used to justify use of pharmacy

products and pharmaceutical careproducts and pharmaceutical care7. Principle of Pharmacoeconomic also7. Principle of Pharmacoeconomic also

influences health care decision makinginfluences health care decision making

and individual patient careand individual patient care

8. Earlier clinical decisions were solely8. Earlier clinical decisions were solely

based on outcomes. Now cost, outcome,based on outcomes. Now cost, outcome,humanistic outcome are also consideredhumanistic outcome are also considered


34/41

Conduct ofConduct of pharmacoeconomicpharmacoeconomic evaluation:evaluation:

1. Define the problem1. Define the problem2.2. AssembeAssembe the study teamthe study team

3. Identify treatment alternative3. Identify treatment alternative

4. Decide on correct4. Decide on correct pharmacoeconomicpharmacoeconomic

methodmethod

5. Decide monetary value of clinical5. Decide monetary value of clinicaloutcomeoutcome

6. Make analysis6. Make analysis

7. Present result7. Present result8. Implement8. Implement


35/41

Eg: Pain from osteoarthritisEg: Pain from osteoarthritis

Pain results in significant disability and resourcePain results in significant disability and resourceutilizationutilization

NSAIDsNSAIDs

-- effective pain reliefeffective pain relief

-- Less expensive than CoxLess expensive than Cox--II inhibitorII inhibitor

-- associated with a significant risk of adverseassociated with a significant risk of adverseeffectseffects

-- Dyspeptic symptomsDyspeptic symptoms

-- More serious nonMore serious non--dyspeptic effectsdyspeptic effects--symptomatic ulcers, ulcer hemorrhage,symptomatic ulcers, ulcer hemorrhage,ulcer perforationulcer perforation


36/41

CoxCox-- II inhibitorsII inhibitors

-- effective pain reliefeffective pain relief-- substantially more expensive than Coxsubstantially more expensive than Cox--11

inhibitorsinhibitors

-- associated with lower risk of GI side effectsassociated with lower risk of GI side effects


37/41

NSAIDs are inexpensive compared to CoxNSAIDs are inexpensive compared to Cox--IIII

inhibitor:inhibitor:-- But won’t the more expensive agent pay forBut won’t the more expensive agent pay for

itself many times over by preventing anitself many times over by preventing an

expensive GI bleed?expensive GI bleed?-- Dyspeptic symptoms are decreased byDyspeptic symptoms are decreased by

15%15%

-- Clinically significant ulcer complications areClinically significant ulcer complications arereduced by 50%reduced by 50%


38/41

Risk reduction for GI complications seen withRisk reduction for GI complications seen with

CoxCox--II inhibitors is unlikely to offset theirII inhibitors is unlikely to offset theirincreased cost in the management of averageincreased cost in the management of averagerisk patients with osteoarthritis painrisk patients with osteoarthritis pain

-- With no history of GI bleed, choose naproxenWith no history of GI bleed, choose naproxen-- With history of GI bleed, choose CoxWith history of GI bleed, choose Cox--IIII

inhibitorinhibitor


39/41

CONCLUSIONCONCLUSION Is a young science, which is still testing itsIs a young science, which is still testing its

methodology.methodology.

The science will improve with application andThe science will improve with application andvalue of the analysis to cliniciansvalue of the analysis to clinicians Principle and methods balances the cost andPrinciple and methods balances the cost and

outcomes and provides the best possible healthoutcomes and provides the best possible health

care to the with available resources.care to the with available resources. Time and money can only be spent onceTime and money can only be spent once-- choicechoice

is inevitable. Whether done unconsciously oris inevitable. Whether done unconsciously orwith a consistent process, health carewith a consistent process, health careprofessionals are constantly evaluating patientprofessionals are constantly evaluating patientcare choices & acting on them.care choices & acting on them.


40/41

REFERENCEREFERENCE

Avery’s text book, author,Avery’s text book, author, publishers,citypublishers,city, year,, year,

PagePage The national medical journal of IndiaThe national medical journal of India

vol.17:no.2:2004vol.17:no.2:2004

Essentials of PE, By: Karen L.Essentials of PE, By: Karen L. RascatiRascati,, LippincotLippincotWilliams andWilliams and WiWi

CostCost--Effectiveness Analysis: Methods andEffectiveness Analysis: Methods and

ApplicationsApplications byby Henry M. LevinHenry M. Levin,, Patrick J.Patrick J.McEwanMcEwan,, Patrick J.Patrick J. McEwanMcEwan


41/41

Pharmacoeconomics.pdf

Documents

Transcript of Pharmacoeconomics.pdf