Budget Impact

Question 1

Economic Considerations

Answer 1

FDA approved drugs: economic eval (CEA, CUA, etc.), budget impact (health system), financial models (drug costs)
-Yet to be approved drugs

Question 2

Budget Impact Models

Answer 2

• Measure of resource use
• Do NOT consider HRQoL
• Time Frame/Perspective: HCDM is recommended, typically time frame is 1-5 years
• Population: target population for a budget impact model

Question 3

Considerations for Budget Impact Models

Answer 3

1. Characteristics of a health system, like prevalence and incidence
2. Use and cost of current mix of therapies used to treat the condition
3. Projected use and costs of the new mix of therapies to treat the condition
4. Costs and cost offsets associated with change in use of condition-specific health services

Question 4

Budget Impact Models Components

Answer 4

1. Should include all aspects of health care system
2. Main focus is looking at clinical-related outcomes, not patient outcomes. Can include analyses related to QALYs but payers will want to focus on resource-related outcomes
3. Should consider realistic estimates of drug uptake
4. Will need to include sensitivity analyses for key assumptions

Question 5

Budget Impact Analyses Steps

Answer 5

1. Health plan demographics, disease epidemiology
2. Medication cost for treatment
3. Reduction in other treatments?
4. Reduce use of other costly utilization?
5. Add up costs and savings
6. Sensitivity Analyses

Question 6

BIA Step 1

Answer 6

members * % with condition * % being treated

Question 7

BIA Step 2

Answer 7

• Daily/Monthly Treatment Costs
• Average length of treatment
• # members * cost * duration * adherence

Question 8

BIA Step 3

Answer 8

• Will new medication reduce the need for other drugs

- Potential savings

Question 9

BIA Step 4

Answer 9

• Reduction of doctor/ER visits, hospitalizations
• # members * difference in % * Cost
• Potential savings

Question 10

BIA Step 5

Answer 10

• Add up costs and savings
• Subtract savings from costs
• Divide total cost by total number of members for cost per year
• Divide cost per year by 12 months to get costs per month

Question 11

BIA Step 6

Answer 11

• Sensitivity analyses that consider PMPM
• Vary all estimates in model: treated population, medication costs, avoided AE
• Ultimately up to P&T committee to decide if the medication is worth it by using management strategies