Economics of Drug Prescribing and Bioequivalence

Question 1

What is pharmaeconomics?

Answer 1

Pharmacoeconomics is a study that identifies, measures and compares the costs (resources consumed) and consequences (clinical, economic and humanistic) of pharmaceutical products and services.

Question 2

Mention 3 examples of resources (costs) considered in pharmacoeconomics.

Answer 2

i. Medical costs
* consulations
* medicines
* diagnostics/tests
* other medical supplies

ii. Loss of productivity

iii. Intangible costds

Question 3

Mention 5 methodologies of pharmacoeconomics.

Answer 3

i. Cost of illness
ii. Cost-benefit analysis
iii. Cost effectiveness analysis
iv. Cost minimization analysis
v. Multi-attribute utility theory or analysis
vii. Willigness to pay.

Question 4

What is the economics of drug prescribing?

Answer 4

The economics of drug prescribing refers to the financial and economic factors that influence the decisions made by healthcare professionals, patients, and healthcare systems when it comes to the selection, prescription, and utilisation of medications.

Question 5

Discuss 8 factors that influence the economics of drug prescribing.

Answer 5

i. Cost-benefit analysis: when prescribing drugs, healthcare professionals oftrn assess whether the potential benefits of a drug, in terms of therapeutic outcomes, justify its cost. This influences the prescribing behaviour of the prescriber.

ii. Generic vs. brand-name drugs: Generic drugs are typically more affordable than their brand-name counterparts, and offer more cost-savings for patients and healthcare systems.This is often a consideration when prescribing drugs.

iii. Price competition: In the competitive market, pharmaceutical companies engage in price competition to make more profit. The availability of cheaper alternatives influences prescribing and drives down overall drug costs.

iv. Research and development: High R&D costs for drug development can contribute to the pricing of new medications. Pharmaceutic companies aim to regain the cost of R&D investment through drug sales.

v. Impact of healthcare policies: Government policies, such as drug pricing regulations and incentives for generic drug adoption, can affect drug prescribing practices.
Changes in policies can have ripple effects throughout the healthcare system

vi. Patient preference: Patient economic considerations play a role in drug adherence and choice. High out-of-pocket costs may lead patients to skip doses or switch to less expensive alternatives, affecting treatment efficacy.

vii. Health insurance and formularies: Health insurance plans and formularies maintained by healthcare systems or insurers influence drug prescribing decisions.
These formularies often categorise drugs into tiers, with lower co-pays or cost-sharing for preferred or generic drugs, encouraging cost-effective prescribing.

viii. Physician incentives: Physician compensation structures can also incluence prescribing behaviours. Some healthcare systems employ performance-based reimbursement models,
which may encourage physicians to prescribe cost-effective treatments.

ix. Prescription drug coverage:The availability and extent of prescription drug coverage through health insurance plans affect patient access to medications
Limited coverage or high co-pays may result in patients foregoing or rationing their medications, impacting health outcomes.

x. Health technology assessment
xi. Emerging therapies
xii. Pharmaceutical industry marketing
xiii. Drug pricing and market dynamics

Question 6

What is bioequivalence?

Answer 6

Drugs are deemed bioequivalent if:
The rate and extent of absorption of the test drug do not show a significant difference from the rate and extent of absorption of the reference drug when administered at the same molar dose of the therapeutic ingredient under similar experimental conditions in either a single dose or multiple doses.

Question 9

Drug products are said to be pharmaceutical equivalents if:

Answer 9

i. They contain the same active ingredients
ii. They are of the same dosage form and route of administration
iii. They are identical in strength and concentration

Question 9

Define therapeutic equivalence.

Answer 9

Drug products are considered therapeutic equivalents only if they are pharmaceutical equivalents and if they can be expected to have the same clinical effect (bioequivalence) and safety profile when administered to patients under the conditions specified in the labeling.

Question 10

What are the FDA standards for therapeutic equivalence?

Answer 10

1. Safe and effective
2. They are pharmaceutical equivalents
3. They are bioequivalent
4. They are adequately labeled
5. They are manufactured in compliance with current GMP regulations