Lecture 16: Intro to Pharmacoeconomics Flashcards
Pharmaco-economics (PECON)
- A compilation of methodologies that evaluate ECONOMIC, CLINICAL, AND HUMANISTIC OUTCOMES (ECHO) of pharmaceutical products and services
- Efficiency, Efficacy, and Effectiveness, are frequently used terms
SEVERAL TYPES OF COSTS CAN BE USED IN PECON STUDIES:
a) DIRECT MEDICAL COSTS
b) DIRECT NONMEDICAL COSTS
c) INDIRECT COSTS
d) INTANGIBLE COSTS
ECO Model for Health outcomes
Economic outcomes
Clinical outcomes
Humanistic outcomes
“Medical Resources”
“Direct Medical Costs”:
costs paid directly for the medical products
hospitalization(s), MD visits, Rxs
“Non-Medical Resources”
“Personal non-medical costs”
transportation, child care
“System non-medical costs”
Special education programs
Indirect Costs
costs of “morbidity” & “mortality”
lost wages or productivity
premature death
Intangible Costs:
cost of non-financial “humanistic” outcomes
cost associated with pain & suffering
associated with measuring quality of life
Pharmacoeconomics
describes a compilation of methodologies that
evaluate economic, clinical, and humanistic outcomes of pharmaceutical products
and services
PECON employs
techniques from public economics
PECON studies are used
to evaluate a variety of areas that involve pharmaceuticals
Selection of formulary products
Treatment guidelines and disease management
Prior authorization, step-therapy policies and prescription benefit plans
Efficacy
“Therapy or medication works” under controlled conditions
Effectiveness
“Therapy or medication works in the real world”
Works for individuals for whom it was intended
Efficiency
Lowest cost per unit output
Best allocation of resources that optimize productivity
Steps for Conducting a PECON Analysis- COSTS
- Identify, measure, and value costs
Identifying relevant costs
Identify costs of all relevant resources consumed
A relevant cost is one not incurred if it were not for the product or service that is being studied
Cost categories to consider
Direct medical costs
Direct nonmedical costs
Indirect costs
Intangible costs
PERSPECTIVE:
Different costs are borne by different parties: Patients, payers, practitioners
Discounting
Costs of products or services may extend over more than one year
Time value of money must be taken into account
Interest and inflation
Medical Consumer Price Index (MCPI) is often used to estimate inflation rates
Present value of costs is also used
MCPI
Medical Consumer
Price Index
Sensitivity Analysis- Conducting a PECON Analysis
Testing the variability of outcome or cost assumptions under different plausible scenarios
-Account for uncertainty in PECON evaluations
Data Used in Performing PECON STUDIES
Data can come from RCTs, observational studies, literature, each with distinct advantages and disadvantages
- Critical evaluation of PECON studies involves a series of steps including a detailed
evaluation of input values (COSTS AND OUTCOMES) used to arrive at estimate
results
Randomized controlled trials
Patients are recruited, randomly assigned to different groups receiving different treatment alternatives
- Costly and results are not reflective of “real world
- Standardized treatment protocol followed
- Patients and investigators are blinded and do not know which treatment they
have been assigned to or what treatment they are receiving
Naturalistic designs
Patients are still recruited and randomly assigned
However patients recruited and care delivered/received are representative of that seen in routine
practice
Decision analysis
Systematic approach to decision making under conditions of uncertainty
Clinical and resource data are collected from literature and utilized in a statistical model that
simulates variability in the decision making process
2 main types – Decision Trees and Markov Models
Retrospective analysis
Uses observational data (i.e. actual claims)
