Modue 3 Flashcards
Drug Cost Formula
Drug Cost = P x Q
P = price
Q = amount of the drug
- Drug type (class, type, or brand vs generic) affects unit price
Define drug utilization
Refers to both the amount (Q) and the types of medicines prescribed and consumed
What can affect drug utilization?
a) Demographic changes
- growth/decline in total population
- age distribution shift - older people tend to use more drugs
b) Disease Patterns
- Changes in rates of diseases requiring drug therapy
- Due in part to aging population and diseases associated with aging, but also changes in society and culture (less smoking, less red meat)
c) Availability of Drug Therapy
- Drug therapy tends to replace other types of treatment/intervention –> other types more invasive, prolonged or less convenient
d) Percieved cost
- Higher income or insurance, more likley to seek and obtain medications and acess new, more expensive medications
e) Prescribing patterns
- tendency to persists with or rely upon particular drug –> Status quo bias
- Due to stability preference, selection difficulty, cost of change, and anticipated regret
Tendency to replace older medications 9cheaper) with newer (expensive) medications
f) Patient expectations
- Perceptions of drug therapy effectiveness and necessity
- Risks vs Benefits
- Direct to consumer advertising
Who manages cost of drug therapy?
Provincial Government
How does the provincial government manage costs?
a) Formularies –> Economic consideration, explicit criteria for use
b) Generics vs. Brand Names –> Cost-effective for development of generics
c) Reference-based pricing –> Therapeutic categories –> Substitution based on therapeutic equivalency
d) Price Freeze and Rollbacks –> Legislative interventions to eliminate pharmacy rebates and reduce cots to the public payer (no price increase)
e) Profesisonal fees and Markups –> provinces negotiate with profesisonal pharmacy associations –> seek to constrain or reduce profesisonal fees to hold down costs
f) Cost-shifting - Consumer/patient pays more of the drug
Why is rationing in healthcare needed?
Demand always exceeds supply
Increased efficiency and more funding are temporary solutions
“fair Resource Allocation”
a) If all cannot have it, none can have it
- resources left unused/wasted when benefit is possible
b) To each an equal share
- Little consideration of the disproportiona l
c) First come, first served
- Favours experienced, affluent and/or well connected groups and individuals
- Potential delays for those with more urgent need
d) To each according to merit (contribution)
- Bias around value of contribution (employed vs. unemployed)
- Behaviour (smoker vs. non-smoker)
e) To each according to ability to pay
- Free market principles
- Those who have need may be priced out of the market, those with capacity to pay, no or little delay to care
f) Each according to need –> Rawl’s difference principle –> Look over the worst off, and recognize some people are afluent –> recognition that we are all not the same
g) Greatest good for the greatest number
- Utalitarian
- Resources are allocated to groups or individuals seen to provide the greatest benefit for the resource
- Rule of Rescue –> The desire to help if we can –> tilst towards affluent and people we as worthy
- Unknown, marginalied are disadvantaged and less likely to recieve asssistance
g) To each an equal chance - fair innings concept
- The young have not enjoyed a full life and are given priority
Pluralistic Baragaining
- Multiple groups seek to influence policies and practices
- Need to detrmine who partcipates (who sits at the table)
recognizes various analytical and ethical tools - “oh well I failed to think of you”
Collective argument
Covid-19 Vaccine Rationing
- Affluent moved to vacataion homes; many had to stay to go to work or school
- people who had to go to work –> worth the risk
- Income opportunities prioritized over health –> many compunded with unsafe housing
- Consensus that essential workers and first line healthcare providers should receive the vaccine first (to each according to merit (contribution))
- Suggests that vaccines should be rationed by two principles:
–> Saving the most lives –> greatest good for the greatest number
–> Saving the most life years (to each an equal chance) –> young aults first b/c most years to live? - Since affects old more severly, saving most lives more beneficial –> Older people next
- Lottery vs first come first served
- First come first served –> Favours caucasion affluent and well-connected individuals
- Survey –> Blacks and hispanics more worried about getting infected with Covid-19 than whites
- Lottery –> Some people have already benefited more than others (e.g. acess to healthcare or insurance) so is a lottery truly fair
- Worse off cannot afford to stay home and often live in homes with multiple people and require public transport
- prioritize the worse off
Define PEA
alternative drug therapies based on defined costs (inputs) and benefits (outcomes)
Two types of direct costs
a) Medical –> monetary value of healthcare associated with the prevention, detection or tx of treatment
b) Non-medical –> Monetary value of non-healthcare resources associated with the prevention, detection or tx of disease/illness e.g. child care expenses, transportation
Indirect costs
Loss of productivity associated with morbidity and/or premature death
Dollar amount based on earning capacity
Intangible Costs
Cost of disease of illness (which you wish to infer an economic value) that cannot be expressed in monetary terms (pain, suffering, grief)
ECHO Model
Economic Outcomes (payer-centered) –> direct, indirect and intangible monetary value
Clinical Outcomes (provider-centered) –> changes in morbidity, mortality, biological markers
Humanistic Outcomes (patient-centered) –> Functional status, utility (preferred health state)
Quality of Life
a broad term encompassing the entire range of human experience, perceptions and states of being
