Pharmacoeconomics

Question 1

What are the 5 types of cost illness?

Answer 1

1. Cost of Illness
2. Cost Minimization
3. Cost-Benefit
4. Cost-Effectiveness
5. Cost-Utility

Question 2

What is the outcome of Cost Minimization?

Answer 2

Equivalent Measure

Question 3

What is the outcome of Cost Benefit?

Answer 3

Dollars

Question 4

What is the outcome of Cost Effectiveness

Answer 4

Clinical Measure/ Natural Units

Question 5

What is the outcome of Cost-Utility?

Answer 5

Quality-Adjusted Life Years

Question 6

What is the cost of illness?

Answer 6

• economic impact of disease on a population
• measures the economic burden of disease

Question 7

What are the advantages of cost of illness?

Answer 7

identifying disease
epidemiology
outcomes and consequences

Question 8

What is an example of cost of illness?

Answer 8

cost attributable to Type II diabetes in adults in the U.S

Question 9

What are the three broad components of illness?

Answer 9

1. medical resources used to treat the illness
2. the non-medical resources associated
3. lost productivity due to illness or disability

Question 10

What is cost minimization?

Answer 10

compares two or more alternative treatments that produce clinically equivalent outcomes
* cannot be used when outcomes are different
* you want to choose the one with the smallest total cost

Question 11

What is an example of cost minimization?

Answer 11

treating patient with the same therapy in hospital vs home

Question 12

What is cost effectiveness?

Answer 12

measuring therapeutic effect in natural units in order to compare the cost per gain in therapeutic effect

Question 13

What is the limitation for cost effectiveness?

Answer 13

must choose a single measure so different outcomes cannot be compared

Question 14

What is the advantage for cost effectiveness?

Answer 14

clinicians are familiar with measuring these outcomes and they are routinely collected

Question 15

What is the equation for cost effectiveness?

Answer 15

cost of treatment/ therapeutic effect (Natural units)

Question 16

What is the importance of cost effectiveness?

Answer 16

developing a new drug is a HUGE investment and companies try to recoup that upfront investment with drug pricing after approval

cost will transfer to the patient and the insurer due to the payment companies have to make to create the drug

Question 17

What are the cost effective therapies?

Answer 17

therapies with outcomes worth their corresponding costs relative to competing alternatives

• you define the worth

Question 18

What are examples where Cost Effective Therapies are the best techniques?

Answer 18

• comparing the costs and outcomes of two or more antihypertensives
• compare two programs designed to prevent excess mortality

Question 19

What is cost benefit analysis?

Answer 19

• evaluation technique for comparing the value of all resources consumed (costs) in implementing a program or intervention against the value of the outcome (benefits) from that program or intervention
• broad usually addresses societal issues
• valued in monetary units

Question 20

Examples of Cost Benefit Analysis?

Answer 20

• AIDS prevention and awareness programs
• Smoking cessation intervention
• Diabetes drug adherence
• Breast cancer screening

Question 21

What type of outcomes are not appropriate to use in cost-utility analysis?

Answer 21

intermediate outcomes

Question 22

What does Cost-Utility Analysis require?

Answer 22

the measurement of final outcomes in terms of changes in life expectancy adjusted for patient preferences

Question 23

What is QALY?

Answer 23

• quality adjusted life years
• economics attempt to assign value or benefits to actions and behaviors
• an attempt to determine the value of living an extra year with pain or illness versus living those extra years pain and symptom free

Question 24

What is utility?

Answer 24

measures outcomes based on years of life that are adjusted by utility weights
* no real consensus on how these should be measured

Question 25

What is cost utility?

Answer 25

the most difficult and expensive economic evaluation method to use

Question 26

Examples of using cost utility?

Answer 26

• Psychological well-being physical and social function are important in the treatment of arthritis
• Chemotherapy may increase survival but decrease well-being, both quality and quantity of life are important

Question 27

How are costs measured?

Answer 27

over a relevant time period such as a month or year
* dependent on span of illness

Question 28

How do we determine the value of cost?

Answer 28

• determining the amount for each item listed can be difficult, especially for indirect and intangible costs
• it is important in determining the opportunity cost

Question 29

What is the Average Wholesale Price?

Answer 29

the “sticker price” of a medication-pretty much like the sticker price of a car

Question 30

What is the Wholesale Acquisition Cost?

Answer 30

the “catalog” price of the drug; its the estimate of what wholesalers pay to the manufacturer of the drug

Question 31

What is the Average Manufacture’s Price?

Answer 31

that is the most accurate estimate of what pharmacies pay for a drug

Question 32

What is discounting?

Answer 32

if costs of products or services extend over more than one year, the time value of money must be taken into account

Question 33

What is sensitivity analysis?

Answer 33

testing the variability of outcome or cost assumptions under different scenarios (best, expected, worst case)

Question 34

What type of approach is used when conducting pharmacogenomic studies?

Answer 34

systemic approach to decision making under conditions of uncertainty

Question 35

What is simulation/modelling?

Answer 35

• used when direct observation not feasible and when time or money constraints are prohibitive
• sum of probabilities of a cost occurring x the cost is the estimated cost of each treatment alternative