Pharmacoeconomics Flashcards
What is Pharmacoeconomics
- description and analysis of the costs and consequences (outcomes) of pharmaceuticals
- process of identifying, measuring, and comparing the costs, risks, and benefits of programs, services, and therapies
Health Consumption Expenditures as % of GDP vs Life Expectancy
the United States spend more on healthcare as a % of GDP but have a much lower life expectancy (76) compared to other countries such as Canada, UK, Germany, Belgium, or Switzerland
Why is Pharmacoeconomics important?
- healthcare costs are increasing
- health outcomes are decreasing
- drugs are continuing to be expensive
HOW ARE WE GOING TO SPEND OUR RESOURCES
4 Types of Cost
Direct Medical Costs
Direct Non-Medical Costs
Indirect Costs
Intangible Costs
Direct Medical Costs
medical costs associated with providing treatment
Ex) cost of med, physician visits, hospitalizations
Direct Non-Medical Costs
costs directly associated with treatment but not medical in nature
Ex) cost of transportation, parking, gas, babysitter, lodging, food
Indirect Costs
costs that result in a loss of productivity because of illness/death –> no transfer of money
Ex) missing school or work, decreased productivity
Intangible
costs of pain, suffering, anxiety, fatigue due to illness or treatment –> difficult to measure
Different perspectives of who bears the cost
Patient: how much $ comes out of their pocket
Institution: how much $ is hospital getting reimbursed compared to how much they are spending
Payer: how much $ is insurer getting reimbursed and how much will they cover
Society: taxes that support Medicaid and Medicare
Pharmacoeconomic Analyses
Cost-Minimization
Cost-Benefit
Cost-Effectiveness
Cost-Utility
How are costs measured?
US dollars
Cost-Minimization Analysis
used to compare costs of interventions with EQUIVALENT clinical outcomes –> measures total direct cost of drug (drug, preparation, administration, etc)
Ex)
- generic vs brand
- Drug A vs Drug B with equal efficacy/safety in drug class
Cost Measurement Unit: $$
Outcome Measurement Unit: not measured (equivalent)
Advantages:
- simplicity
- no assessment of outcome
Disadvantages:
- ONLY useful when outcomes are equal
Cost-Benefit Analysis
measures costs of interventions & outcomes in MONETARY UNITS
determines which intervention provides the best monetary benefit
MUST ASSIGN MONETARY VALUE TO CLINICAL ENDPOINTS
Cost Measurement Unit: $$
Outcome Measurement Unit: $$
Advantages:
- allows comparison of interventions with different outcomes
Disadvantages:
- requires assigning monetary values to life, pain, LDL, BP
Cost-Effectiveness Analysis
MOST COMMON TYPE
measures outcomes in natural health units that are easy to apply
determines which intervention achieves given objective at the lowest cost
Cost Measurement Unit: $$
Outcome Measurement Unit: natural health units
Advantages:
- outcomes measured in units that are easy to understand by clinicians
- no need to convert outcome to monetary values
Disadvantages:
- outcomes must be measured in same unit
- length of life is not the same as quality of life
ICER
Incremental Cost-Effectiveness Ratio
Cost of Drug B - Cost of Drug A /
Outcome of Drug B - Outcome of Drug A
Cost-Utility Analysis
measure outcomes in terms of quality of the outcome produced –> examines the cost + value (utility units)
Cost Measurement Unit: $$
Outcome Measurement Unit: QALY
Advantages:
- accounts for both quantity and quality
Disadvantages:
- not a precise measure
- opportunity for bias
Most Common Outcome in CUA
Quality Adjusted Life Year
Quality Adjusted Life Year
takes into account both the quantity and the quality of life gained by interventions
How to calculate QALY
Drug A: 4 years in 75% health
4 x 0.75 = 3 QALY
Drug B: 4 years in 50% health
4 x 0.5 = 2 QALY
What is considered cost effective when comparing interventions?
$100,000 - 150,000 per QALY gained
Role of Pharmacist in Pharmacoeconomics
- evaluate pharmacoeconomic literature
- apply results to clinical decisions (individual pt care, formulary management, resource allocation, price setting)
- assist in design of research studies
