{"id":761,"date":"2020-02-17T21:04:17","date_gmt":"2020-02-17T15:34:17","guid":{"rendered":"https:\/\/medicineplexus.com\/?p=761"},"modified":"2020-02-17T21:04:17","modified_gmt":"2020-02-17T15:34:17","slug":"pharmacoeconomics","status":"publish","type":"post","link":"https:\/\/medicineplexus.com\/pharmacoeconomics\/","title":{"rendered":"Pharmacoeconomics"},"content":{"rendered":"\n<p><strong><u>Pharmacoeconomics<\/u><\/strong><\/p>\n\n\n\n<p><strong>DEFINITION:<\/strong><\/p>\n\n\n\n<p>&#8211; \u201cAnalysis of the costs of drug therapy to health care systems and society.\u201d&nbsp;&nbsp;<\/p>\n\n\n\n<p>&#8211; \u201cAssessing the implications of <em>projected<\/em> outcomes and costs of pharmaceutical products for the decision whether to continue or stop development of a drug and for global pricing strategy\u201d<\/p>\n\n\n\n<p><strong><u>INTRODUCTION:<\/u><\/strong><br>PE uses economic theories, concepts and tools and applies them in health and healthcare<\/p>\n\n\n\n<ul><li>PE is not a cost saving tool<ul><li>PE allows rational resource allocation<\/li><\/ul><ul><li>PE defines intervention with highest value<\/li><\/ul><ul><li>PE helps to solve the clash between scare financial resources and growing healthcare demand<\/li><\/ul><\/li><\/ul>\n\n\n\n<p><strong><u>WHAT IS A PHARMACOECONOMIC EVALUATION OR HEALTH ECONOMIC EVALUATION?<\/u><\/strong><\/p>\n\n\n\n<p>Refers to a study that considers both the <strong>comparative costs<\/strong> associated with two or more health care interventions, and the <strong>comparative clinical effects<\/strong>, measured either in clinical units, health preferences, or monetary benefit.<\/p>\n\n\n\n<p><strong><u>Challenges of healthcare financing health gap<\/u><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"176\" src=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-285.png?w=480\" alt=\"\" class=\"wp-image-762\" srcset=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-285.png 480w, https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-285-300x110.png 300w\" sizes=\"(max-width: 480px) 100vw, 480px\" \/><\/figure>\n\n\n\n<p><strong><u>Reasons for increasing healthcare costs:<\/u><\/strong><\/p>\n\n\n\n<ul><li>Demographic situation<\/li><li>New technologies &amp; innovation<\/li><li>Increased levels of patient information<\/li><li>Lifestyle (drug abuse, obesity, smoking)<\/li><li>QoL expectations<\/li><li>Higher affordability of healthcare<\/li><\/ul>\n\n\n\n<p><strong><u>Why to study pharmacoeconomics?<\/u><\/strong><\/p>\n\n\n\n<ul><li>Expansion of medical knowledge<\/li><li>Increase in treatment options<\/li><li>Responsibility on the health care professionals to provide effective care efficiently<\/li><li>Medical insurance or reimbursement systems<\/li><li>Regulatory mandate<\/li><\/ul>\n\n\n\n<p><strong><u>Pharmacoeconomic concept of value<\/u><\/strong><\/p>\n\n\n\n<p><strong>Value&nbsp; =&nbsp; cost\/outcomes<\/strong><\/p>\n\n\n\n<ul><li>Value is always seeked for a medical intervention, not only for a medication<\/li><li>Value is always related to a specific disease and patient population.<\/li><\/ul>\n\n\n\n<p><strong><u>Costs :<\/u><\/strong><\/p>\n\n\n\n<ul><li>Acquisition (drugs)<\/li><li>Application<\/li><li>Education<\/li><li>Monitoring<\/li><li>Patients costs<\/li><li>Travel to hospital<\/li><li>Absence at work<\/li><li>Side effects<\/li><li>Outpatient services<\/li><li>Inpatient services<\/li><li>Social allowances<\/li><li>Productivity loss<\/li><li>Remuneration loss<\/li><\/ul>\n\n\n\n<p><strong><u>Outcomes :<\/u><\/strong><\/p>\n\n\n\n<ul><li>Clinical<ul><li>Reduction of events (Stroke, MI)<\/li><\/ul><ul><li>Reduced mortality<\/li><\/ul><ul><li>Improvement of score (HAQ)<\/li><\/ul><\/li><li>Quality of life<ul><li>Reduced disability<\/li><\/ul><ul><li>Improvement of productivity<\/li><\/ul><ul><li>Social integration<\/li><\/ul><\/li><li>Intangible outcomes<\/li><\/ul>\n\n\n\n<p>Costs:<\/p>\n\n\n\n<p><strong><u>Direct:<\/u><\/strong><\/p>\n\n\n\n<p>&nbsp;Medical<\/p>\n\n\n\n<ul><li>Drugs<ul><li>Hospitalization<\/li><\/ul><ul><li>Outpatient services<\/li><\/ul><ul><li>Direct payments<\/li><\/ul><ul><li>Lab, imaging.<\/li><\/ul><\/li><\/ul>\n\n\n\n<p>Non-medical<\/p>\n\n\n\n<ul><li>Transportation<\/li><li>Accommodation<\/li><\/ul>\n\n\n\n<p><strong><u>Indirect:<\/u><\/strong><\/p>\n\n\n\n<ul><li>Short term disability<\/li><li>Productivity loss<\/li><li>Long term disability<\/li><\/ul>\n\n\n\n<p><strong><u>Intangible:<\/u><\/strong><\/p>\n\n\n\n<ul><li>Difficult to assess<\/li><li>Pain<\/li><li>Suffering<\/li><\/ul>\n\n\n\n<p><strong><u>STAGES IN ECONOMIC EVALUATION:<\/u><\/strong><\/p>\n\n\n\n<p>Deciding upon study question<\/p>\n\n\n\n<p>Assessment of costs and benefits<\/p>\n\n\n\n<p>Adjustment of timing<\/p>\n\n\n\n<p>Adjustment of uncertainty<\/p>\n\n\n\n<p>Making a decision<\/p>\n\n\n\n<p><strong><u>TYPES OF ECONOMIC EVALUATIONS<\/u><\/strong><\/p>\n\n\n\n<p>Cost-Minimization Analysis (CMA)<\/p>\n\n\n\n<p>Cost-effectiveness Analysis (CEA)<\/p>\n\n\n\n<p>Cost-Benefit Analysis (CBA)<\/p>\n\n\n\n<p>Cost-Utility Analysis (CUA)<\/p>\n\n\n\n<p>Cost Consequence Analysis (CCA)<\/p>\n\n\n\n<p><\/p>\n\n\n\n<ul><li><strong><u>Cost minimization analysis (CMA):<\/u><\/strong><\/li><\/ul>\n\n\n\n<ul><li>Compares two (or more) interventions<\/li><li>Searches&nbsp; the least costly technology&nbsp; (intervention) in terms of costs<ul><li>Necessity of same intervention outcome<\/li><\/ul><ul><li>Least costly way to reach outcome<\/li><\/ul><ul><li><strong>Generic vs. original product<\/strong><\/li><\/ul><ul><li>Advantage:<\/li><\/ul><ul><li>Simple<\/li><\/ul><ul><li>Fast<\/li><\/ul><ul><li>Disadvantage:<\/li><\/ul><ul><li>Requires same outcomes therefore rarely applicable<\/li><\/ul><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"289\" src=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-286.png?w=480\" alt=\"\" class=\"wp-image-763\" srcset=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-286.png 480w, https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-286-300x181.png 300w\" sizes=\"(max-width: 480px) 100vw, 480px\" \/><\/figure>\n\n\n\n<ul><li><strong><u>Cost effectiveness analysis (CEA):<\/u><\/strong><\/li><\/ul>\n\n\n\n<ul><li>CEA consider <strong>both the costs and benefits<\/strong> of two treatment options.<\/li><li>Measured in <strong>non-monetary terms.<\/strong><\/li><li>Expressed in natural units e.g., <strong>cost per years of life saved, cases cured.<\/strong><\/li><li><strong>Cost effectiveness ratio (CER) = Cost \/ Outcome<\/strong><\/li><li><strong>Choice is that of treatment<\/strong> having <strong>lower CER<\/strong><\/li><li>Used to <strong>evaluate programs, therapies or services having common goals.<\/strong><\/li><li>However, CEA <strong>cannot compare between two different alternatives of treatment.<\/strong><\/li><li>Average cost-effectiveness ratio: Do not compare the costs and outcomes among health care alternatives.<\/li><li><strong>Incremental cost-effectiveness<\/strong> : Change in costs and health benefits when one health care intervention is compared to an alternative one Eg. Outpatient surgery vs. short-stay surgery<\/li><\/ul>\n\n\n\n<ul><li><strong>ICER = Difference in the costs\/ Difference in the effectiveness<\/strong><\/li><\/ul>\n\n\n\n<p><strong>Decision Making:<\/strong><\/p>\n\n\n\n<p>Two programs A (comparator) and B.<\/p>\n\n\n\n<p>If Outcome B = Outcome A \uf0e0 Compare costs (CMA)<\/p>\n\n\n\n<p>If Outcome B &gt; Outcome A and Cost B &lt; Cost A, B is dominant<\/p>\n\n\n\n<p>If Outcome B &gt; Outcome A and Cost B &gt; Cost A, we have to make a decision<\/p>\n\n\n\n<p>In order to make a decision on which intervention to choose, a cost-effectiveness ratio (CER) should be calculated.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"480\" height=\"193\" src=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-287.png?w=480\" alt=\"\" class=\"wp-image-764\" srcset=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-287.png 480w, https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-287-300x121.png 300w\" sizes=\"(max-width: 480px) 100vw, 480px\" \/><\/figure>\n\n\n\n<ul><li><strong><u>Cost benefit analysis (CBA):<\/u><\/strong><\/li><li>To <strong>compare alternative therapies<\/strong> where <strong>outcome is different.<\/strong><\/li><\/ul>\n\n\n\n<p>e.g., prolonging life and QoL<\/p>\n\n\n\n<ul><li><strong>Money &#8211; Common stable<\/strong>, consistent and plausible denominator<\/li><li><strong>Outcome = Benefit \/ Cost<\/strong><\/li><li>Most <strong>suitable when resources scarce<\/strong> and <strong>only one program can be implemented<\/strong><\/li><li>Measure of the <strong>benefit in CBA<\/strong> is <strong>expressed in monetary terms<\/strong><\/li><li>CBA <strong>not very common in pharmaco-economics<\/strong><\/li><li>Facilitate decision-making in that there is no need for a threshold<\/li><li>All <strong>CB ratios &lt; 1.0 are good and all CB ratios &gt; 1.0 are bad.<\/strong><\/li><li>CBA are difficult to undertake<\/li><li>Require willingness to pay methodology<\/li><li><strong>All outcomes cannot be converted into monetary terms<\/strong><\/li><li>CBA uses complex perspective and enables to <strong>compare intervention across disciplines<\/strong><\/li><li><strong>CBA example:<\/strong><\/li><\/ul>\n\n\n\n<p>Vaccine 1 \u00e0 cost= 31,000 ; benefit= 35,000&nbsp; so, CB Ratio =1.13<\/p>\n\n\n\n<p>Vaccine 2 \u00e0 cost= 25,000\u00a0 ; benefit=24,000 so CB Ratio= 0.96<\/p>\n\n\n\n<ul><li><strong><u>COST UTILITY ANALYSIS (CUA):<\/u><\/strong><\/li><li>Utility is desirability for a particular state of health<\/li><li>Basic purpose is to improve Quality of life in patients<\/li><li><strong>Accounts for physical, social and psychological well being<\/strong><\/li><li>Patient satisfaction<\/li><li>Quality \u2013 Adjusted Life Year (<strong>QALY)<\/strong><\/li><li>Disability \u2013 Adjusted Life Year (<strong>DALY)<\/strong><ul><li><strong>When CUA\u2026??<\/strong><ul><li>if HRQoL is the relevant outcome<\/li><\/ul><ul><li>comparable impact on morbidity and mortality (cancer)<\/li><\/ul><ul><li>comparison across interventions<\/li><\/ul><ul><li>limited budget<\/li><\/ul><ul><li>maximation of QALY gain<\/li><\/ul><\/li><\/ul><\/li><\/ul>\n\n\n\n<p>EG <strong>Consider two treatments for Stage IV malignant melanoma<\/strong><\/p>\n\n\n\n<p><strong><u>Treatment A:<\/u><\/strong><\/p>\n\n\n\n<ul><li>Survival 1 year<\/li><li>Utility 0.7<\/li><li>Costs 1.400<\/li><li>Cost-utility for A:<\/li><li>1.400\/(0.7 x 1) = 2.000 \/QALY<\/li><\/ul>\n\n\n\n<p><strong><u>Treatment B:<\/u><\/strong><\/p>\n\n\n\n<ul><li>Survival 1.2 year<\/li><li>Utility 0.6<\/li><li>Costs 2.160<\/li><li>Cost-utility for B:<\/li><li>2.160\/(0.6 x 1.2) = 3.000 \/QALY<\/li><\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul><li><strong><u>Cost consequence analysis (CCA):<\/u><\/strong><strong><u><\/u><\/strong><\/li><\/ul>\n\n\n\n<ul><li>An analysis in which <strong>resources and outcomes are calculated but not aggregated into cost outcome ratios<\/strong><ul><li>Characteristics<\/li><\/ul><\/li><li>Resources are measured in monetary units<\/li><li>Outcomes are measured in multiple ways<\/li><li>Results are presented in a tabular format<\/li><li>Advantages<\/li><li>Transparency, Flexibility, Conceptually the simplest<\/li><\/ul>\n\n\n\n<p>Avoids controversies, Most comprehensive<\/p>\n\n\n\n<ul><li>Limitations<\/li><li>Labor\/resource intensive<\/li><\/ul>\n\n\n\n<p><strong><u>PE EVALUATIONS:<\/u><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Type<\/strong><\/td><td><strong>Advantages<\/strong><\/td><td><strong>Disadvantages<\/strong><\/td><\/tr><tr><td><strong>CMA<\/strong><\/td><td>Simple<\/td><td>Same outcomes required<\/td><\/tr><tr><td><strong>CEA<\/strong><\/td><td>Option to use a variety of outcomes Can be compared to interventions with similar outcomes<\/td><td>Cannot be compared with interventions with different outcomes<\/td><\/tr><tr><td><strong>CUA<\/strong><\/td><td>Compares interventions with different outcomes \u2013 common denominator Patient\u00b4s perspective<\/td><td>Requires specific knowledge Difficult to use<\/td><\/tr><tr><td><strong>CBA<\/strong><\/td><td>Compares interventions with different outcomes<\/td><td>Difficult to state health status in monetary values<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong><u>To make it easy:<\/u><\/strong><\/p>\n\n\n\n<ul><li>It is <strong><u>cost minimization<\/u><\/strong> when I stand at the bar and choose the cheapest beer available.<\/li><li>When I compare the price per liter to see which one satisfies my thirst for the least money this is a <strong><u>cost-effectiveness analysis.<\/u><\/strong><\/li><li>When I also take into account the flavor and alcoholic strength to decide which beer I prefer overall, I am performing a <strong><u>cost-utility study<\/u><\/strong><\/li><li>When I decide whether to buy a beer at all, to buy something else entirely, or save my money, and take into account the effect of the drink on my productivity the next day, that is a <strong><u>cost-benefit analysis<\/u><\/strong><\/li><\/ul>\n\n\n\n<p><strong><u>HOW PE IS APPLIED??<\/u><\/strong><\/p>\n\n\n\n<ul><li>Pharmaceutical industry<\/li><li>Decision making during <strong>drug development<\/strong><\/li><li><strong>Pricing a new medicine\/ re-pricing an existing<\/strong> medicine<\/li><li>Convincing the regulatory authorities for <strong>marketing approval<\/strong><\/li><\/ul>\n\n\n\n<ul><li>Health policy makers<\/li><li>Implied value and incremental cost-effective analysis are crucial while making <strong>health policy decisions.<\/strong><\/li><li>Economic analyses are used while <strong>programming budget<\/strong><\/li><li>Clinician &amp; Common man<\/li><li>Making an informed and <strong>rational choice of treatment<\/strong><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"708\" height=\"502\" src=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-288.png?w=708\" alt=\"\" class=\"wp-image-765\" srcset=\"https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-288.png 708w, https:\/\/medicineplexus.com\/wp-content\/uploads\/2020\/02\/image-288-300x213.png 300w\" sizes=\"(max-width: 708px) 100vw, 708px\" \/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Pharmacoeconomics DEFINITION: &#8211; \u201cAnalysis of the costs of drug therapy to health care systems and society.\u201d&nbsp;&nbsp; &#8211; \u201cAssessing the implications of projected outcomes and costs of pharmaceutical products for the decision whether to continue or stop development of a drug and for global pricing strategy\u201d INTRODUCTION:PE uses economic theories, concepts and tools and applies them[&#8230;]\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/posts\/761"}],"collection":[{"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/comments?post=761"}],"version-history":[{"count":0,"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/posts\/761\/revisions"}],"wp:attachment":[{"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/media?parent=761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/categories?post=761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/medicineplexus.com\/wp-json\/wp\/v2\/tags?post=761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}