Pharmacoeconomics

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Pharmacoeconomics

• The description and analysis of the costs and
  consequences of pharmaceutical products and/or
  services and their impact on individuals, health
  care systems,
• and society.

Source Bootman et al. Pharmacoeconomics. Second
ed. Cincinnati Harvey Whitney Books Co., 1996
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Typical Pharmacoeconomic Methods

• Cost Benefit Analysis
• Cost Effectiveness Analysis
• Cost Utility Analysis

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Basic Components of Pharmacoeconomics

• Pharmacoeconomics looks at a decision from a
  consistent perspective and evaluates the costs
  and benefits/effects of making that decision.
  Note that there needs to be at least two
  choices/alternatives and that both
  benefits/effects and costs need to be considered.

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Related Forms of Analysis

• Budget Impact AnalysisLooks only at costs. Per
  member per month is the total cost per month
  divided by all the members in the plan.
• Budget Impact Analysis does not tell you whether
  something is worth doing.

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Related Forms of Analysis

• Quality of life General and Specific Measures
• Measures need to be validated.
• Usually looks only at effects.
• Need to consider what is clinically meaningful.
• Statistical significance is not the same as
  clinical significance.

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Drummonds framework for Evaluating an Economic
Analysis

• 1. Was a well-defined question posed in an
  answerable form?
• 2. Was a comprehensive description of the
  competing alternatives given?
• 3. Was the effectiveness of the program or
  service established?
• 4. Were all the important and relevant costs
  consequences for each alternative identified?
• 5. Were costs and consequences measured
  accurately in appropriate physical units?

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Drummonds framework for analysis

• 6. Were costs and consequences valued credibly?
• 7. Were costs and consequences adjusted for
  differential timing?
• 8. Was an incremental analysis of costs and
  consequences of alternatives performed?
• 9. Was allowance made for uncertainty in the
  estimates of costs and consequences?
• 10. Did the presentation and discussion of study
  results include all issues of concern to users?

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1. Was a well-defined question posed in an
answerable form?

• A good research question contains 3 components
• State/imply type of evaluation CMA, CEA, CBA,
  CUA
• Identify comparison groups
• Perspective

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1. Was a well-defined question posed in an
answerable form?

• Is a chronic home care program worth it?
• Will a community hypertension screening program
  do any good?
• How much does it cost to run our intensive care
  unit?
• What are the costs and outcomes of adolescent
  counseling by social workers?

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1. Was a well-defined question posed in an
answerable form?

• From the viewpoint of a) both the Ministry of
  Health and the Ministry of Community and Social
  Services budgets, and b) patients incurring
  out-of-pocket costs
• Is a chronic home care program preferable to the
  existing program of institutionalized, extended
  care in designated wards of general hospitals?

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2. Was a comprehensive description of the
competing alternatives given?

• A complete description allows the reader to
  determine whether
• The program is applicable to their setting.
• Important costs consequences are omitted.
• The program is replicable.
• Who did what to whom, where and how often
• Was the most appropriate treatment comparator
  selected?

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3. Was the effectiveness of the program or
service established?

• Type of study design
• RCT
• Overview of clinical trials
• Observational data
• Effectiveness vs Efficacy
• Underlying assumptions
• Potential biases

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4. Were all the important and relevant costs
consequences for each alternative identified?

• Range wide enough for the research question
• Should cover all relevant viewpoints
• Include start-up operating costs

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4. Were all the important and relevant costs
consequences for each alternative identified?

• A clear and specific statement of the primary
  objective of each alternative program, treatment
  or service is critical in selecting type of
  analysis.
• Importance of consequences
• Therapeutic effects ? CEA
• Change of QOL of patients/families ? CUA
• Overall value created ? CBA

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5. Were costs and consequences measured
accurately in appropriate physical units?

• Appropriateness
• Consistency make sure all listed measures are
  reported.
• Special circumstances that made measurement
  difficult e.g., joint use of resources.

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6. Were costs and consequences valued credibly?

• Sources methods of valuation
• Market values for changes
• Adjustments
• -Micro-costing vs per diem costs
• Appropriate valuation of consequences
• Avoid double-counting for societal perspective

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7. Were costs and consequences adjusted for
differential timing?

• Discounted to the present value
• Check the discount rate is it justified?
• Time preference ? we prefer to have dollars or
  resources now as opposed to later because we can
  benefit from them in the interim

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8. Was an incremental analysis of costs and
consequences of alternatives performed?

• For meaningful comparisons, need to examine the
  additional costs that one service or program
  imposes over another
• Incremental vs Average

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9. Was allowance made for uncertainty in the
estimates of costs and consequences?

• Uncertain costs or consequences
• Justification for range of values in sensitivity
  analysis
• Results of analysis

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10. Did the presentation and discussion of study
results include all issues of concern to users?

• Basis of conclusion
• Prior studies
• Generalizability
• Other important factors affecting decision
• Feasibility

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Sponsorship

• Was the study industry sponsored?
• Did the author state they had the freedom to
  publish regardless of the study outcomes?

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Determining if results apply to you

• Does the study represent
• population
• setting
• practice pattern
• cost and outcomes
• If not are the results in the sensitivity
  analysis applicable?

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References

• Gold, Siegel, Russell, Weinstein, Cost
  Effectiveness in Health and Medicine, Oxford
  University Press
• Drummond, OBrien, Stoddart, Torrance, Methods
  for the Economic Evaluation of health Care
  Programmes, Second Edition, Oxford University
  Press