Strategic Management of Hospitals-Pharmacoeconomics

1,282
-1

Published on

Published in: Economy & Finance, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,282
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
84
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Strategic Management of Hospitals-Pharmacoeconomics

  1. 1. Strategic Management of Hospitals: Pharmacoeconomics as a Decision Tool <ul><li>Thomas R. Einarson, PhD </li></ul><ul><li>Leslie Dan Faculty of Pharmacy </li></ul><ul><li>University of Toronto </li></ul>
  2. 2. Outline <ul><li>Healthcare costs and choices </li></ul><ul><li>Pharmacoeconomics </li></ul><ul><li>Definitions </li></ul><ul><li>Methods </li></ul><ul><li>Applications </li></ul><ul><li>Advantages and disadvantages </li></ul>
  3. 3. Canadian healthcare spending 1975-2005 (millions)
  4. 4. Healthcare costs by type
  5. 5. Trends – hospital $ (Source: CIHI) <ul><li>Hospital share is decreasing </li></ul><ul><ul><li>From 44.7% in 1975 -> 29.9% in 2005 </li></ul></ul><ul><ul><li>28.7% decrease in share </li></ul></ul><ul><li>Hospital expenditures </li></ul><ul><ul><li>$5.5 billion in 1975 [Total: $12 billion] </li></ul></ul><ul><ul><li>$42.4 billion in 2005 [Total: $142 billion] </li></ul></ul><ul><ul><li>677% increase [Total: 1064%] </li></ul></ul>
  6. 6. Trends – drug $ <ul><li>Drug share increasing </li></ul><ul><ul><li>8.5% in 1985 </li></ul></ul><ul><ul><li>17.5% in 2005 </li></ul></ul><ul><ul><li>106% in share </li></ul></ul><ul><li>Drug costs </li></ul><ul><ul><li>$1.1 billion in 1975 </li></ul></ul><ul><ul><li>$24.8 billion in 2005 </li></ul></ul><ul><ul><li>2200% increase </li></ul></ul>
  7. 7. Reasons for increases <ul><li>Increase in utilization </li></ul><ul><ul><li>More people taking drugs </li></ul></ul><ul><ul><ul><li>More population </li></ul></ul></ul><ul><ul><ul><li>More >65, free drugs (access) </li></ul></ul></ul><ul><ul><li>More disease -> more drugs </li></ul></ul><ul><ul><li>Longevity -> more disease -> more drugs </li></ul></ul><ul><li>Increase in cost </li></ul><ul><ul><li>Research costs money </li></ul></ul><ul><ul><li>New drugs research intensive </li></ul></ul>
  8. 8. Canada: population increase 1966-2006
  9. 9. Average cost per citizen covered by BC Pharmacare $478 1999 $406 1995 $354 1991 $192 1987 Cost Year
  10. 10. Drug costs on the rise
  11. 11. Costs of therapy (cancer drugs) Drug acquisition costs
  12. 12. Selecting drugs in hospital <ul><li>Open formulary </li></ul><ul><ul><li>No restriction </li></ul></ul><ul><ul><li>Pay for all drugs prescribed </li></ul></ul><ul><li>Formulary </li></ul><ul><ul><li>Most standard drugs available </li></ul></ul><ul><ul><li>Medical staff + pharmacy decide on content </li></ul></ul><ul><li>Problem: demand exceeds budget </li></ul><ul><ul><li>Need a method for judging relative merits </li></ul></ul>
  13. 13. Background <ul><li>Economics = the study of the allocation of resources </li></ul><ul><li>Health economics: application of economic principles to healthcare </li></ul><ul><li>Basis = value for money </li></ul><ul><ul><li>Money = common denominator for comparisons </li></ul></ul>
  14. 14. Pharmacoeconomics <ul><li>Pharmaco = drugs </li></ul><ul><li>Application of health economics to drugs and drug services </li></ul><ul><li>Techniques not different </li></ul><ul><li>Interpretations parallel </li></ul>
  15. 15. Levels of analysis <ul><li>Macro (population) </li></ul><ul><ul><li>Most PEA is this type </li></ul></ul><ul><ul><li>Applies to the average in the population </li></ul></ul><ul><ul><li>Requires translation to apply to patients </li></ul></ul><ul><li>Meso (group) </li></ul><ul><ul><li>Usually applied at this level </li></ul></ul><ul><li>Micro (Individual) </li></ul><ul><ul><li>Never done at this level in PEA </li></ul></ul>
  16. 16. Definition <ul><li>Pharmacoeconomics: </li></ul><ul><li>Evaluation of a drug against one or more comparators with respect to both costs and outcomes . </li></ul><ul><ul><li>Comparator = depends on purpose </li></ul></ul><ul><ul><ul><li>Placebo, do nothing </li></ul></ul></ul><ul><ul><ul><li>Standard treatment </li></ul></ul></ul>
  17. 17. Why? <ul><li>Resources scarce </li></ul><ul><li>Demands increasing </li></ul><ul><li>Forced to make choice </li></ul><ul><li>Pharmacoeconomics assesses value for money (common metric) </li></ul><ul><ul><li>A tool for decision making </li></ul></ul>
  18. 18. Perspective <ul><li>Whose viewpoint? </li></ul><ul><ul><li>Need to identify the audience for the report </li></ul></ul><ul><ul><li>Need to specify the analytic viewpoint </li></ul></ul><ul><li>Determines: </li></ul><ul><ul><li>Data collected </li></ul></ul><ul><ul><li>Valuation of resources </li></ul></ul><ul><ul><li>Interpretation of results </li></ul></ul>
  19. 19. Analytic perspectives <ul><li>Society (Comprehensive, overall) </li></ul><ul><ul><li>All costs considered, regardless of payer </li></ul></ul><ul><ul><li>Usually includes “indirect” costs </li></ul></ul><ul><li>Payer </li></ul><ul><ul><li>Insurer, government, individual </li></ul></ul><ul><li>Standard: </li></ul><ul><ul><li>Societal + Ministry of Health (Canada) </li></ul></ul>
  20. 20. Types of cost <ul><li>Direct costs </li></ul><ul><li>Indirect costs </li></ul><ul><li>Economic NOT accounting definitions used in PEA </li></ul><ul><ul><li>Overhead costs included in hospital perspective </li></ul></ul>
  21. 21. Direct costs <ul><li>Costs of resources consumed in treating patients </li></ul><ul><li>Cost centres: </li></ul><ul><ul><li>Drugs (preparation, administration, monitoring) </li></ul></ul><ul><ul><li>Medical care (MD, specialist) </li></ul></ul><ul><ul><li>Hospital (inpatient, units) </li></ul></ul><ul><ul><li>Laboratory (blood, urine, x-ray, NMR, CAT scans) </li></ul></ul><ul><ul><li>Allied healthcare (nursing, physio, massage, social work) </li></ul></ul><ul><ul><li>Transportation to therapy (sometimes) </li></ul></ul><ul><ul><li>Cost of managing ADRs </li></ul></ul>
  22. 22. Using costs <ul><li>Use standard lists for cost values </li></ul><ul><ul><li>The standard price that any person would pay </li></ul></ul><ul><ul><li>Do NOT use special costs, bargains </li></ul></ul><ul><ul><li>Exception: hospitals analyzing their own data </li></ul></ul><ul><li>Select year of analysis </li></ul><ul><ul><li>Usually current year or immediate past year </li></ul></ul><ul><ul><li>Standardize all costs to year of analysis </li></ul></ul><ul><ul><ul><li>Use health component of Consumer Price Index or equivalent </li></ul></ul></ul>
  23. 23. Indirect costs <ul><li>Lost productivity </li></ul><ul><ul><li>Early death </li></ul></ul><ul><ul><ul><li>Time totally lost forever </li></ul></ul></ul><ul><ul><li>Decreased ability to work </li></ul></ul><ul><ul><ul><li>Absenteeism due to disease </li></ul></ul></ul><ul><ul><li>“ Presenteeism” </li></ul></ul><ul><ul><ul><li>On the job, being paid, not inefficient </li></ul></ul></ul><ul><li>Caretaker time </li></ul><ul><li>Problems </li></ul><ul><ul><li>Leisure time, retired people </li></ul></ul><ul><ul><ul><li>Consider lost time equal </li></ul></ul></ul><ul><ul><li>Under-employment/unemployment </li></ul></ul><ul><ul><ul><li>Use Friction method </li></ul></ul></ul><ul><ul><ul><li>Counts only time to train replacement personnel </li></ul></ul></ul>
  24. 24. Time horizon <ul><li>Analysis must be over enough time to allow for all important outcomes </li></ul><ul><ul><li>Cancer drugs use lifetime </li></ul></ul><ul><ul><li>Antibiotics (acute) – 1 month/3 months </li></ul></ul><ul><ul><li>Often use 1 year </li></ul></ul><ul><li>Problem </li></ul><ul><ul><li>Data availability over time </li></ul></ul><ul><ul><li>Must discount costs if >1 year </li></ul></ul>
  25. 25. Discounting <ul><li>Preference for benefits now and costs later </li></ul><ul><li>NOT because of inflation </li></ul><ul><li>Based on stable rates for safe investments (government bonds, GICs, cash market) </li></ul><ul><li>Standard = 5%, vary in sensitivity analyses over range 0-10% </li></ul>
  26. 26. Summary: costs <ul><li>A: Identify resources consumed </li></ul><ul><li>B: Quantify resource use </li></ul><ul><li>C: Qualify (cost) that use </li></ul><ul><ul><li>Use standard costs </li></ul></ul><ul><ul><li>Discount if over >1 year </li></ul></ul><ul><li>Total cost =  Resource i *Cost i </li></ul><ul><li>Average across all patients </li></ul><ul><li>Extrapolate to population using demographic statistics </li></ul>
  27. 27. Outcomes: ECHO model <ul><li>Economic </li></ul><ul><ul><li>Dollars </li></ul></ul><ul><li>Clinical </li></ul><ul><ul><li>Positive: Cure, life saved, life-year gained </li></ul></ul><ul><ul><li>Negative: Case avoided (disease, death) </li></ul></ul><ul><li>Humanistic </li></ul><ul><ul><li>Quality of life, patient preferences </li></ul></ul>
  28. 28. QALYs <ul><li>Quality adjusted life-years </li></ul><ul><ul><li>e.g., cancer patient </li></ul></ul><ul><li>Estimate duration of life remaining </li></ul><ul><ul><li>Identify health states involved </li></ul></ul><ul><ul><ul><li>e.g., Phases II-IV </li></ul></ul></ul><ul><ul><li>Measure length of each health state </li></ul></ul><ul><ul><li>Adjust each by utility value: </li></ul></ul><ul><ul><ul><li> Time i *Utility i </li></ul></ul></ul><ul><ul><li>Average over all patients </li></ul></ul><ul><li>Universal outcome </li></ul><ul><ul><li>Can compare across treatments </li></ul></ul><ul><ul><li>Can compare across diseases </li></ul></ul>
  29. 29. Utilities <ul><li>Standard gamble </li></ul><ul><li>Time tradeoff </li></ul><ul><li>Visual analog scale </li></ul><ul><li>Whose? </li></ul><ul><ul><li>Patients </li></ul></ul><ul><ul><ul><li>Accurate estimate of implications </li></ul></ul></ul><ul><ul><ul><li>Problem: adaptation to the condition </li></ul></ul></ul><ul><ul><li>Normals (society) </li></ul></ul><ul><ul><ul><li>Need to help them understand the disease </li></ul></ul></ul>
  30. 30. Preferred outcomes <ul><li>Ultimate outcomes: </li></ul><ul><ul><li>Cure, life-year gained, QALY </li></ul></ul><ul><ul><li>Avoided cases of: </li></ul></ul><ul><ul><ul><li>Disease (vaccine) </li></ul></ul></ul><ul><ul><ul><li>Death </li></ul></ul></ul><ul><li>Avoid intermediate outcomes </li></ul><ul><ul><li>Decrease in BP, serum cholesterol, units on a scale (pain, health status, etc.) </li></ul></ul>
  31. 31. Types of analyses Cost-minimization Cost-effectiveness Cost-utility Cost-benefit Comparison of efficacy / effectiveness Cost comparison Two or more alternatives Cost-outcome description (Non-comparative CBA) Outcome assessment (e.g., Quality of Life measurement) Cost description (Cost of Treatment, Burden of Illness) One (No comparison of alternatives) Costs + Outcomes Outcomes only Costs only Alternatives
  32. 32. Cost analyses (non-PEA) <ul><li>Burden of sickness </li></ul><ul><li>Cost of illness </li></ul><ul><li>Financial feasibility </li></ul><ul><ul><li>Implementing a new pharmacy service </li></ul></ul><ul><ul><li>E.g., cost-revenue model </li></ul></ul>
  33. 33. Burden of sickness/illness <ul><li>Macro level (population based) </li></ul><ul><li>“ Top down” analysis </li></ul><ul><li>Dollars spent on a disease </li></ul><ul><li>Direct costs </li></ul><ul><ul><li>Drugs, MD, hospital </li></ul></ul><ul><li>Indirect costs </li></ul><ul><ul><li>Morbidity, mortality, time lost from work, decreased productivity (presenteeism), etc. </li></ul></ul>
  34. 34. Cost of illness/Cost of treatment <ul><li>Micro level </li></ul><ul><li>“ Bottom up” analysis </li></ul><ul><li>Individual based </li></ul><ul><li>Itemize resources consumed </li></ul><ul><ul><li>Drug, visits to MD, tests, etc. </li></ul></ul><ul><ul><li>Chart review, database analysis, modelled </li></ul></ul>
  35. 35. Approaches to COI analysis <ul><li>Incidence based </li></ul><ul><ul><li>Start at onset of disease </li></ul></ul><ul><ul><li>Follow until resolution/death </li></ul></ul><ul><ul><li>E.g., Gonzalez JC, Einarson TR. Cost of Type-2 diabetes in Colombia. PharmacoEconomics 2008 (in press). </li></ul></ul><ul><li>Prevalence based </li></ul><ul><ul><li>Cross sectional </li></ul></ul><ul><ul><li>All cases in one year </li></ul></ul><ul><ul><li>Example: Pain due to multiple sclerosis: analysis of the prevalence and economic burden in Canada. Pain Res Manag 2007;12(4):259-65 </li></ul></ul>
  36. 36. Contribution <ul><li>Identifies costs </li></ul><ul><ul><li>Burden to society </li></ul></ul><ul><ul><li>Cost to treat individual </li></ul></ul><ul><li>Basis for pharmacoeconomic evaluation (Baseline) </li></ul><ul><li>BUT, does not address appropriateness or outcomes </li></ul>
  37. 37. COI Example: bisphosphonates Kruk. Supportive Care in Cancer 2004; 12: 844-51.
  38. 38. Burden of ADRs (USA) Johnson. Arch Intern Med 1995;155(18):1949-56.
  39. 39. 0.8 206,068 Female Cancers 1.1 274,621 Diabetes 1.1 283,106 Motor Vehicle Traffic Accidents 2.4 636,491 Chronic Bronchitis / Emphysema / Asthma 4.8 1,258,063 Stroke 6.0 1,571,999 Coronary Heart Disease SUBCATEGORY 100.0 26,096,300 TOTAL 3.2 844,567 Ill-defined Conditions 0.6 156,808 Blood Diseases 0.9 223,015 Skin and Related Diseases 0.9 231,923 Birth Defects 1.3 345,071 Infectious and Parasitic Dieseases 2.0 518,012 Perinatal Conditions 2.0 526,785 Endocrine and Related Diseases 3.0 792,862 Nervous System and Sense Organ Diseases 4.1 1,075,828 Genitourinary Diseases 4.9 1,285,910 Musculoskeletal Diseases 5.2 1,349,205 Well-patient Care 6.3 1,649,707 Pregnancy 6.9 1,788,230 Respiratory Diseases 8.0 2,093,374 Digestive Diseases 8.6 2,253,487 Injuries 9.5 2,467,408 Cancer 13.9 3,631,788 Mental Disorders 18.6 4,862,322 Cardiovascular Diseases % of Total 1993 Cost ($1000) DIAGNOSTIC CATEGORY HOSPITAL CARE EXPENDITURE BY DIAGNOSTIC CATEGORY, CANADA, 1993 0.8 206,068 Female Cancers 1.1 274,621 Diabetes 1.1 283,106 Motor Vehicle Traffic Accidents 2.4 636,491 Chronic Bronchitis / Emphysema / Asthma 4.8 1,258,063 Stroke 6.0 1,571,999 Coronary Heart Disease SUBCATEGORY 100.0 26,096,300 TOTAL 3.2 844,567 Ill-defined Conditions 0.6 156,808 Blood Diseases 0.9 223,015 Skin and Related Diseases 0.9 231,923 Birth Defects 1.3 345,071 Infectious and Parasitic Dieseases 2.0 518,012 Perinatal Conditions 2.0 526,785 Endocrine and Related Diseases 3.0 792,862 Nervous System and Sense Organ Diseases 4.1 1,075,828 Genitourinary Diseases 4.9 1,285,910 Musculoskeletal Diseases 5.2 1,349,205 Well-patient Care 6.3 1,649,707 Pregnancy 6.9 1,788,230 Respiratory Diseases 8.0 2,093,374 Digestive Diseases 8.6 2,253,487 Injuries 9.5 2,467,408 Cancer 13.9 3,631,788 Mental Disorders 18.6 4,862,322 Cardiovascular Diseases % of Total 1993 Cost ($1000) DIAGNOSTIC CATEGORY HOSPITAL CARE EXPENDITURE BY DIAGNOSTIC CATEGORY, CANADA, 1993
  40. 40. Pharmacoeconomic analysis Properties Models Outcomes Issues
  41. 41. Pharmacoeconomic analysis <ul><li>Compare 2 or more options </li></ul><ul><ul><li>Need to identify, describe each </li></ul></ul><ul><ul><li>Usually a new drug trying to enter the market </li></ul></ul><ul><li>Requires an estimate for each of: </li></ul><ul><ul><li>Costs </li></ul></ul><ul><ul><li>Outcomes produced </li></ul></ul><ul><li>Other requirements: </li></ul><ul><ul><li>Analytic time horizon, perspective, discount rate(s) </li></ul></ul><ul><ul><li>Clinical consequences and their management </li></ul></ul>
  42. 42. Purpose of PEA <ul><li>Permission to market drug </li></ul><ul><ul><li>NOC in Canada </li></ul></ul><ul><ul><li>License in other countries </li></ul></ul><ul><li>Acceptance by formulary </li></ul><ul><ul><li>Provided by system (e.g., ODB) </li></ul></ul><ul><ul><li>Paid by insurer (in whole or in part) </li></ul></ul><ul><li>Purpose  model, approach </li></ul>
  43. 43. Approaches: licensure <ul><li>Population based model </li></ul><ul><li>Evidence = Efficacy data </li></ul><ul><ul><li>Data source = RCTs </li></ul></ul><ul><ul><ul><li>Assume full compliance, ideal conditions </li></ul></ul></ul><ul><ul><ul><li>Per protocol analysis </li></ul></ul></ul><ul><ul><ul><ul><li>Defined population </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Limited to eligible patients who take full treatment </li></ul></ul></ul></ul><ul><ul><li>Comparator = placebo, standard </li></ul></ul><ul><li>Viewpoint = societal </li></ul>
  44. 44. Approaches: formulary <ul><li>Meso (Group) model </li></ul><ul><li>Evidence = Effectiveness data </li></ul><ul><ul><li>Data source: </li></ul></ul><ul><ul><ul><li>Effectiveness trials </li></ul></ul></ul><ul><ul><ul><ul><li>Real life experience </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Unselected patients </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Compliance matters </li></ul></ul></ul></ul><ul><ul><ul><li>Model via RCT + other factors (adherence) </li></ul></ul></ul><ul><ul><ul><ul><li>Intent-to-treat analysis </li></ul></ul></ul></ul><ul><ul><ul><li>Population = all possible candidates </li></ul></ul></ul><ul><ul><li>Comparator = standard therapy </li></ul></ul><ul><li>Viewpoint = payer </li></ul>
  45. 45. Product <ul><li>Need to describe drug in detail </li></ul><ul><li>Identify therapeutic category </li></ul><ul><ul><li>ATC system </li></ul></ul><ul><li>Comparators </li></ul><ul><ul><li>What is being used now </li></ul></ul><ul><li>Utilization rates, costs, burden </li></ul><ul><li>Justify WHY this drug is being examined </li></ul>
  46. 46. Population <ul><li>Indication </li></ul><ul><ul><li>Disease </li></ul></ul><ul><ul><ul><li>How diagnosed, classified, e.g., ICD-10 </li></ul></ul></ul><ul><ul><li>Severity </li></ul></ul><ul><ul><ul><li>Mild, moderate, severe </li></ul></ul></ul><ul><li>Population </li></ul><ul><ul><li>Types of patients </li></ul></ul><ul><ul><ul><li>Males, females </li></ul></ul></ul><ul><ul><ul><li>Ages </li></ul></ul></ul>
  47. 47. Comparator <ul><li>Placebo </li></ul><ul><ul><li>Form identical to drug of interest </li></ul></ul><ul><ul><li>Do nothing alternative </li></ul></ul><ul><li>Standard therapy </li></ul><ul><ul><li>Guidelines </li></ul></ul><ul><ul><li>Actual practice </li></ul></ul><ul><ul><li>Expert panel </li></ul></ul><ul><li>Hospital setting: </li></ul><ul><ul><li>Usual treatment </li></ul></ul>
  48. 48. Pharmacoeconomic models <ul><li>Prospective </li></ul><ul><li>Retrospective </li></ul><ul><li>Predictive </li></ul>
  49. 49. Prospective models <ul><li>Pharmacoeconomic RCT </li></ul><ul><ul><li>Designed specifically for PEA </li></ul></ul><ul><li>Add-on to clinical RCT </li></ul><ul><ul><li>“Piggy-back” trials </li></ul></ul><ul><li>Collect data </li></ul><ul><ul><li>Identify resources used </li></ul></ul><ul><ul><li>Cost concurrently or later </li></ul></ul>
  50. 50. RCT advantages <ul><li>Prospective data collection </li></ul><ul><ul><li>Data are stochastic </li></ul></ul><ul><ul><ul><li>Can calculate Mean, SD </li></ul></ul></ul><ul><ul><li>All factors controlled </li></ul></ul><ul><ul><ul><li>“ Ideal” conditions </li></ul></ul></ul><ul><ul><ul><li>Provides efficacy data </li></ul></ul></ul><ul><li>Valid for NOC, licensing </li></ul><ul><li>Disadvantages: </li></ul><ul><li>Sample not representative </li></ul><ul><ul><li>Patients, conditions, drugs taken, age, sex, etc. </li></ul></ul><ul><li>Cannot extrapolate results to real life </li></ul>
  51. 51. Retrospective models <ul><li>Model existing RCT </li></ul><ul><li>Chart review </li></ul><ul><li>Database analysis </li></ul>
  52. 52. Modelling RCTs <ul><li>Easy to do </li></ul><ul><ul><li>Efficacy from trial </li></ul></ul><ul><ul><li>Determine costs </li></ul></ul><ul><li>Problems: </li></ul><ul><ul><li>Retrospective bias </li></ul></ul><ul><ul><li>Artificial conditions (extrapolation) </li></ul></ul><ul><ul><li>Requires expert input </li></ul></ul>
  53. 53. Chart Reviews <ul><li>Easy to do, not expensive (usually) </li></ul><ul><li>Problems: </li></ul><ul><ul><li>Time consuming </li></ul></ul><ul><ul><li>Missing data </li></ul></ul><ul><ul><ul><li>Outcomes </li></ul></ul></ul><ul><ul><ul><li>Resources used (not planned for) </li></ul></ul></ul><ul><ul><ul><li>Patients d/c, re-entry, move </li></ul></ul></ul>
  54. 54. Database Analyses <ul><li>Available, easy to use </li></ul><ul><li>Powerful - huge samples </li></ul><ul><li>Versatile: </li></ul><ul><ul><li>Cohort, case control, matching </li></ul></ul><ul><ul><li>Time series, cross sectional </li></ul></ul>
  55. 55. Disadvantages <ul><li>Missing data </li></ul><ul><ul><li>Diagnosis, outcomes, status (smoking, alcohol, etc) </li></ul></ul><ul><li>Confounding </li></ul><ul><li>Causation = ? </li></ul><ul><ul><li>Assumptions (Consumption, indication, compliance) </li></ul></ul><ul><li>Cost = large, delays long </li></ul>
  56. 56. Predictive decision models <ul><li>Most common model </li></ul><ul><li>Relatively easy to perform </li></ul><ul><ul><li>Software (TreeAge/Data ® ) </li></ul></ul><ul><li>Often require expert panel </li></ul><ul><li>Applies to “average” patient </li></ul><ul><li>Population based </li></ul>
  57. 57. Decision Types <ul><li>Decision tree </li></ul><ul><ul><li>Fixed time period </li></ul></ul><ul><ul><li>Non-recursive (one-way only) </li></ul></ul><ul><ul><li>All outcomes included </li></ul></ul><ul><li>Markov model </li></ul><ul><ul><li>Recursive model (can move backwards) </li></ul></ul><ul><ul><li>Cumulates values over time </li></ul></ul><ul><ul><li>Versatile </li></ul></ul>
  58. 58. Markov model EDSS 6-6.5 EDSS 5-5.5 EDSS 4-4.5 EDSS 3-3.5 EDSS 2-2.5 EDSS 0-1.5 Monosymptomatic Clinically Defined MS Second Event 1 st Year Transitions Expanded Disability Status Scale Iskedjian et al. Multiple Sclerosis 2005; 11: 542-51
  59. 59. Markov model Monosymptomatic EDSS 0-1.5 EDSS 2-2.5 EDSS 3-3.5 EDSS 4-4.5 EDSS 5-5.5 EDSS 6-6.5 Second Event Multiple Year Transitions Iskedjian et al. Multiple Sclerosis 2005; 11: 542-51
  60. 60. Base case analysis <ul><li>Identify what happens to the typical patient </li></ul><ul><ul><li>Number of treatments undergone </li></ul></ul><ul><ul><li>Components of each treatment </li></ul></ul><ul><ul><ul><li>Resources consumed </li></ul></ul></ul><ul><ul><li>What happens if success, fail, etc. </li></ul></ul>
  61. 61. Requirements for PEA <ul><li>Drug of interest </li></ul><ul><li>Comparator(s) </li></ul><ul><li>Measurements of both </li></ul><ul><ul><li>Success (and/or other) rates </li></ul></ul><ul><ul><li>Costs of inputs (in $) </li></ul></ul><ul><ul><li>Patient outcomes </li></ul></ul><ul><li>Outcomes expressed incrementally </li></ul>
  62. 62. Clinical efficacy <ul><li>Source of data </li></ul><ul><ul><li>RCT </li></ul></ul><ul><ul><ul><li>Head-to-head or Indirect </li></ul></ul></ul><ul><ul><li>Observational studies </li></ul></ul><ul><li>Type of data </li></ul><ul><ul><li>Intention to treat </li></ul></ul><ul><ul><li>Per protocol (completers) </li></ul></ul>
  63. 63. PEA types <ul><li>CCA = cost consequence analysis </li></ul><ul><li>CBA = cost benefit analysis </li></ul><ul><li>CMA = cost minimization </li></ul><ul><li>CEA = cost effectiveness </li></ul><ul><li>CUA = cost utility </li></ul>
  64. 64. Cost consequence (CCA) <ul><li>No summary statistic calculated </li></ul><ul><li>Costs valued in $ </li></ul><ul><li>Outcomes quantified and listed </li></ul><ul><li>Reader judges importance </li></ul><ul><li>Could be in every PEA </li></ul>
  65. 65. Cost benefit (CBA) <ul><li>Measurement: </li></ul><ul><ul><li>Costs – $ </li></ul></ul><ul><ul><li>Outcomes – $ </li></ul></ul><ul><li>Benefit: Cost ratio calculated </li></ul><ul><ul><li>B:C >1 socially beneficial </li></ul></ul><ul><li>Incremental ratio used </li></ul>
  66. 66. CBA example <ul><li>If a program costs $2000 and produces $5000 in benefits, as compared with the existing program costing $1000 with benefits of $2000, </li></ul><ul><li>Ratio 1 = $5000/$2000 = 2.5 </li></ul><ul><li>Ratio 2 = $2000/$1000 = 2.0 </li></ul><ul><li>Since ratio1:2 = 2.5/2.0 =1.25 >1, the new program produces more benefits and is preferred, if affordable </li></ul>
  67. 67. CBA <ul><li>Advantages: </li></ul><ul><ul><li>Theory based </li></ul></ul><ul><ul><li>Can use willingness to pay </li></ul></ul><ul><ul><ul><li>Contingent valuation </li></ul></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Valuations </li></ul></ul><ul><ul><ul><li>Intangibles (pain, suffering) </li></ul></ul></ul>
  68. 68. Cost minimization (CMA) <ul><li>All outcomes same </li></ul><ul><ul><li>Must be demonstrated </li></ul></ul><ul><li>Consider only costs </li></ul><ul><li>Decision rule: lowest cost is preferred choice </li></ul><ul><li>Example: gent vs tobra ?? </li></ul>
  69. 69. Cost-effectiveness (CEA) <ul><li>Costs = $ </li></ul><ul><li>Outcomes = natural units </li></ul><ul><ul><li>Cures, deaths avoided </li></ul></ul><ul><li>Intermediate outcomes </li></ul><ul><ul><li>Not desirable (need linkage) </li></ul></ul><ul><ul><li>e.g., Blood level (cholesterol) </li></ul></ul>
  70. 70. Cost utility (CUA) <ul><li>Cost = $ </li></ul><ul><li>Outcome = patient utility </li></ul><ul><li>QALY = quality adjusted life year </li></ul><ul><li>Assess quality of life  utility </li></ul><ul><li>Quantify and adjust by utility </li></ul><ul><li>Compare incrementally between drugs </li></ul>
  71. 71. Interpreting outcomes <ul><li>Incremental cost-outcome ratio: </li></ul><ul><li>Cost1 – Cost2 </li></ul><ul><li>__________________ </li></ul><ul><li>Benefit1 – Benefit 2 </li></ul>
  72. 72. Incremental analysis <ul><li>Compare costs and outcomes </li></ul><ul><li>Ideal = lower cost + better outcomes </li></ul><ul><li>Usual = more cost more outcome </li></ul><ul><li>Problem = assessment </li></ul>
  73. 73. Incremental CEA <ul><li>If cost lower + benefit greater = dominant </li></ul><ul><li>If incremental cost  cost/outcome, then CEA </li></ul><ul><li>If lower cost + lower outcome, could be OK </li></ul>
  74. 74. Interpretation of PEA results
  75. 75. Interpretation: Suggestion
  76. 76. CEA example <ul><li>New drug cost = $500, cure = 0.7 (70%) </li></ul><ul><li>Old drug cost $400, cure = 0.5 (50%) </li></ul><ul><li>ICER = ($500 - $400)/(0.7 – 0.5) = $500 per additional cure </li></ul><ul><li>Old drug cost $400/0.5 = $800/cure; therefore, the new drug is cost-effective and should be adopted, if it can be afforded </li></ul>
  77. 77. CEA example 2… <ul><li>New drug cost = $500, cure = 0.7 </li></ul><ul><li>Old drug cost $100, cure = 0.5 </li></ul><ul><li>ICER = ($500 - $100)/(0.7 – 0.5) </li></ul><ul><li>= $1,000 per additional cure </li></ul><ul><li>Requires judgment (no real rules) </li></ul>
  78. 78. CEA interpretation <ul><li>Dominant = adopt (if affordable) </li></ul><ul><li>If the incremental cost  cost/outcome of standard, then the new drug may be considered to be cost effective </li></ul><ul><li>Otherwise, judgment required </li></ul>
  79. 79. Summary <ul><li>PEA requires at least 1 drug and 1 comparison treatment </li></ul><ul><li>PEA involves simultaneous analysis of costs AND outcomes </li></ul><ul><li>Decision makers prefer dominant treatments – they provide savings; incremental cost-effectiveness involves increased costs </li></ul>
  80. 80. Trucha canadiense
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×