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  • Pharmacoeconomics1

    1. 1. RESEARCH PROCESS IN PHCA -PHARMACOECONOMICS <ul><ul><li>Jinender Kumar </li></ul></ul><ul><ul><li>MS Candidate, 2 nd Year (PHCA) </li></ul></ul>
    2. 2. <ul><li>Pharmacoeconomics Research </li></ul><ul><li>Uses of Pharmacoeconomics Research </li></ul><ul><li>Need for Pharmacoeconomics Research </li></ul><ul><li>Types of Pharmacoeconomics Research </li></ul><ul><li>Sensitivity Analysis </li></ul><ul><li>Discounting </li></ul><ul><li>Journals </li></ul><ul><li>References </li></ul>Preview
    3. 3. PHARMACOECONOMICS RESEARCH <ul><li>Sub-discipline of health economics </li></ul><ul><li>compares the costs (i.e resources consumed) and consequences (i.e economic, clinical and humanistic) of the drug therapies and medical interventions </li></ul><ul><li>PE analysis </li></ul><ul><ul><li>efficient allocation of limited resources among competing alternative medications and services </li></ul></ul><ul><ul><li>biggest bang for your buck </li></ul></ul>
    4. 4. VALUE Health Outcome Cost
    5. 5. USE OF PHARMACOECONOMIC RESEARCH <ul><li>Pharmaceutical reimbursement </li></ul><ul><li>Selecting formulary products </li></ul><ul><li>Price Negotiations </li></ul><ul><li>Clinical Practice Development guidelines </li></ul><ul><li>Communication to prescribing physicians </li></ul>
    6. 6. NEEDS TO MONITOR VALUE OF PHARMACEUTICALS <ul><li>Increased cost. </li></ul><ul><li>Increased number of alternatives available to treat illness and disease. </li></ul><ul><li>Growing demand for pharmaceuticals. </li></ul><ul><li>Introduction of high cost biotechnology products. </li></ul>
    7. 7. TYPES OF PHARMACOECONOMIC EVALUATION <ul><li>Cost-minimization analysis (CMA) </li></ul><ul><li>Cost-benefit analysis (CBA) </li></ul><ul><li>Cost-effectiveness analysis (CEA) </li></ul><ul><li>Cost-utility analysis (CUA) </li></ul><ul><li>Cost-consequence analysis (CCA) </li></ul>
    8. 8. COMPARING PHARMACOECONOMIC METHODOLOGIES <ul><li>METHODOLOGY </li></ul><ul><li>Cost-Minimization </li></ul><ul><li>Cost-Effectiveness </li></ul><ul><li>Cost-Benefit </li></ul><ul><li>Cost-Utility </li></ul><ul><li>Cost-Consequence </li></ul><ul><li>CONSEQUENCES </li></ul><ul><li>Natural Units </li></ul><ul><li>Natural Units </li></ul><ul><li>Dollars </li></ul><ul><li>Quality-Adjusted Life Years (QALYs) </li></ul><ul><li>Natural Units, Dollars or </li></ul><ul><li>QALYs </li></ul>
    9. 9. STEPS FOR CONDUCTING A PHARMACOECONOMIC EVALUATION <ul><li>Defining the problem and stating the objective. </li></ul><ul><li>Identifying the perspective and alternative interventions to be compared. </li></ul><ul><li>Identifying and measuring the outcomes of each alternative. </li></ul><ul><li>Identifying, measuring and valuing the costs of all alternatives. </li></ul>
    10. 10. DEFINE THE PROBLEM AND STATE THE OBJECTIVE <ul><li>All pharmacoeconomic evaluation should have a clear and concise statements of problem or question to be addressed. </li></ul><ul><li>E.g. </li></ul><ul><ul><li>What is the most cost-effective regimen for the treatment of type II diabetes? </li></ul></ul><ul><ul><li>To estimate the cost effectiveness of olanzapine and risperidone for the treatment of schizophrenia </li></ul></ul><ul><ul><li>Cost-Minimization Analysis of Once-Weekly Versus Thrice-Weekly Epoetin Alfa for Chemotherapy-Related Anemia </li></ul></ul>
    11. 11. PERSPECTIVE <ul><li>Point of view from which the study is taken </li></ul><ul><li>Determines what will be measured, what are the costs and benefits, and how they will be valued </li></ul><ul><li>Guides and limits application of study results </li></ul><ul><li>What are the possible perspectives in PE studies? </li></ul>
    12. 12. PERSPECTIVE <ul><li>Pharmacoeconomic evaluation can be conducted from several different perspectives including the employer, the patient, the health insurance plan, society, or the government. </li></ul>
    13. 13. IDENTIFYING ALTERNATIVE INTERVENTIONS <ul><li>Which alternative should be compared in pharmacoeconomic evaluation? </li></ul>
    14. 14. IDENTIFYING ALTERNATIVE INTERVENTIONS <ul><li>Alternatives should be compared only when one of the alternatives is either more costly or more effective. </li></ul>
    15. 15. IDENTIFY AND MEASURE OUTCOMES OF EACH ALTERNATIVE INTERVENTION <ul><li>Some of the outcomes of the treatment are: </li></ul><ul><li>A cure (health is restored) </li></ul><ul><li>Improved quality of life </li></ul><ul><li>Decreased incidence of morbidity </li></ul><ul><li>Extended life </li></ul><ul><li>Relief or reduction in symptoms </li></ul><ul><li>No effect </li></ul><ul><li>Increased morbidity </li></ul><ul><li>Mortality </li></ul>
    16. 16. OUTCOMES <ul><li>Both positive and negative outcomes should be addressed </li></ul><ul><li>Positive outcomes: drug’s efficacy measure </li></ul><ul><li>Negative outcomes: ADR and treatment failure </li></ul>
    17. 17. IDENTIFYING,MEASUREMENT AND VALUATION OF COSTS <ul><li>From the measurement aspect, two components are costs and consequences </li></ul><ul><li>Three important concepts related to costs are identifying, measuring, and placing a value on resources or costs. </li></ul>
    18. 18. IDENTIFYING RELEVANT COSTS <ul><li>What is cost? </li></ul><ul><li>How is cost different from price? </li></ul>
    19. 19. COSTS <ul><li>Direct costs : costs to deliver services to patient; both medical and non-medical </li></ul><ul><li>Indirect costs : cost of treatment to patient or society </li></ul><ul><li>Intangible costs : quality of life </li></ul>
    20. 20. Costs can be described in many ways <ul><li>Cost / unit (cost/tab, cost/vial) </li></ul><ul><li>Cost / treatment </li></ul><ul><li>Cost / person </li></ul><ul><li>Cost / person / year </li></ul><ul><li>Cost / case prevented </li></ul><ul><li>Cost / life saved </li></ul><ul><li>Cost / DALY (disability-adjusted life year) </li></ul>
    21. 21. MEASURING COSTS <ul><li>After cost identification the next step involves measuring the costs. </li></ul><ul><li>Measurement involves counts of resources consumed in units depending on the type of costs. </li></ul>
    22. 22. VALUING COSTS <ul><li>After cost measurement, the next step involves placing a dollar value on the resources. </li></ul>
    23. 23. SENSITIVITY ANALYSIS <ul><li>Test key outcome or cost assumption of an analysis to determine how sensitive the results are to variation or to uncertainty. </li></ul><ul><li>In pharmacoeconomic evaluations, the accuracy with which costs can be identified, measured, or valued will vary. </li></ul>
    24. 24. DISCOUNTING <ul><li>The purpose of discounting is to present all costs in their present value and to incorporate the society’s time preference for money. </li></ul><ul><li>Alternatives that have costs or benefits realized at different times should be discounted to a present value to make valid comparisons. </li></ul>
    25. 25. COST-MINIMIZATION ANALYSIS (CMA) <ul><li>CMA compares the cost and consequences of two or more therapeutic interventions that are equivalent in their outcomes or consequences. </li></ul><ul><li>E.g. </li></ul><ul><ul><li>Comparison between brand and generic drugs </li></ul></ul><ul><ul><li>Comparison of different routes of administration of the same drug </li></ul></ul><ul><ul><li>Comparison of different setting for the administration of the same drug therapy. </li></ul></ul><ul><ul><li>Comparison of different dosages of the same drug at different time points (OW vs. TIW) </li></ul></ul>
    26. 26. COST-MINIMIZATION ANALYSIS (CMA) <ul><li>The cost differences can be presented as average cost per patient or average cost of care if number of patients are same under each alternative </li></ul>
    27. 27. Cost-Minimization Analysis of Once-Weekly Versus Thrice-Weekly Epoetin Alfa for Chemotherapy-Related Anemia <ul><li>This study was published in JMCP in 2004. </li></ul><ul><li>The investigators main objective was to conduct a cost-minimization analysis comparing OW and TIW EPO dosing from a societal perspective. </li></ul><ul><li>Various Clinical studies have established the clinical equivalency between OW (40000 units) and TIW (10000 units) EPO dosing. </li></ul>
    28. 28. Cost-Minimization Analysis of Once-Weekly Versus Thrice-Weekly Epoetin Alfa for Chemotherapy-Related Anemia <ul><li>OW dosing requires additional 10000 units per week </li></ul><ul><li>The investigators compared the direct and indirect cost associated with OW and TIW EPO dosing by using the data from 2 large community based trials. </li></ul><ul><li>Resource utilization data was available in both studies for- EPO, transfusion, laboratory tests, office visits, and opportunity cost of patient time resources over the period during which the patient remained in the study. </li></ul><ul><li>Costs were calculated by applying cost estimates of specific procedures from the published literature. </li></ul>
    29. 29. Cost-Minimization Analysis of Once-Weekly Versus Thrice-Weekly Epoetin Alfa for Chemotherapy-Related Anemia <ul><li>Cost assumptions are provided in Table 5 </li></ul><ul><li>All cost are measure in 2002 US Dollars </li></ul><ul><li>Total costs, sensitivity analysis and the break points for statistically significant differences are shown in Table 6 </li></ul><ul><li>For OW dosing, transfusion, laboratory cost and time costs were lower than TIW dosing </li></ul><ul><li>The investigators did not consider the cost associated with the caregiver time and intangible cost of avoiding two painful injections each week. </li></ul>
    30. 30. COST-EFFECTIVENESS ANALYSIS (CEA) <ul><li>Most frequently used method </li></ul><ul><li>CEA is restricted to situations in which the outcomes of the alternative are measured on the same scale, such as mm Hg or serum cholesterol level. </li></ul><ul><li>CEA determines which alternative can achieve the best outcome at the lowest cost. </li></ul>
    31. 31. COST-EFFECTIVENESS ANALYSIS (CEA) <ul><li>The results of CEA are presented as the incremental ratio of costs to outcomes </li></ul>$43/ADDITIONAL SUCCESSFUL CASE TREATED $122/SUCCESFUL CASE 0.78 $95 C $260/ADDITIONAL SUCCESSFUL CASE TREATED $187/SUCCESFUL CASE 0.80 $150 B $155/SUCCESFUL CASE 0.55 $85 A ICER Average cost effectiveness ratio Outcome (Success rate) Average cost per patient Alternative
    32. 32. COST-BENEFIT ANALYSIS (CBA) <ul><li>CBA measures outcomes in dollars value </li></ul><ul><li>CBA include studies which are conducted to make decisions with a broad societal impact </li></ul><ul><li>E.g. </li></ul><ul><ul><li>Whether to fund immunization programs or implement child safety seat legislation (will help government decide which program to implement with limited budget) </li></ul></ul>
    33. 33. COST-BENEFIT ANALYSIS (CBA) <ul><li>Two most commonly used methods to determine cost benefits are Net benefit and Cost-to-benefit or benefit-to-cost ratio. </li></ul><ul><li>Net Benefit=Benefits-cost (for programs less than a year) </li></ul><ul><li>Benefit-to cost-ratio=Benefits/costs </li></ul>
    34. 34. COST-UTILITY ANALYSIS (CUA) <ul><li>CUA measures outcomes as lives saved </li></ul><ul><li>CUA measure both the quantity and quality aspects of gain in life years (adjusts the gain in life years for quality – measured as QALYs) </li></ul><ul><li>In CUA, life years are converted to QALY by applying a utility value (0-1) </li></ul><ul><ul><li>0-death, 1-perfect health </li></ul></ul><ul><ul><li>Most health states fall between these extremes </li></ul></ul>
    35. 35. COST-UTILITY ANALYSIS (CUA) <ul><li>CUA is often considered an extension of CEA </li></ul><ul><li>CEA measures Incremental cost effectiveness ratio (ICER) </li></ul><ul><li>CUA measures Incremental cost utility ratio (ICUR) </li></ul><ul><li>ICER=Additional cost of therapy/additional life years </li></ul><ul><li>ICUR= Additional cost of therapy/additional QALY </li></ul>
    36. 36. COST-CONSEQUENCE ANALYSIS (CCA) <ul><li>CCA presents all costs and effects in a disaggregated format </li></ul>- - - - Cases successfully treated - - - - Clinical - - -- - Quality of life (QALY) - - - - Consequences - - - - Productivity (lost days/episode) - - - - Caregiver time - - - - Indirect - - - - Transportation - - - - Direct Non Medical - - - - Hospitalizations - - - - Physician costs - - - - Drug therapy Costs Units Costs Units Direct Medical Drug B Drug A Cost (per Patient)
    37. 37. COST-CONSEQUENCE ANALYSIS (CCA) <ul><li>Decision makers can chose among the costs and outcomes that best fit their perspective </li></ul><ul><li>The advantages of CCA are its comprehensiveness and transparency for the decision makers </li></ul><ul><li>The disadvantages for the researchers are that they must identify, collect, and value cost and outcomes salient to a variety of perspectives. </li></ul>
    38. 38. JOURNALS <ul><li>Value in Health </li></ul><ul><li>Pharmacoeconomics </li></ul><ul><li>Health Economics </li></ul><ul><li>Pharmacoeconomics and Outcomes News </li></ul><ul><li>Clinical Therapeutics - Pharmaceutical Economics & Health Policy </li></ul><ul><li>Health Affairs (The Policy journal) </li></ul>
    39. 39. REFERENCES <ul><li> </li></ul><ul><li>Bootman JL, Townsend RJ, Mcghan WF. Principles of Pharmacoeconomics. 3 rd edition. Harvey Books Company. 2005. </li></ul><ul><li>McCArthy Rl, Schafermeyer KW. Introduction to Health Care Delivery. 3 rd edition. Jones and Barlett Publisher. 2004. </li></ul><ul><li>Bonk RJ. Pharmacoeconomics in Perspective:a primer on reseach, techniques and perspective. Pharmaceutical product press. 1999. </li></ul><ul><li>Rychlik R.Strategies and Pharmacoeconomics and Outcomes Research. Pharmaceutical Heritage Edition. 2003. </li></ul><ul><li>Vogenberg FR. Introduction to Applied Pharmacoeconomics. Mcgraw-Hill Publications. 2001. </li></ul>
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