The document discusses pharmacoeconomics and pharmacoepidemiology. It defines pharmacoeconomics as the scientific discipline concerned with the cost and value of drugs, often with the goal of optimizing health care resource allocation. Pharmacoepidemiology is defined as the study of medication use and effects in large populations, applying epidemiological knowledge and methods. The document outlines the objectives, basic equations, types of economic analyses including cost-minimization, cost-effectiveness, cost-benefit, and cost-utility analyses. It also discusses the importance of economic evaluations in clinical decision making and resource allocation.
4. Pharmacoeconomics is a scientific discipline concerned
with the cost and value of drugs, often with the goal of
optimizing the allocation of health care resources.
5. Definition
“The field of study that evaluates the behaviour of
individuals, firms, and markets relevant to the use of
pharmaceutical products, services, and programs, and
which frequently focuses on the costs (inputs) and
consequences (Outcomes) of that use”
-ISPOR
6. Need And Scope
• Healthcare in India - easy availability and
affordability for the patient
• Responsibility of the caregivers
– maximize the beneficial outcomes
– minimize the financial burden
– increase humanistic outcome goals
7. Need And Scope
• To find the optimal therapy at the lowest price.
• In Industry- To decide among specific research and
development alternatives.
• In Government- To determine program benefits and prices
paid.
• In Private Sector- To design insurance benefit coverage
9. Basic pharmacoeconomic equation
– Left hand side of equation - cost analysis (or a
partial economic analysis)
– Right hand side of equation -clinical or health
outcome study
COSTS(₹) OUTCOMESRX
11. The Pharmaconomic Data
– Evaluation Of Pharmacoeconomic Data Along Side Clinical
Trial
– Naturalistic Pharmacoeconomic Study
– Economic Modelling On The Basis Of Prospectively
Collected Clinical Trial
12. Economic value of a new medicine
= +
COMPARATOR
VALUE
DIFFERENTIAL
VALUE
( savings , clinical
benefits , survival
/Quality of Life
benefits , value in
use )
ECONOMIC
VALUE
13. Evaluations from a
pharmacoeconomic perspective
COSTS(₹) OUTCOMESRX
Evaluation of
cost of
treatment
Evaluation of
health outcome
after treatment
14. Costs From A Pharmacoeconomic
Evaluation Perspective :
• Direct Medical costs
• Direct Non Medical cost
• Indirect cost
• Intangible costs
15. Examples of type of costs
Direct Medical
cost
Medications ( monitoring , administration)
Diagnostic tests
Clinic visits
Nursing services
Ambulance services
Emergency department visits
Hospitalizations
Direct Non
Medical cost
Travel costs to receive health care (bus, gas, taxi)
Nonmedical assistance related to condition (e.g.,
Meals-on-Wheels, homemaking services)
Hotel stays for patient or family for out-of-town
care
16. Examples of type of costs
Indirect cost Lost productivity for patient
Lost productivity for unpaid caregiver (e.g., family
member, neighbour, friend)
Lost productivity because of premature mortality
Intangible
costs
Pain and suffering
Fatigue
Anxiety
17. The Outcome Measurement
• Final health outcome considered as the effectiveness
measure
• If health outcome are multidimensional
– Result outcomes adjusted in a single index using health
utilities
– QALYs , Health year equivalent
18. Outcomes
• Clinical -Cure, comfort and survival
• Humanistic -Physical, emotional, social function, role
performance
• Economic -Expense, saving, cost avoidance
19. Types Of Pharmacoeconomic Studies
Based On Health Gain Outcome
• Four basic types
– Cost- Minimization Analysis (CMA)
– Cost –Effectiveness Analysis (CEA)
– Cost – Benefit Analysis (CBA)
– Cost – Utility Analysis (CUA)
20. Cost Minimization Analysis
• Simplest
• Outcomes - assumed to be equivalent
• Only costs of intervention compared
• Cannot be used when
– outcomes of intervention are expected to be different
21. TYPES OF PHARMACOECONOMIC STUDIES BASED ON HEALTH
GAIN OUTCOMES
METHODOLOGY COST
MEASUREMENT
UNIT
OUTCOME
MEASUREMENT
UNIT
Cost- Minimization
Analysis (CMA)
Rupees or
Monetary units
Assumed to be
equivalent in
comparable groups
COSTS(₹) OUTCOMES
22. Cost Effectiveness Analysis
• Outcome - natural units
• Outcomes easier to quantify
• Programs with different types of outcome can
not be compared
23. Cost Effectiveness Analysis
Two types
– Average cost-effectiveness ratio (ACER)
= Total health care costs (₹) ÷ clinical outcomes(not in ₹ )
– Incremental cost-effectiveness ratio (ICER )
= COST (A)- COST (B)(₹) ÷ Effectiveness A(%) -
Effectiveness B(%)
24. TYPES OF PHARMACOECONOMIC STUDIES BASED ON HEALTH
GAIN OUTCOMES
METHODOLOGY COST
MEASUREMENT
UNIT
OUTCOME
MEASUREMENT
UNIT
Cost –Effectiveness
Analysis (CEA)
Rupees or
Monetary units
Natural units (no of
life years gained ,
mm Hg B.P. ,
mMol /L of blood
sugar
COSTS(₹) OUTCOMES
25. Cost Utility Analysis
• Outcomes -years of life that are adjusted by “utility”
weights
• Range from 1.0 for “perfect health” to 0.0 for “dead”
• There are no consensus how to measure the utility
weights
• C:U Ratio = COST÷ QALY gained
26. TYPES OF PHARMACOECONOMIC STUDIES BASED ON HEALTH
GAIN OUTCOMES :
METHODOLOGY COST
MEASUREMENT
UNIT
OUTCOME
MEASUREMENT
UNIT
Cost – Utility
Analysis (CUA)
Rupees or
Monetary units
Quality adjusted life
years (QALYs) or
other utilities
COSTS(₹) OUTCOMES
27. Cost Benefit Analysis
• Both cost and benefits -monetary units
• Two major advantages
– advantages of implementation of treatment plan can be
determined
– Multiple programs can be compared
• Difficult to place monetary values on health
outcomes
28. TYPES OF PHARMACOECONOMIC STUDIES BASED ON HEALTH
GAIN OUTCOMES
METHODOLOGY COST
MEASUREMENT
UNIT
OUTCOME
MEASUREMENT
UNIT
Cost – Benefit
Analysis (CBA)
Rupees or
Monetary units
Rupees or
Monetary units
COSTS(₹) OUTCOMES
29. Other Types Of Analysis
• Cost Sequence Analysis
– Lists of costs and various outcomes presented
– No direct calculation or comparison between interventions
30. Other Types Of Analysis
• Cost Of Illness Analysis :
– Total economic burden (including prevention , treatment ,
losses caused by morbidity and mortality )
– May be direct costs or indirect costs
31. Importance Of Economic Evaluation
In setting up guidelines
Amending existing policies
Aiding clinical decision making
Resource allocation becomes more authentic
Develop effective, efficacious and available treatment to the
intended population.
To lessen health expenditures
32. Examples of pharmacoeconomic
studies
• To investigate the cost-effectiveness
– administering tranexamic acid (TXA) for the
treatment of significant haemorrhage following
trauma
• Early administration (within 3 hours) of TXA
would cost $ 66 (4837 ₹ )per LY saved in India
33. • Cost- Effectiveness of Preventing AIDS
Complications
• 3- month course of isoniazid plus rifampin and
a 6-month course of isoniazid
• Both decrease TB incidences in HIV patients
34. Conclusion
• Time and money can only be spent once- choice is
inevitable
• Pharmacoeconomics can enhance the quality of
practice by strengthening evaluation process and
increasing the probability that deliver better value in
patient care
36. Definition
The study of the use and effects of medication in
large number of people
The application of epidemiologic knowledge ,
methods and reasoning to the reasoning of the
effects (beneficial and adverse) and use of drugs
in human populations
38. Pharmacoepidemiological Research
• Pharmacoepidemiological studies focus on
– Global trends in prescribing
– Medication adherence
– Lifestyle effects on drug therapy
– Special population (Elderly, Pediatric, etc.) drug
therapy
– Drug Interactions
– Predictable ,uncommon and unpredictable ADRs
42. Summary
• Pharmacoeconomics provide the means to
quantify the value of pharmacotherapy
through balancing costs and outcomes
• Healthcare professionals will be prepared to
make better, more informed decisions
regarding the use of pharmaceutical products
and services.
43. TYPES OF PHARMACOECONOMIC STUDIES BASED ON HEALTH GAIN
OUTCOMES
METHODOLOGY COST
MEASUREMENT
UNIT
OUTCOME
MEASUREMENT UNIT
Cost- Minimization
Analysis (CMA)
Rupees or
Monetary units
Assumed to be equivalent
in comparable groups
Cost –Effectiveness
Analysis (CEA)
Rupees or
Monetary units
Natural units (no of life
years gained , mm Hg B.P. ,
mMol /L of blood sugar
Cost – Benefit
Analysis (CBA)
Rupees or
Monetary units
Rupees or Monetary units
Cost – Utility
Analysis (CUA)
Rupees or
Monetary units
Quality adjusted life years
(QALYs) or other utilities
44. Summary
• Information about drug safety and
effectiveness that is not available from pre-
marketing studies
• Pharmacoepidemiology is a field, bridging
between clinical pharmacology and
epidemiology
45. Summary
• From clinical pharmacology - focus of inquiry
• From epidemiology - methods of
inquiry
It compare the cost of various drugs with the outcomes, such as benefits of patients receiving the drugs and costs.
Over the last decade there has been tremendous interest in economic evaluations of healthcare programmes, especially in the pharmaceutical field.
Healthcare in developing countries including India is not solely driven by the best treatment option but by the easy availability and affordability for the patient .
The responsibility and the difficulty of the caregivers thereby increases as to maximize the beneficial outcomes and minimize the financial burden and increase humanistic outcome goals
Healthcare in developing countries including India is not solely driven by the best treatment option but by the easy availability and affordability for the patient .
The responsibility and the difficulty of the caregivers thereby increases as to maximize the beneficial outcomes and minimize the financial burden and increase humanistic outcome goals
The pharmacoeconomic evaluations can be classified according to the mode of data collection :
The economic value of a new medicine is calculated based on the comparator price and differential value . The comparator value is the price of the standard therapy /regimen prevailing in the present healthcare
Costs can be categorized broadly as Direct medical cost , Indirect medical cost , Indirect costs , Intangible costs
Calculation of these costs takes into consideration various expenditure made during the course of illness and loss of income due to abstinence from work or decrease of productivity.
Direct Costs : costs which are incurred for medical products or services used in prevention ,detection or treatment of the disease .
Direct Non Medical Costs : Non medical services that are results of illness , but do not involve purchasing medical services .
Indirect Non Medical Costs : costs of reduced productivity .
Intangible Costs : costs of pain, suffering, anxiety, or fatigue that occurs because of an illness or the treatment of an illness
Most of the economic evaluation guidelines,such as that of the ISPOR and the Dutch Health Care Insurance Board, are intended to be used for clinical studies and focus on measuring health(i.e. ,QALYs) as the main (or sometimes only)outcome measure of interest
Simplest to conduct
Outcomes are assumed to be equivalent
Only the costs of the intervention is compared
Cannot be used when outcomes of intervention are expected to be different
Outcomes easier to quantify as compared to CUA OR CBA
The average cost-effectiveness ratio (ACER) is the ratio of the cost to benefit of an intervention without reference to a comparator
The incremental cost-effectiveness ratio (ICER) is a statistic used in cost-effectiveness analysis to summarise the cost-effectiveness of a health care intervention. It is defined by the difference in cost between two possible interventions, divided by the difference in their effect
Measures the number of years of life gained by the treatment
Rough estimate
Both cost and benefits are valued in monetary units.
Measuring both cost and benefits in monetary units has two major advantages
Firstly the healthcare professionals can determine the effectiveness of the treatment and determine the advantages of implementation of that treatment plan
Multiple programs can be compared for their effectiveness irrespective of similar or different outcomes.
But it is difficult to place monetary values on health outcomes.
Direct Costs : costs which are incurred for medical products or services used in prevention ,detection or treatment of the disease .
Direct Non Medical Costs : Non medical services that are results of illness , but do not involve purchasing medical services .
Indirect Non Medical Costs : costs of reduced productivity .
Intangible Costs : costs of pain, suffering, anxiety, or fatigue that occurs because of an illness or the treatment of an illness
Direct Costs : costs which are incurred for medical products or services used in prevention ,detection or treatment of the disease .
Direct Non Medical Costs : Non medical services that are results of illness , but do not involve purchasing medical services .
Indirect Non Medical Costs : costs of reduced productivity .
Intangible Costs : costs of pain, suffering, anxiety, or fatigue that occurs because of an illness or the treatment of an illness
Direct Costs : costs which are incurred for medical products or services used in prevention ,detection or treatment of the disease .
Direct Non Medical Costs : Non medical services that are results of illness , but do not involve purchasing medical services .
Indirect Non Medical Costs : costs of reduced productivity .
Intangible Costs : costs of pain, suffering, anxiety, or fatigue that occurs because of an illness or the treatment of an illness
Direct Costs : costs which are incurred for medical products or services used in prevention ,detection or treatment of the disease .
Direct Non Medical Costs : Non medical services that are results of illness , but do not involve purchasing medical services .
Indirect Non Medical Costs : costs of reduced productivity .
Intangible Costs : costs of pain, suffering, anxiety, or fatigue that occurs because of an illness or the treatment of an illness
An economic analysis is a guide to better investment to obtain a better health value. Developing countries like India where government does not hold the responsibility for health insurance or any scheme covering expenditure of the health expenditure. Surveys indicate that Indians spend most of their income for fooding or secondly for purchasing medications. Inflation is beating the income hikes in an average earning individual’s life where health expenditure is on bargain.
an economic evaluation was carried out to investigate the cost-effectiveness of administering tranexamic acid (TXA) for the treatment of significant haemorrhage following trauma in India, Tanzania, and the United Kingdom. The LYs gained were estimated from a simple Markov model. The study showed that early administration of TXA to bleeding trauma patients is likely to be highly cost-effective in low, middle and high-income settings. Early administration (within 3 hours) of TXA would cost $ 66 per LY saved in India. However, it was important to demonstrate that it was likely to be cost-effective in countries with much more limited health care budgets, such as Tanzania and India where because of the high number of trauma victims this simple intervention can avert thousands of deaths every year
A study from South India used the Cost- Effectiveness of Preventing AIDS Complications International model, a computer-based, state transition model of HIV and TB combined with data of a clinical trial from the National Institute for Research in Tuberculosis. The analysis showed that a 3- month course of isoniazid plus rifampin and a 6-month course of isoniazid alone both decrease TB incidences in HIV patients. The therapy also came out to be cost –effective by WHO criteria