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Pharmacoeconomics for
Non-Economists
Dr. (Amir)Hossein Hajimiri
President of ISPOR Student Chapter in Iran
Pharmacoeconomics and Pharmaceutical Administration Department
Tehran University of Medical Sciences
Prof. Lieven Annemans
Senior Full Professor Economics of Health and Wellbeing,
Ghent University
What Do We Do as
Health/Pharmacoeconomist?
It is all about Health
Also it is about Money
Reduction of Tobacco Use
Programs in School
Banners and
Advertisement
TV Programs
Medicines
Campaigns
…
Total Number of
Smokers
Reduced incidence
Reduction in cancers
Amount of cigarettes
Rate of COPD
…
Initiatives Outcomes
How do we Decide?!
How much to invest in Health?
Health Spending as a Share of GDP (%)
2015
2030
OECD, What Future for Health Spending. Economic Department Policy Note No. 19, 2015
Do we need to
increase investment on Health?
YES NO
WHY?
Life expectancy vs. Health expenditure
For each $ we invest, we have to gain max health for population
€ €€
Reeves from Oxford. Health Policy, March 2014
WHAT IS THE VALUE OF HEALTH?!
A high level of human health promotion shall be
ensured in all policies and activities.
WHO Health Promotion Milestones
Health is a state of complete physical,
mental and social well-being.
WHO Constitution
Hurdles in Evaluation
Types of Cost
Perspective of the Studies
Perspective is an economic term that describes whose costs are
relevant based on the purpose of the study
• Institutional
• Third party
• Patient(out of-pocket expenses, such as copayments, deductibles, lost wages, and transportation costs)
• Governmental
• Societal (costs to the insurance company, patient, other sector costs, and indirect costs because of the loss of productivity)
• How much money for one year of perfect health?
• 1500 EU citizens: 40,000 €
• 1002 Iranian (Tehran) : ~ 1000-2650 $ (0.22–0.56 of Iran’s
GDP/capita)
References:
Expert Review of Pharmacoeconomics & Outcomes Research, Volume 8, 6 (2008)
Cost Effectiveness and Resource Allocation, volume 17, 4 (2019)
QALY
A year of life lived in perfect health is worth 1 QALY (1 year of life × 1 Utility value).
Example Breast Cancer
Disease State Utility Level
Recurrence Free 0.78
Local Recurrence 0.78
Distant Recurrence (DR) 0.69
DR with Metastasis 0.60
Hall et al, Journal of the National Cancer Institute, 2012
How to Measure the “Utility Level”
• Direct
• VAS: Visual Analogue Scale
• SG: Standard Gamble
• TTO: Time Trade Off
• Indirect
• Generic: EuroQoL5D, SF36
• Disease Specific
Gaining QALYs
But at What Cost?
Value for Money
Incremental Cost-X Ratio (ICXR)
Where is the Threshold?
• Benchmarking
• WHO
Highly Cost-effective < 1 GDP per Capita
Cost-effective 1 GDP per Capita < ICER < 3 GDP per Capita
Not Cost-effective > 3 GDP per Capita
Reference: Bulletin of the World Health Organization 2015;93:118–124
Imagine a new TECHNOLOGY …
60,000 €
for a 2-year period of therapy
?
But …
• Economic evaluation should be used alongside
other considerations in a transparent decision-
making process, rather than isolation based on a
single threshold value.
Reference: Bull World Health Organ. 2016 Dec 1;94(12):925-930.
Multi-Criteria Decision Analysis
QALY +
More than QALY
Is a QALY a QALY?
• Which one do you prefer?
Nord E, The person-trade-off approach to valuing health care programs.
Med Decis Making. 1995 Jul-Sep;15(3):201-8
1
0
1.0
0.8
0.4
0.2
Same Life Exceptency
Same cost of drug
Same prevalence
1967; Changes in the Costs of Treatment of Selected Illnesses
1994; The high cost of dying
Social Reference Point
Rationalising rationing: economic and other considerations in the debate about funding of Viagra
Stolk et. Al, Volume 59, Issue 1, Pages 53-63, Health Policy 2002
“We conclude that Viagra is very cost-effective”
GOOD ICER; NOT FUNDED
Another Side!
• Variable Thresholds in the Netherlands:
Condition Threshold (per QALY)
End of life Up to 100,000
Severe condition 80,000
Moderate burden 50,000
Mild burden 20,000
Affordability
Budget Impact Analysis
Where to Draw the Line
Intervention $/QALY
GCSF in elderly with leukaemia 235,958
EPO in dialysis patients 139,623
Lung transplantation 100,957
ESRD management 53,513
Heart transplantation 46,775
Didronel in osteoporosis 32,047
PTA with stent 17,677
Short term inpatient psychotherapy 7,677
Breast cancer screening 5,147
Viagra 5,097
Treatment of congenital anorectal malformation 2,778
No. of patients Total Budget
400 94,383,200
800 111,698,400
30 3,028,710
450 24,080,850
50 2,338,750
1000 32,047,000
600 10,606,200
450 3,454,650
5000 25,735,000
5000 25,485,000
30 83,340
Treatment of congenital anorectal malformation 2,778 30 83,340
Heart transplantation 46,775 50 2,338,750
Lung transplantation 100,957 30 3,028,710
Short term inpatient psychotherapy 7,677 450 3,454,650
PTA with stent 17,677 600 10,606,200
ESRD management 53,513 450 24,080,850
Viagra 5,097 5000 25,485,000
Breast cancer screening 5,147 5000 25,735,000
Didronel in osteoporosis 32,047 1000 32,047,000
GCSF in elderly with leukaemia 235,958 400 94,383,200
EPO in dialysis patients 139,623 800 111,698,400
It is all about Health
Also it is about Money
Essentials of Pharmaco economics for Non Economists
Essentials of Pharmaco economics for Non Economists
Essentials of Pharmaco economics for Non Economists
Essentials of Pharmaco economics for Non Economists

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Essentials of Pharmaco economics for Non Economists

  • 1. Pharmacoeconomics for Non-Economists Dr. (Amir)Hossein Hajimiri President of ISPOR Student Chapter in Iran Pharmacoeconomics and Pharmaceutical Administration Department Tehran University of Medical Sciences
  • 2. Prof. Lieven Annemans Senior Full Professor Economics of Health and Wellbeing, Ghent University
  • 3. What Do We Do as Health/Pharmacoeconomist?
  • 4.
  • 5. It is all about Health Also it is about Money
  • 6.
  • 7. Reduction of Tobacco Use Programs in School Banners and Advertisement TV Programs Medicines Campaigns … Total Number of Smokers Reduced incidence Reduction in cancers Amount of cigarettes Rate of COPD … Initiatives Outcomes
  • 8. How do we Decide?! How much to invest in Health?
  • 9. Health Spending as a Share of GDP (%) 2015 2030
  • 10. OECD, What Future for Health Spending. Economic Department Policy Note No. 19, 2015
  • 11. Do we need to increase investment on Health? YES NO WHY?
  • 12. Life expectancy vs. Health expenditure
  • 13. For each $ we invest, we have to gain max health for population € €€ Reeves from Oxford. Health Policy, March 2014
  • 14. WHAT IS THE VALUE OF HEALTH?!
  • 15. A high level of human health promotion shall be ensured in all policies and activities. WHO Health Promotion Milestones Health is a state of complete physical, mental and social well-being. WHO Constitution
  • 18. Perspective of the Studies Perspective is an economic term that describes whose costs are relevant based on the purpose of the study • Institutional • Third party • Patient(out of-pocket expenses, such as copayments, deductibles, lost wages, and transportation costs) • Governmental • Societal (costs to the insurance company, patient, other sector costs, and indirect costs because of the loss of productivity)
  • 19. • How much money for one year of perfect health? • 1500 EU citizens: 40,000 € • 1002 Iranian (Tehran) : ~ 1000-2650 $ (0.22–0.56 of Iran’s GDP/capita) References: Expert Review of Pharmacoeconomics & Outcomes Research, Volume 8, 6 (2008) Cost Effectiveness and Resource Allocation, volume 17, 4 (2019)
  • 20. QALY A year of life lived in perfect health is worth 1 QALY (1 year of life × 1 Utility value).
  • 21. Example Breast Cancer Disease State Utility Level Recurrence Free 0.78 Local Recurrence 0.78 Distant Recurrence (DR) 0.69 DR with Metastasis 0.60 Hall et al, Journal of the National Cancer Institute, 2012
  • 22. How to Measure the “Utility Level” • Direct • VAS: Visual Analogue Scale • SG: Standard Gamble • TTO: Time Trade Off • Indirect • Generic: EuroQoL5D, SF36 • Disease Specific
  • 23.
  • 24.
  • 25. Gaining QALYs But at What Cost?
  • 27.
  • 29. Where is the Threshold? • Benchmarking • WHO Highly Cost-effective < 1 GDP per Capita Cost-effective 1 GDP per Capita < ICER < 3 GDP per Capita Not Cost-effective > 3 GDP per Capita Reference: Bulletin of the World Health Organization 2015;93:118–124
  • 30. Imagine a new TECHNOLOGY … 60,000 € for a 2-year period of therapy ?
  • 31.
  • 32. But … • Economic evaluation should be used alongside other considerations in a transparent decision- making process, rather than isolation based on a single threshold value. Reference: Bull World Health Organ. 2016 Dec 1;94(12):925-930.
  • 35. Is a QALY a QALY? • Which one do you prefer? Nord E, The person-trade-off approach to valuing health care programs. Med Decis Making. 1995 Jul-Sep;15(3):201-8 1 0 1.0 0.8 0.4 0.2 Same Life Exceptency Same cost of drug Same prevalence
  • 36. 1967; Changes in the Costs of Treatment of Selected Illnesses 1994; The high cost of dying
  • 37. Social Reference Point Rationalising rationing: economic and other considerations in the debate about funding of Viagra Stolk et. Al, Volume 59, Issue 1, Pages 53-63, Health Policy 2002
  • 38. “We conclude that Viagra is very cost-effective” GOOD ICER; NOT FUNDED
  • 39. Another Side! • Variable Thresholds in the Netherlands: Condition Threshold (per QALY) End of life Up to 100,000 Severe condition 80,000 Moderate burden 50,000 Mild burden 20,000
  • 40.
  • 42. Intervention $/QALY GCSF in elderly with leukaemia 235,958 EPO in dialysis patients 139,623 Lung transplantation 100,957 ESRD management 53,513 Heart transplantation 46,775 Didronel in osteoporosis 32,047 PTA with stent 17,677 Short term inpatient psychotherapy 7,677 Breast cancer screening 5,147 Viagra 5,097 Treatment of congenital anorectal malformation 2,778 No. of patients Total Budget 400 94,383,200 800 111,698,400 30 3,028,710 450 24,080,850 50 2,338,750 1000 32,047,000 600 10,606,200 450 3,454,650 5000 25,735,000 5000 25,485,000 30 83,340 Treatment of congenital anorectal malformation 2,778 30 83,340 Heart transplantation 46,775 50 2,338,750 Lung transplantation 100,957 30 3,028,710 Short term inpatient psychotherapy 7,677 450 3,454,650 PTA with stent 17,677 600 10,606,200 ESRD management 53,513 450 24,080,850 Viagra 5,097 5000 25,485,000 Breast cancer screening 5,147 5000 25,735,000 Didronel in osteoporosis 32,047 1000 32,047,000 GCSF in elderly with leukaemia 235,958 400 94,383,200 EPO in dialysis patients 139,623 800 111,698,400
  • 43.
  • 44. It is all about Health Also it is about Money