This document provides an overview of pharmacoeconomics. It discusses the history and basics, including definitions of key terms like QALY. Methods of pharmacoeconomic evaluation are outlined, including cost-minimization analysis, cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. Challenges in pharmacoeconomic evaluations are also summarized, such as the need for training and standardization of methods.

1. BASICS OF
PHARMACOECONOMICS
By Dr Ketan Asawalle
JR1,Dept. of Pharmacology
SVNGMC Yavatmal

2. SCOPE OF
PRESENTATION
1. Introduction
2. Brief History
3. Challenges

3. SCOPE OF
PRESENTATION
Pharmacoeconomic Evaluation
5. Methods for Evaluation
6. Assessment of Results

4. SCOPE OF
PRESENTATION
7. Limitations of Evaluation
8. Summary

5. HISTORY

6. evaluations in the field of pharmacology started parameters were used to evaluate e.g. increased PHARMACOECONOMICS was used on a public forum

7. INTRODUCTION

8. • Who Pays for medical bills ?
1.Government
2.Insurance Companies

9. This NEVER
Happens

10. This ALWAYS happens

11. Funders try to make efforts to contain By
• Price negotiations
• Patient co-payments
• Dedicated Drug Bills

12. WHAT IS A DRUG
BILL?

14. various policies of that government that it that particular country has allotted for

15. the health care bill is 10 to 15% of Indian health care budget was 1.04% In 2014 it is proposed to touch 2.5%

16. study all these aspects in order to achieve POSSIBLE ALONG WITH PROVIDING

17. VERY FIRST aspect of controlling drug EVALUATION OF EXPENDITURE OF DRUG

18. REASONS for EVALUATION
Size of drug bill
Easy to measure pharmaceutical costs
Evidence of wasteful prescribing
Perception that drug companies work for profits

19. DEFINITION

20. PHARMACOECONOMICS
cost-minimization, cost-of-illness and

21. and methodology of HEALTH

22. of techniques used in health

23. analysis of the costs of drug

24. BASIC USES

25. • Make formulary decisions
Design disease management programs
cost- effectiveness of interventions

26. NEED FOR
PHARMACOECONOMICS

27. Determining programme benefits and prices INDUSTRY
among specific research and development GOVERNMENT
PRIVATE SECTOR
Determining the insurance benefit

28. COMMON MAN

29. expenditures have led to the necessity to find the optimal therapy Pharmaceutical expenditure has increased dramatically
Numerous alternatives for the same disease/condition
Increasing costs of health care products

30. IMPORTANT
TERMS

31. PRO i.e. PATIENT REPORTED OUTCOME
HRQL i.e. HEALTH RELATED QUALITY OF LIFE
QALY i.e. QUALITY ADJUSTED LIFE YEARS

32. PATIENT REPORTED OUTCOME (PRO)
Measured by self-reported questioners
patients own viewpoint about the new product

33. HEALTH RELATED QUALITY OF HRQL) is an individual's satisfaction

34. dimension of health (e.g., a disease or

35. The quality-adjusted life year QALY
disease burden, including both the quality and the number of years of life that would be added by

36. CHALLENGES

37. Training and education in ANALYSIS of DATA
Standardizing the methods and establishing GUIDELINES CONTINUED EDUCATION on relevant features
Stable FUNDS

38. PHARMACO-ECONOMIC
EVALUATION

40. ISSUES
INPUT
COSTS PERSPECTIVES
HEALTH CARE
OUTCOME

41. PERSPECTIVE
about from whose point of view the evaluation Two Types
1. Health Service Perspective
2. Societal Perspective

42. the health mangers facing problem of low Health service perspective contains direct cost
Societal perspective contains indirect cost

43. COSTS
Two main types
Financial costs=Mandatory costs
Economic costs=Non mandatory costs
foregone when selecting one therapy alternative

44. MEASUREMENT OF COST
1.cost/unit (cost/tablet, cost/vail)
2.cost/treatment
3.cost/person
4.cost/person/year
5.cost/case prevented
6.cost/life saved
7.cost/DALY

45. OUTCOME
alternative drug therapies on disease progression, POSITIVE and NEGATIVE outcomes are to be considered
Positive outcomes = Drug Efficacy
outcomes = Side Effects, Treatment failure and Drug

46. METHODS OF
PHARMACO-ECONOMIC
EVALUATION

48. COST-MINIMIZATION
ANALYSIS

49. • Measures only costs
• Mainly of Health Services
outcomes are identical and need not be

50. EXAMPLE
prescriptions containing generic drug and leading Amoxicillin-clavulenic acid and Augmentin

51. is to project the least costly drug or treatment Reflects cost of preparing and administering a

53. COST-EFFECTIVENESS
ANALYSIS

55. defined and measured in natural units (

56. costs and outcomes (effects) of two or Assigns a monetary value to the measure of CEA is
Cost associated with health measure
Gain of health from a measure

57. with qualitatively similar outcomes in a particular QALY is the most common outcome measure

58. patient relieved of symptoms using EXAMPLE

59. COST-UTILITY
ANALYSIS

60. Similar to Cost-effectiveness analysis
Costs are measured in Money
Outcome is Defined
Outcome is a Unit of Utility e.g. QALY

61. disease is not directly dependent in look into more than one area of medicine

62. bypass grafting versus cost per QAL EXAMPLE

64. difficult than measuring the monetary value of life the health improvement effects for every remaining DRAWBACK

65. COST-BENEFIT
ANALYSIS

66. measured as the associated economic benefit
monetary value of returning a worker to employment costs and benefits are expressed in money

67. to be made between very different areas, education and hence productivity) compared to establishing

68. very important benefits not measurable in in whom a return to productive employment DRAWBACKS

69. SUMMARY

70. RESULTS OF
EVALUATION

71. FOUR POSSIBILITIES
New treatment is
More effective and more expensive
More effective less expensive
Less effective less expensive
Less effective more expensive

72. RESULTS OF ECONOMIC EVALUATION
I
IV
III II

73. case in which only TWO treatment regimens or multiple regimens are considered

74. Beta Slope

75. MARKOV’S POPULATION TREE FOR DECISION METHODS OF DECISION MAKING
NEEDED TO TREAT/NUMBER NEEDE

76. LIMITATIONS

77. BIAS

78. • Choice of comparator drug
• The assumptions made
• Selective reporting of results

79. WHY IS THIS BIAS?

80. less well understood by doctors and others, with rationing or cost cutting, and therefore

81. MAIN PROBLEMS
• A short term outlook
operate in isolation, and it is not easy to move money may simply not be affordable no matter how cost • Young sciences
• Need of proper guidelines

82. THANK YOU

83. REFERENCES
1. A Practical Guide To Clinical Audit, Quality and Patient Safety(QPSD-D-029-1 V.1)
2 Pharmacoeconomics: basic concepts and terminology T. Walley & A. Haycox (Department of Pharmacology 3. Pharmacoeconomics and Economic Evaluation of Drug Therapies Tom Walley, M.D. (Professor of Clinical 4. PHARMACOECONOMICS: A REVIEW SURENDRA G. GATTANI, Department of Pharmaceutics, R.C.ABASAHEB B. PATIL, Lecturer Department of Pharmaceutics , R.C.P.E.R. Malegaon,
SACHIN S. KUSHARE, Department of Pharmaceutics R.C.Patel college of Pharmacy, Shirpur
5. THE THEORY OF COST-BENEFIT ANALYSIS JEAN DREZE AND NICHOLAS STERN (London School 6. DRUG UTILIZATION AND THERAPEUTIC AUDIT, British journal of clinical pharmacology (1980), 9,