PHDR 423 Pharmacoeconomics Lecture Notes PDF

Introduction PHDR 423 - Pharmacoeconomics  Designed to prepare pharmacists who can competently involve in Introduction about the pharmacoeconomic decision making. course Includes the application of economic...

Introduction PHDR 423 - Pharmacoeconomics  Designed to prepare pharmacists who can competently involve in Introduction about the pharmacoeconomic decision making. course Includes the application of economic principles and theories to the provision of cost-effective pharmaceutical products and services that efficiently optimize patient-care outcomes.  Objectives Introduction to the fundamental methods of Pharmacoeconomic analysis Allow to understand, interpret and determine the usefulness of pharmacoeconomy based on the concept and types of costs. RESOURCES Required textbook  Introduction to Pharmacoeconomics Objectives § Define pharmacoeconomics § Understand the importance and clinical relevancy of PE § Understand the relationship of PE to other disciplines § List and describe the differences between the four most common types of pharmacoeconomics studies  Group Discussion §What does Pharmacoeconomic mean to you? §Why we use it? §What do you think some of its application? §Why should a health care professional (or pharmacists) learn about pharmacoeconomics? Question to be answer.. §Should a new drug be listed on the formulary §What is the cost per QALY by a drug? §Will patient quality of life be improve by a particular drug therapy? §How do two clinical pharmacy service compare? Global healthcare expenditures Globally, there is an increasing demand for health care services and technologies accompanied by limited resources Healthcare spending continued to increase dramatically In 2014, $9·21 trillion was spent on health worldwide. In 2030, $16·04 trillion will be spent on health. In 2040, $24·24 trillion will be spent on health Global healthcare expenditures  Health Costs Figures (Saudi Arabia) In Saudi Arabia, budget allocations for medications and drug products have increased sharply over recent years, with a greater % of health care costs devoted to providing medications. Payment for drug products and pharmaceuticals constitutes 17% of total health care costs. Source: CLINICAL THERAPEUTICS, VOL. 25, NO. 4, 2003  Health Costs in Saudi Arabia The compound annual growth rate (CAGR) http://www.csc.org.sa/Arabic/NationalCommittees/NationalCommitteesList/Comm12/Documents/Collier%20Study.pdf Major cost drivers § Demographic changes § Expensive new technologies (high cost R&D) § Emergence of life style diseases § Better public information § Growing demands on quality of life § Fragmented delivery and financing system § Regulations  Gap in Healthcare Technologies development Costs health gap Available sources Time SO... How can we improve our performance? Spending less Getting better outcomes  PAYERS AF FO RD AB IL I VA TY LU E -F EFF OR -MO ICA NE CY Y SA FET Y QU AL IT Y Is it acceptable? Does it worth? Health Technology VALUE in health care system The term value defined as the health outcomes achieved per dollar or cost spent to achieve that outcomes COST VALUE = BENEFIT Questions that needs answers üWhat is the disease burden under study? üWhat is the expected impact on cost & health outcomes of the new intervention? üIs the new intervention cost-effective? üWhat is its competitive advantage today and in the near future? üIs the new intervention short term affordable? What is Pharmacoeconomics? § “ the description and analysis of the costs of drug therapy to health care systems and society”. § Identifies, measures, and compares the costs and consequences of pharmaceutical products and services. § PE attempts to find whether the added benefit of one intervention is worth the added cost of that intervention. Why is Pharmacoeconomics important? This continued increase in costs has resulted in a need to understand how limited resources can be used most efficiently and effectively. Why is Pharmacoeconomics important? Personal Level Pharmacoeconomics affect: ­Medication selection by the patient ­More expensive drug with marginal benefits ­Providing local health services ­Immunization ­Medication coverage under hospital and national formulary National Level Basic pharmacoeconomic equation Why do we need Health Economics? § Suppose you are comparing two drugs or services where one is more expensive than the other. Consider: § Efficacy of the drugs § Healthcare cost § Time frame § Perspective (patient, provider, payer) § So the question is there any added benefit? Pharmacoeconomics Application § Clinical Decision Making § Making cost-effective choices when resources are limited § To justify investment in a clinical service or program § To justify reimbursement of a clinical service or program Pharmacoeconomics Application §Formulary Management §Inclusion or exclusion of new drugs §Drug Policy decisions, treatment guidelines §Purchasing negotiation §Pricing in the Pharmaceutical Industry  ‘Fourth Hurdle’ § Demonstrating to regulatory agencies just a product's safety, efficacy, and quality (the first three hurdles) is no longer sufficient. § Manufacturers must often now demonstrate both: § clinical effectiveness (Is the new product better than currently available alternatives, including no treatment?) § cost-effectiveness (Is the product good value for money? Basic pharmacoeconomic equation Basic pharmacoeconomic equation Clinical or outcome Study Basic pharmacoeconomic equation Cost Analysis Relationship of pharmacoeconomics to other research supply and Pharmacy- Pharmacy- demand for Identify, measure, related health care related Pharmacoeconomics Health Care and evaluate the clinical end results of clinical or or Economics resources, the humanistic effects of health health care humanistic outcomes insurance, and services. outcomes manpower research research supply  Types of pharmacoeconomic studies If the research involves economic and clinical outcome evaluations and comparisons of pharmacy products or services, it can be termed a pharmacoeconomic study § Cost-Minimization analysis (CMA) § Cost-effectiveness analysis (CEA) § Cost-utility analysis (CUA) § Cost-Benefit analysis (CBA) 1- Cost-Minimization Analysis (CMA) § A comparison in which inputs are measured in monetary values and outcomes are assumed to be identical. § The simplest to conduct § Cannot be used when the outcomes are different § Examples: § Comparing Panadol® to Fevadol® on fever reduction § Comparing two generic medications § The only difference is cost 2-Cost-effectiveness analysis (CEA) § A comparison in which inputs are measured in monetary units and outcomes are measured in natural units of effectiveness. § CEA measures outcomes in natural units § Easy to comprehend by clinicians § Cannot compare different types of outcomes § Cannot compare the cost-effectiveness of implementing an anticoagulation clinic with implementing a diabetes clinic  2-Cost-effectiveness analysis (CEA) Cannot lump outcomes differences in one single effectiveness measure: First-Generation antihistamine Effectiveness: treat allergy Side effect: drowsiness Second-Generation antihistamine Effectiveness: treat allergy Side effect: very low drowsiness Although the effectiveness can be measured by SFDs, the measure doesn’t include the differences in the side effect 3-Cost-utility analysis (CUA) § A comparison in which inputs are measured in monetary units and outcomes are measured as patient preference–weighted extensions of life. § Chemotherapy agents à effectiveness is measured by number of years of life gained § However, longer life may not imply better quality of life § CUA measures outcomes by based on years of life that are adjusted by “utility” weights, which range from 1.0 for “perfect health” to 0.0 for “dead.”  4-Cost-Benefit Analysis (CBA) § A comparison in which both inputs and outcomes are measured in monetary units. § Two major advantages: 1. Clinicians and other decision makers can determine whether the benefits of a program or intervention exceed the costs of implementation. 2. Clinicians and other decision makers can compare multiple programs or interventions with similar or unrelated outcomes. § The major disadvantage of CBA is that it is difficult to place a monetary value on health outcomes Types of pharmacoeconomic studies What do you think? The implementation of an anticoagulation clinic versus the implementation of a diabetes clinic § What Pharmacoeconomics method should we used to compare the cost and consequence of these two service? § CMA § CEA § CBA § CUA Do not Forget Whatever type of analysis or combination of analyses is conducted, the economic comparisons are but one part of the decision-making process; social values and legal, ethical, and political considerations are also incorporated into the decision-making process.