PHA 746: Pharmacoeconomics Mid-Term Exam Review PDF

PHA 746: Pharmacoeconomics Mid-Term Exam Review Tuesday, November 5, 2024 Joseph Nosser, Pharm.D., BCACP, BCMTMS Assistant Professor of Pharmacy Practice William Carey University School of Pharmacy [email protected]...

PHA 746: Pharmacoeconomics Mid-Term Exam Review Tuesday, November 5, 2024 Joseph Nosser, Pharm.D., BCACP, BCMTMS Assistant Professor of Pharmacy Practice William Carey University School of Pharmacy [email protected] Review ▪ Scheduled Date & Time: Thursday, November 7, 2024, from 3:00 – 4:30 PM ▪ Number of Questions: 60 questions ▪ Time Limit: 90 minutes ▪ Topics ▪ Introduction to Pharmacoeconomics ▪ Introduction to US Healthcare System ▪ Measuring & Estimating Costs ▪ Critiquing Research Articles ▪ Retrospective Databases ▪ Cost Minimization Analysis ▪ Cost Effectiveness Analysis ▪ Cost Utility Analysis ▪ Resources ▪ Lecture slides (topics listed above) Contoso ▪ Textbook readings (referenced in lecture slides) Pharmaceuticals ▪ Practice problems (i.e., previous assignments submitted to Canvas)  (1,2,4) Review: Pharmacoeconomic Study Types Type Cost Measurement Unit Outcome Measurement Unit Dollars Assumed to be equivalent in Cost minimization analysis comparable group analysis Dollars Natural units Cost effectiveness analysis (i.e., life years gained, mmHg, mmol/L) Dollars Quality-adjusted life year (QALY) Cost utility analysis or other utilities Dollars Dollars Cost benefit analysis Contoso Pharmaceuticals Pharmacoeconomic Studies Yang et al. Cardiovasc Diabetol (2021) 20:21 https://doi.org/10.1186/s12933-020-01211-4 To conduct a real-word-study-based pharmacoeconomic analysis of a GLP-1 receptor agonist (GLP-1RA) vs. insulin among type 2 diabetes patients requiring intensified injection therapy and a systematic review of pharmacoeconomic studies of Background GLP-1RAs versus insulin. Individual-level analyses incorporating real-world cost & outcomes data were conducted for a cohort of 1022 propensity- score-matched pairs of GLP-1RA and insulin users from Taiwan's National Health Insurance Research Database, 2007- 2016. Study outcomes included the number needed to treat (NNT) to prevent one case of clinical events, healthcare costs, Methods and cost per case of event prevented. Costs were in 2019 US dollars. Analyses were performed from a third-party payer and healthcare sector perspectives. Structured systematic review procedures were conducted to synthesize updated evidence to support using GLP-1RAs versus insulin. Over a mean follow-up of 2.3 years, the NNT using a GLP-1RA versus insulin to prevent one case of all-cause mortality and hospitalized hypoglycemia was 57 and 30, respectively. Using GLP-1RAs instead of insulin cost US $54,851 and US Results $29,115 per case of all-cause mortality and hospitalized hypoglycemia prevented, respectively, from the payer perspective, and saved US $19,391 and US $10,293, respectively, from the healthcare sector perspective. Sensitivity analyses were robust, supporting the use of GLP-1RAs over insulin as being a cost-effective option for preventing one case of all-cause mortality or hospitalized hypoglycemia ranged from 60 to 100%. Based on the cost and outcome findings of this economic analysis, using GLP-1RAs is preferred to insulin for type 2 Conclusion diabetes patients requiring intensified injection therapy in clinical practice. Contoso Pharmaceuticals Review Question Which of the following pharmacoeconomic study types is BEST described in the abstract provided in the previous slide? A. Cost Minimization Analysis B. Cost Effectiveness Analysis C. Cost Benefit Analysis D. Cost Utility Analysis Contoso Pharmaceuticals Pharmacoeconomic Studies Alyamani et al. Curr. Oncol. 2021, 28, 2385–2398. https://doi.org/10.3390/curroncol28040219 Variable costs of different radiation treatment modalities have played an important factor in selecting the most Background appropriate treatment for patients with intermediate-risk prostate cancer. Analysis using a Markov model was conducted to simulate 20-year disease trajectory, quality-adjusted life years (QALYs) and health system costs of a cohort of intermediate-risk prostate cancer patients with mean age of 60 years. Clinical outcomes on toxicity and disease recurrence were measured and a probabilistic sensitivity analysis was performed, Methods varying input parameters simultaneously according to their distributions. In our study, investigators aimed to perform an economic analysis of radiation modalities currently used in the treatment of an intermediate-risk prostate cancer from Ontario’s provincial health care system perspective and provide a more comprehensive overview for this group of patients. Among the six radiation treatment modalities, including conventionally fractionated intensity-modulated radiation therapy (IMRT), hypofractionated IMRT, IMRT combined with high-dose-rate (HDR) brachytherapy, HDR brachytherapy Results monotherapy, low-dose-rate brachytherapy monotherapy, and stereotactic body radiotherapy (SBRT), SBRT was found to be more cost-effective when compared with LDR-b and other treatment modalities, resulting in an incremental cost-utility ratio of $2985 per QALY. Stereotactic body radiotherapy is the most cost-effective radiation treatment modality in treatment of intermediate-risk prostate cancer, while treatment toxicity and cost data are the key drivers of this study. Further work is required with long- Conclusion term follow-up for SBRT. Contoso Pharmaceuticals Review Question Which of the following pharmacoeconomic study types is BEST described in the abstract provided in the previous slide? A. Cost Minimization Analysis B. Cost Effectiveness Analysis C. Cost Benefit Analysis D. Cost Utility Analysis Contoso Pharmaceuticals Pharmacoeconomic Studies Gong et al. Int J Chron Obstruct Pulmon Dis. 2022 Aug 15;17:1863-1870. doi: 10.2147/COPD.S370532. Clinical pharmacists play a significant role in clinical practice, but their work in the clinical pathway (CP) of acute Background exacerbations of chronic obstructive pulmonary disease (AECOPD) remains undefined. This prospective study included patients who met the discharge criteria during hospitalization at the department of respiratory medicine of the Second Affiliated Hospital of Fujian Medical University from March to December 2017 (no Methods pharmacists involved) and from March 2018 to January 2019 (pharmacists involved). The adverse drug reaction (ADR) reporting rate, the average DDD number of antibacterial drugs, the per capita cost of pharmaceutical services, and the benefit-cost ratio (B/C) were analyzed. Eighty participants were enrolled during the traditional period and eighty-five participants during the clinical pharmacist period. The average hospital stays (9.2±0.4 vs 10.7±0.6 days, P=0.032), the total cost of hospitalization expenses (¥ 14,058±826 vs ¥ 18,765±1434, P=0.004), the total cost of drugs (¥ 5717±449 vs ¥ 8002±755, P=0.004), and cost Results of antimicrobial drugs (¥ 3639±379 vs ¥ 5636±641, P=0.007) were all lower in the clinical pharmacist group than in the traditional group. The B/C was 10.38 and 5.05 in the total cost of hospitalization expenses and the total cost of drugs, respectively. The clinical pharmacists' participation was independently associated with the total cost of hospitalization expenses (β=-0.201, 95% confidence interval: -0.390, -0.055, P=0.010). The participation of the clinical pharmacist in implementing an AECOPD CP significantly reduces patients' hospitalization Conclusion days, the total cost of hospitalization expenses, and antibiotic use and improves the B/C of AECOPD management. The Contoso Pharmaceuticals clinical pharmacists' participation was independently associated with the total hospitalization expenses. Review Question Which of the following pharmacoeconomic study types is BEST described in the abstract provided in the previous slide? A. Cost Minimization Analysis B. Cost Effectiveness Analysis C. Cost Benefit Analysis D. Cost Utility Analysis Contoso Pharmaceuticals Timing Adjustments for Costs (2-3) ▪ Discounting formula used to determine cost at its present value ▪ PV = FC x DF ▪ PV → present value ▪ FC → future cost ▪ DF → discount factor ▪ Discount factor 𝟏 ▪ 𝐧 (𝟏+𝐫) ▪ r → discount rate (in decimal form) ▪ n → year when cost was incurred Contoso Pharmaceuticals  (3) Timing Adjustments for Costs Year (n) DF Equation Discount Factor (5%) 1 1 1 0.952 (1 + 𝑟)𝑛 (1 + 0.05)1 2 1 1 0.907 (1 + 𝑟)𝑛 (1 + 0.05)2 3 1 1 0.864 (1 + 𝑟)𝑛 (1 + 0.05)3 4 1 1 0.823 (1 + 𝑟)𝑛 (1 + 0.05)4 5 1 1 0.784 (1 + 𝑟)𝑛 (1 + 0.05)5 Contoso Pharmaceuticals Timing Adjustments for Costs Year (n) Discount Factor (5%) 1 0.952 2 0.907 3 0.864 4 0.823 5 0.784 ▪ If a therapy costs $5,000 (Year 1), $4,000 (Year 2), and $3,000 (Year 3), what would be the adjusted costs? Assume costs incurred at the end of the year, meaning costs in Year 1 should also be discounted. = ($5,000 x 0.952) + ($4,000 x 0.907) + ($3,000 x 0.864) = $10,980 Contoso Pharmaceuticals  Timing Adjustments for Costs Year (n) Discount Factor (5%) 1 0.952 2 0.907 3 0.864 4 0.823 5 0.784 ▪ If a therapy costs $5,000 (Year 1), $4,000 (Year 2), and $3,000 (Year 3), what would be the adjusted costs? Assume costs incurred at the beginning of the year, meaning that costs only in Year 2 & 3 should be discounted. = ($5,000) + ($4,000 x 0.952) + ($3,000 x 0.907) = $11,529 Contoso Pharmaceuticals  Average vs. Incremental Costs (1-3) ▪ Methods used to calculate costs in a cost-effectiveness analysis (CEA) ▪ Average cost-effectiveness ratio (ACER) (1-3) ▪ “Ratio of resources used per unit of clinical benefit” ▪ Assumed that the calculated ratio is compared to no treatment ▪ Not as clinically relevant because healthcare providers aren’t likely questioning the choice to treat or not ▪ More likely that providers want to know how one treatment compares with another treatment in terms of costs & outcomes (1-3) ▪ Incremental cost-effectiveness ratio (ICER) ▪ “Ratio of the difference in costs divided by the difference in outcomes” ▪ Assumed that the calculated ratio is comparing two treatment options ▪ Represents the “extra cost of producing one extra unit of benefit” ▪ Most appropriate method for presenting CEA data Contoso Pharmaceuticals  (1) Average Cost-Effectiveness Ratio (ACER) Alternative Costs for 12 Months Lowering of LDL Average Cost per of Therapy in 12 Months Reduction in LDL Current medication $1,000 25 mg/dL $40 per mg/dL New medication $1,500 30 mg/dL $50 per mg/dL ▪ Current Medication ▪ = $1,000 / (25 mg/dL) ▪ = $40 per 1 mg/dL reduction in LDL ▪ New Medication ▪ = $1,500 / (30 mg/dL) ▪ = $50 per 1 mg/dL reduction in LDL Contoso Pharmaceuticals Incremental Cost-Effectiveness Ratio (ICER) Alternative Costs for 12 Months Lowering of LDL of Therapy in 12 Months Current medication $1,000 25 mg/dL New medication $1,500 30 mg/dL ▪ ICER Calculation: ($1,500 −$1,000) ▪ = 𝑚𝑔 𝑚𝑔 = $100 per 1 additional mg/dL reduction in LDL (30 𝑑𝐿 −25 𝑑𝐿 ) ▪ P&T committees for hospitals or managed care organizations will decide if the increased cost is worth the increased benefit. ▪ If costs and benefits are estimated for only one (1) year, discounting is NOT necessary. ▪ If ICER is negative, one treatment is both more effective & less expensive (AKA dominant) to its comparator. ▪ When one option is more expensive & effective than its comparator, use ICER to calculate the cost per Contoso Pharmaceuticals added unit of benefit.  (2) ACER and ICER Calculations Alternative Total Costs Effectiveness Treatment A $325.00 87% Treatment B $450.00 91% ▪ ACER Calculation (Treatment A): ▪ = $325 / 0.87 ▪ = $373 per success ▪ ACER Calculation (Treatment B): ▪ = $450 / 0.91 ▪ = $494 per success ▪ ICER Calculation: ($450 −$325) ▪ = = $3,125 for each additional success (0.91 −0.87) Contoso Pharmaceuticals Cost – Effectiveness Grid Contoso Pharmaceuticals Cost – Effectiveness Plane Cost (+) Overview ▪ Intersecting point of X and Y axis lines Quadrant IV Quadrant I describes the starting point of costs (Dominated) (Trade-Off) and effectiveness for the standard comparator ▪ For each alternative in comparison, a Effectiveness (-) Effectiveness (+) point is placed on the graph, which describes the following: Quadrant III Quadrant II ▪ Higher or lower costs from the (Trade-Off) (Dominant) starting point (Y-axis) ▪ More or less effective from the starting point (X-axis) Cost (-) Contoso Pharmaceuticals Incremental Net Benefit (INB) Analysis ▪ Incremental Net Benefit (INB) → AKA “net benefit framework” or “net monetary benefit” ▪ Alternative method to ICER for comparing cost-effectiveness of alternatives to current standard therapy. ▪ Uses a value estimate for health benefits (outcomes) in the incremental analysis. ▪ AKA “willingness to pay”, which is represented by lambda (λ). ▪ λ value remains constant across disease categories and patient populations. ▪ Range of λ values will be used in a sensitivity analysis to determine if results are robust. ▪ Incremental net benefit (INB) equation → INB = (λ× Δ Effects) − Δ Costs ▪ INB > 0 → cost-effective ▪ INB < 0 → not cost-effective ▪ Advantages for INB: ▪ Reduces statistical restrictions. ▪ Less ambiguous results, when compared to ICER. ▪ Disadvantages for INB: ▪ Difficulty to assign a monetary value on health benefits (i.e., similar to CBA). Contoso Pharmaceuticals Example – INB Analysis Breathe-Again ICS Cost ($) $ 537.00 $ 320.00 Outcome (SFDs) 90 SFDs 45 SFDs ▪ Determine if Breathe-Again is a cost-effective alternative to inhaled corticosteroids (ICS) for the treatment of asthma. Calculate ICER and INB. Assume the “willingness to pay” is $5.00 Contoso Pharmaceuticals Example – INB Analysis (continued) Breathe-Again ICS Cost ($) $ 537.00 $ 320.00 Outcome (SFDs) 90 SFDs 45 SFDs ICER Calculation INB Calculation = ($537 −$320) Assume λ = $5.00 (90 −45) INB = (λ × Δ Effects) − Δ Costs = $ 4.82 per additional SFD INB = ($5.00 x 45) – 217 INB = $8.00 Contoso Pharmaceuticals Example – INB Analysis (continued) Breathe-Again ICS Cost ($) $ 537.00 $ 320.00 Outcome (SFDs) 90 SFDs 45 SFDs ▪ Conduct a sensitivity analysis for INB. Assume a range of λ values from $1 - $10. Contoso Pharmaceuticals Example – INB Analysis (continued) Breathe-Again ICS Cost ($) $ 537.00 $ 320.00 Outcome (SFDs) 90 SFDs 45 SFDs ▪ Conduct a sensitivity analysis for INB. Assume a range of λ values from $1 - $10. INB Calculation INB Calculation INB Calculation Assume λ = $1.00 Assume λ = $5.00 Assume λ = $10.00 INB = (λ × Δ Effects) − Δ Costs INB = (λ × Δ Effects) − Δ Costs INB = (λ × Δ Effects) − Δ Costs INB = ($1.00 x 45) – 217 INB = ($5.00 x 45) – 217 INB = ($10.00 x 45) – 217 INB = -$172.00 INB = $8.00 INB = $233.00 Contoso Pharmaceuticals Calculating QALYs Treatment Cost Years of Life Saved (YLS) Utility (YLS) QALYs Drug A $10,000 5 0.8 4.0 Drug B $20,000 7 0.5 3.5 Calculation Result CEA = ($20,000 −$10,000) $5,000 per additional YLS (7 𝑦𝑒𝑎𝑟𝑠 −5 𝑦𝑒𝑎𝑟𝑠) CUA = ($20,000 −$10,000) Drug A dominant (3.5 𝑄𝐴𝐿𝑌𝑠 −4.0 𝑄𝐴𝐿𝑌𝑠) Example (Drug A versus Drug B) ▪ Multiply difference in length of life by the drug alternative’s utility score. ▪ Assume utility score remains constant per additional year of life. ▪ CEA → Drug B relatively cost-effective at $5,000 per additional year of life ▪ CUA → accounts for quality of life → Drug A dominant because lower cost & more QALYs Contoso Pharmaceuticals  Thank You! Joseph Nosser, Pharm.D., BCACP, BCMTMS [email protected] Contoso Pharmaceuticals