Pharmaceuticals Policy and Law 14 (2012) 36 DOI 10.

3233/PPL-2011-0337 IOS Press

Introduction Achieving value: The role of pharmacoeconomics

J. Lyle Bootmana, and Grant H. Skrepnekb
a Health b Arizona

Sciences, The University of Arizona College of Pharmacy, Tucson, AZ, USA Emergency Medicine Research Center, The University of Arizona Cancer Center, The University of Arizona College of Pharmacy, Tucson, AZ, USA

Health expenditures worldwide have increased to an average of 9.5 percent of Gross Domestic Product (GDP) within Organisation for Economic Co-operation and Development (OECD) nations, representing an average growth rate of 4.1 percent per year [1]. Pharmaceuticals and other durable medical goods comprise almost 17 percent of total health expenditures, with the large majority of healthcare costs attributed to professional services and hospital care [1]. With aging global populations, several countries have forecasted higher percentages of GDP to be consumed by healthcare over the next several years and decades. While advances in health technology over the last several decades have greatly improved life spans and welfare to society, it is often perceived that the costs of these innovations have not been exceedingly offset by their benets [2,3]. Assessing healthcare expenditures involves the integration of several complex issues that surround coverage, supply and demand, pricing dynamics, and characteristics of the innovations utilized [4,5]. Healthcare policy is also challenged to achieve an ethical balance between patient outcomes and that of scal ability [4]. As illustrated in Fig. 1, policymakers often seek to optimize elements within The Iron Triangle of Health Care Policy, which is a triumvirate of cost, access, and quality based upon the numerous stakeholders that are present [6]. Achieving a balance across cost, access, and quality is challenging, particularly given that the value attributed to each of these elements differs based upon the perspective of stakeholders within healthcare. To illustrate, both providers and patients may typically seek to maximize access and quality, often at the result of increased costs. As a discipline, pharmacoeconomics offers a comprehensive analytic framework to evaluate the comparative value of innovations offered to society. Appearing in Fig. 2, pharmacoeconomics seeks to assess the costs and resources consumed for healthcare technologies relative to the patient outcomes achieved (e.g., economic, clinical,
Corresponding author: J. Lyle Bootman, Ph.D., Sc.D., The University of Arizona, Arizona Health Sciences Center, 1295 North Martin Avenue, Tucson, AZ 85721, USA. E-mail: bootman@pharmacy. arizona.edu.

1389-2827/12/$27.50 2012 Network of Centres for Study of Pharmaceutical Law. All rights reserved

J.L. Bootman and G.H. Skrepnek / Achieving value: The role of pharmacoeconomics

Fig. 1. The iron triangle of health policy and various stakeholders of health policy.

Fig. 2. General analytic framework of pharmacoeconomic analyses.

and humanistic) versus those costs and outcomes associated with other standards of care [7]. Overall, the methodologies offered by cost-effectiveness, cost-utility, or cost-benet analyses augment evidence-based approaches to care and provide support for decisionmakers, with the intention of maximizing the overall welfare of society in lieu of other competing alternatives. Importantly, pharmacoeconomics allows for value propositions surrounding innovation to become increasingly transparent for each of the stakeholders in society. The use of pharmacoeconomics within the current healthcare environment may offer the increased ability to better allocate scarce resources given advances in medical diagnoses and pharmaceutical treatments, particularly given the policy emphasis on cost-containment. Consensus now exists among policymakers for an increase in comprehensive and comparative evaluations of technologies, wherein pharmacoeconomics may allow for adoption and reimbursement decisionmaking to achieve effectiveness, efciency, and equitability [8,9]. As such, this issue of Pharmaceuticals Policy and Law addresses numerous topics surrounding the issue of value as applied to pharmaceuticals and their application to patient care. Concerns of access, cost, underutilization, safety, comparative effectiveness, and cost-effectiveness have become increasingly critical. The discipline of pharmacoeconomics contributes greatly

J.L. Bootman and G.H. Skrepnek / Achieving value: The role of pharmacoeconomics

to understanding the value that pharmaceuticals and other health care technologies can achieve if employed appropriately. References
[1] OECD Health Data 2011 Frequently Requested Data. Internet: http://stats.oecd.org/Index.aspx? DataSetCode=SHA Accessed: 12 Sept 2011. [2] K.M. Murphy and R.H. Topel, The Value of Health and Longevity, J Polit Econ 114(9) (2006), 871904. [3] B.R. Luce, J. Mauskopf, F. Sloan, J. Ostermann and L.C. Paramore, The Return of Investment in Health Care: From 1980 to 2000, Value Health 9 (2006), 146156. [4] G.H. Skrepnek, Balancing Cost, Quality, and Access to Care Among Payers, Providers, and Patients: The Sword of Damocles, Arizona Med 19(2) (2008), 1827. [5] K.j. Arrow, Uncertainty and the Welfare Economics of Medical Care, American Economic Review 53 (1963), 941973. [6] W.L. Kissick, Medicines Dilemmas: Innite Needs Versus Finite Resources, Yale University Press: New Haven, CT, 1994. [7] J.L. Bootman, R.J. Townsend and W.F. McGhan, eds, Principles of PharmacoEconomics. Third Edition. Cincinnati: W Harvey Whitney Books, 2005. [8] G.R. Wilensky, Developing a Center for Comparative Effectiveness Information, Health Affairs 25(6) (2006), 572w585w. [9] L.A. Aday, C.E. Begley, D.R. Lairson and C.H. Slater, Evaluating the Healthcare System: Effectiveness, Efciency, and Equity, Third Edition. Chicago: Health Administration Press, 2004.

Biographical Sketch J. Lyle Bootman, Ph.D., Sc.D.

Dr. Bootman has served as Dean of The University of Arizona College of Pharmacy since 1987. He is professor of pharmacy, medicine and public health, and a Fellow of several professional associations including the American Pharmacists Association, American Association of Pharmaceutical Scientists and the American College of Apothecaries. He is the Founding and Executive Director of the University of

J.L. Bootman and G.H. Skrepnek / Achieving value: The role of pharmacoeconomics

Arizona Center for Health Outcomes and PharmacoEconomic (HOPE) Research, one of the rst such centers developed in the world. He is also a founding director of the Healthcare Transformation Institute (HTI), rst such company launched to truly advancing our countrys health care system by developing new delivery models in improving patient health care value, patient outcomes, and services. He was recently elected to serve as President-elect of the American Association of Colleges of Pharmacy. He is Former President of the American Pharmacists Association and President Emeritus of the Pharmacy & Therapeutics Society. He received his pharmacy education at The University of Arizona and his doctorate at The University of Minnesota where he was given the Outstanding Achievement Award, the Universitys highest Alumni honor. He completed a clinical pharmacy residency at the world-renowned National Institutes of Health, and received an honorary doctorate from the University of the Sciences in Philadelphia, the rst such institution founded in the United States in 1821. Most recently he was honored with an honorary doctorate from The Ohio State University. Dr. Bootman has authored more than 285 research articles, books and monographs, and has been an invited speaker at more than 600 professional healthcare meetings and symposia. He was selected as one of the 50 most inuential pharmacists in the U.S. by American Druggist, and has received numerous outstanding scientic achievement awards, most notably from the American Association of Pharmaceutical Scientists and the Academy of Pharmaceutical Science and Research for his research which pioneered the eld of pharmacoeconomics and health outcomes. He has published several books including the rst textbook introducing the Principles of Pharmacoeconomics, which is utilized in more than 40 countries and translated in seven languages. His research regarding the outcomes of drug-related morbidity and mortality receives worldwide attention by the professional and the public media. Additionally, he is an elected member of the Institute of Medicine (IOM) of the National Academies, where he served on the Board of Health Care Services for seven years, and was Co-Chair of the IOM Committee which released the highly publicized report, Preventing Medication Errors. He serves as an advisor to leading pharmaceutical companies, universities and health care organizations throughout the world. Currently, he serves on several prestigious boards including HTI, The Critical Path Institute, Research Corporation Technologies, CMR Institute, First Databank and Madeira Therapeutics. Dr. Bootman has received numerous honors and awards. He was the recipient of the George Archambault Award, the highest honor given by the American Society of Consultant Pharmacists; the Latiolais Honor Medal, the highest honor in managed health care by the Pharmaceutical Care Management Association; the Hugo H. Schaefer Award which recognizes outstanding lifetime contributions to the organization, the profession and to society, given by the American Pharmacists Association. In 2008 he was recognized with the Joseph P. Remington Honor Medal, the highest honor given by the profession of pharmacy to recognize distinguished service and lifetime contributions.

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