Pharmacoeconomics

Pharmacoeconomics

SF-36 (The Short Form - 36):

The Short Form (36) Health Survey is a patient-reported survey of patient health. The SF-36 is a
measure of health status.

The SF-36 consists 36 questions that are in eight sections. The eight sections are:
1. vitality
2. physical functioning
3. bodily pain
4. general health perceptions
5. physical role functioning
6. emotional role functioning
7. social role functioning
8. mental health
The lower the score the more disability. The higher the score the less disability i.e., a score of zero is
equivalent to maximum disability and a score of 100 is equivalent to no disability.

Uses
• Evaluating individual patients health status
• Researching the cost-effectiveness of a treatment
• Monitoring and comparing disease burden

Pharmacoeconomics:

Economics is about trade-offs and choices between wants, needs, and the scarcity of resources to fulfill
these wants

Pharmacoeconomics has been defined as “ the description and analysis of the cost of drug therapy to
health care systems and the society. pharmacoeconomics has been defined as “the description and analysis
of the costs of drug therapy to health care systems and society”. Pharmacoeconomic research identifies,
measures, and compares the cost (ie, resources consumed and consequences (i.e., clinical economic,
humanistic) of pharmaceutical products and services.

Overview of pharmacoeconomic methodologies

Main types of analysis are:
2. cost-effectiveness
3. cost-benefit
4. Cost-minimization
5. Cost-utility

Others:
6. Cost-consequence analysis
7. Cost of illness evaluation

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Comparison of different pharmacoeconomic methodologies:

Methodology Cost Unit Outcome unit Eample

Cost-benefit dollars dollars cost benefits of expanding university education

(benefits of improved education and hence
productivity) compared to establishing a back
pain service (enhancing productivity by
returning patients to work).
Cost-effectiveness dollars Natural units (Life-years in severe reflux oesophagitis, we could
gained, blood glucose level, consider the costs per patient relieved of
mm Hg blood pressure) symptoms using a proton pump inhibitor
compared to those using H2 blockers.
Cost-minimization dollars assumed to be equivalent in prescribing a generic preparation instead of the
comparative group brand leader (lower cost but same health
outcomes).
Cost-Utility dollars quality-adjusted life-year cost per QALY of coronary artery bypass
(QALY) or other utilities grafting versus cost per QALY for
erythropoietin in renal disease.

Cost benefit analysis (CBA)

Here, the benefit is measured as the associated economic benefit of an intervention (eg monetary value of
returning a worker to employment earlier), and hence both costs and benefits are expressed in money.
CBA may ignore many intangible but very important benefits not measurable in money terms, e.g. relief
of anxiety. CBA may also seem to discriminate against those in whom a return to productive employment
is unlikely, eg the elderly, or the unemployed.
Cost-benefit analysis consists of identifying all of the benefits that accrue from the program or
intervention and converting them into dollars in the year in which they will occur. On the other side, all
program costs are identified and allocated through a specific year and, again, the cost are discounted to
their present value. then, if all relevant factors remain constant, the program with the largest present value
of benefits less cost is best in therms of its economic value.

Cost minimization analysis (CMA)

This involves measuring only costs, usually only to the health service, and is applicable only where the
outcomes are identical and need not be considered separately. An example would be prescribing a generic
preparation instead of the brand leader (lower cost but same health outcomes).
when two or more interventions are evaluated and demonstrated or assumed to be equivalent in terms of a
given outcome or consequence, cost associated with each intervention may be evaluated and compared.
this typical ost analysis is referred to as cost-minimization analysis. An example of this type of
investigation regarding drug therapy may be evaluation of two generically equivalent drugs in which the
outcome has been proven to be equal, although the acquisition and administration costs may be
significantly different.

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Cost effectiveness analysis (CEA)

The cost effectiveness analysis refer to a particular type of evaluation, in which the health benefit can be
defined and measured in natural units (eg years of life saved, ulcers healed) and the costs are measured in
money. It therefore compares therapies with qualitatively similar outcomes in a particular therapeutic
area. For instance, in severe reflux oesophagitis, we could consider the costs per patient relieved of
symptoms using a proton pump inhibitor compared to those using H2 blockers. CEA is the most
commonly applied form of economic analysis in the literature, and especially in drug therapy.
Cost-effectiveness analysis is a technique designed to assist a decision maker in identifying a preferred
choice among possible alternatives. generally, cost-effectiveness is defined as a series of analytical and
mathematical procedures that aid in the selection of a course of action from various alternative
approaches. Cost-effectiveness analysis has been applied to health matters where the program’s inputs can
be readily measured in dollars, but the program’s outputs are more appropriately stated in terms of health
improvement created (eg, life-years extended, clinical cures).

Cost utility analysis (CUA):

But here the outcome is a unit of utility (e.g. a QALY). Since this endpoint is not directly dependent on
the disease state, CUA can in theory look at more than one area of medicine, e.g. cost per QALY of
coronary artery bypass grafting versus cost per QALY for erythropoietin in renal disease. In practice this
is not so easy since the QALY is not a well defined fixed unit transferable from study to study. We should
be particularly wary of attempts to draw up league tables of QALYs to allow comparisons between a
range of therapies. The values in such tables have usually been derived at different times and in different
ways and are not comparable.

Cost-utility analysis is an economic tool in which the intervention consequence is measured in terms of
quantity and quality of life. the results of cost-utility analysis are expressed int he intervention cost per
quality-adjusted life-year gained or changes in quality of life measurement for a given intervention cost.
cost-utility analysis has been used somewhat successfully to aid in decisions regarding healthcare
programs (eg, surgery vs chemotherapy).

Hospital formulary and cost minimization & related problem:

• Factors to be considered: Unit cost; Frequency of dosing & duration of therapy; Time-tested

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