![PHARMACOECONOMICS
METHODS & ITS ISSUES
BY
R.SATHISHKUMAR
II. M.PHARM [PHARMACY PRACTICE]
KMCH COLLEGE OF PHARMACY](https://image.slidesharecdn.com/pharmacoeconomicsmethodsitsissues-190312040628/85/Pharmacoeconomics-methods-its-issues-1-320.jpg)
![DISADVANTAGES
• The outcomes can be measured in the same clinical units.
COST EFFECTIVENESS RATIO
• Two forms of the cost effectiveness ratios are generally used
• ACER(average cost effectiveness ratio)
• ICER(incremental cost effectiveness ratio)
Average cost effectiveness ratio
ACER= health care cost in rupees or dollars /clinical outcomes.
Incremental cost effectiveness ratio
[cost in Rs. Of (A) – cost in Rs . Of (B) ]
[Effect in % of (A) - effect in % of (B)]](https://image.slidesharecdn.com/pharmacoeconomicsmethodsitsissues-190312040628/85/Pharmacoeconomics-methods-its-issues-10-320.jpg)
Pharmacoeconomics methods & its issues
- 1. PHARMACOECONOMICS METHODS & ITS ISSUES BY R.SATHISHKUMAR II. M.PHARM [PHARMACY PRACTICE] KMCH COLLEGE OF PHARMACY
- 2. PHARMACOECONOMICS • Pharmacoeconomics is a branch of health economics which compares the value of one drug or a drug therapy to another. • The pharmacoeconomics is also defined as the “analysis of the cost of the drug therapy to the healthcare systems and society”. • It’s the descriptive analysis of the cost of the drug therapy to the health care systems and society.
- 3. Methods of pharmacoeconomics Cost minimization analysis Cost benefit analysis Cost-utility analysis Cost effective analysis Cost of illness Method s of PE
- 4. COST BENEFIT ANALYSIS • Cost benefit analysis (CBA) of a medical care compares the cost of medical intervention to its benefits . • It is a economic analysis method that facilitates for the identification , measurement and comparison of the benefits and cost of the program or a treatment alternative. • In CBA ,the benefits are realized with the cost of providing it. • The cost and benefits are measured in the same units like rupees and dollars. ADVANTAGES • Its easy to do the cost analysis of CBA. • CBA is used to compare the benefits of a program.
- 5. • CBA is a basic tool to that can be used to improve the decision making process in the allocation of funds to health care and other programs. DISADVANTAGES • Its requires methodological considerations require a certain degree of technical understanding to apply CBA appropriately. • The use of CBA in then health care is a problem. MEASUREMENT OF BENEFITS IN CBA • The benefits are considered to be either positive or negative. • The benefit can be either gained or lost. • The benefits are measured by two methods • WTP(willingness to pay) • WTA(willingness to accept )
- 6. WILLINGNESS TO PAY • A representative patient population is told about the probability of success of a treatment and ask them how much they are willing to pay for the treatment. • It measures the person’s ability or desirability to pay for the program by determining how much money that a person is willing to loose for getting improved health. WILLINGNESS TO ACCEPT • Its is the minimum amount a patient or a group of patient is would accept or receive in order to lose or avoid a service. COST BENEFIT RATIO = TOTAL BENEFIT/TOTAL COST.
- 7. APPLICATIONS OF CBA • The overall concept is simple. • CBA can be employed in macro level for policy makers on health care program. • The cost of two alternative treatment can be compared. • Nation wide immunization program can be subjected without difficulty. • It’s the best method to study the document value of an existing healthcare services . • It can also be used to evaluate the health care program. • Its used to assess the money value of the large private and public sector projects.
- 8. COST EFFECTIVE ANALYSIS • CEA summarizes the health benefits and resources used by competing health care programs. • It helps to analyze the programs with different safety and efficacy profiles. • The program may have the common scale of outcomes for defining efficacy. • They are measured by non health improvement units like- • Lives saved , • Disease prevented, • Blood pressure controlled, • Complications prevented, • Life years extended etc..,
- 9. • It can also measured in terms of change in an intermediate clinical outcomes like- • Cost per night free of pain, • Night free of wheezing, • Night provided comfortable sleep, • Percentage change in the blood cholesterol level. ADVANTAGES • Most common type used in the pharmacy practice. • Cost can be measured in money values. • Effectiveness can be measured in the changes in the health care . • This is very much familiar to the researchers. • It is useful for the policy makers.
- 10. DISADVANTAGES • The outcomes can be measured in the same clinical units. COST EFFECTIVENESS RATIO • Two forms of the cost effectiveness ratios are generally used • ACER(average cost effectiveness ratio) • ICER(incremental cost effectiveness ratio) Average cost effectiveness ratio ACER= health care cost in rupees or dollars /clinical outcomes. Incremental cost effectiveness ratio [cost in Rs. Of (A) – cost in Rs . Of (B) ] [Effect in % of (A) - effect in % of (B)]
- 11. Applications • It has a great use in the formulary system, choosing programs and therapies. • Its used in comparison of the cost with the health outcome. • It provides valuable data for formulating the drug policy. • Its used for setting the public policies related to the use of drugs. • It’s the most common form of economic analysis in drug therapy.
- 12. COST UTILITY ANALYSIS • CUA is a formal economic evaluation method of pharmacy economics which is used for assessing the affiance of the health care program. • Its very much similar to the CEA. • Its used for comparing treatment programs. • The outcomes are generally expressed in the QALY gained. • It is expressed in most common units like quantity(mortality) and quality (morbidity). QALY= QOL * YEARS. QOL = health related quality of life. Measured by 0-1. 0- death. 1- perfect health
- 13. ADVANTAGES • It can be applied to comparison of different types of health outcomes using only one common unit like QALY which is not possible in CEA. • Cost utility in cooperates morbidity and mortality in QALY with out having need to give money value to the outcomes. DISADVANTAGES • Difficult to determine an accurate utility or QALY value. APPLICATIONS • It can be used if the HRQL is the important outcome in- • comparing the interventions that has a impact on patient function. • If the outcome is associated with the treatment. • When intervention affects both mortality and morbidity.
- 14. • If the intervention has a wide range of outcome and an need for common unit of outcome for comparison. • When the objective is to compare an intervention with others that have already been evaluated in terms of cost per QALY. METHODS OF ASSESSING THE UTILITY • Rating scale (RS), • Standard Gamble Technique (SG), • Time Trade Off (TTO).
- 15. COST MINIMIZATION ANALYSIS • CMA is a pharmacoeconomic method used to compare two or more treatment program alternatives that are equal in efficacy. • CMA compares the cost of the treatment alternatives in terms of cost. • Outcomes are not compare as they are assumed to be therapeutically equivalent. • The primary objective is to find out the least cost alternative.
- 16. APPLICATIONS • Cost savings of one treatment over other. • Applied for the formulary decision making. • Appropriate method to compare the two therapeutically equivalent agent. • It can be applied to various studies like generic medicines vs branded medicines. ADVANTAGES • Simple and straight forward. • No need to analyze the outcome. • Best method to do a comparative study. DISADVANTAGES • Can be applied to limited cases only.
- 17. COST OF ILLNESS (COI) • The COI Studies are frequently used by policy makers and other government organisations. • COI studies are often cited in disease studies that attempt to highlight the importance of a particular disease how obesity causes diabetes • The improvement of the cost estimates can be used as a baseline measure to determine the efficacy of health policies and programs • Estimates of COI can also facilitate international comparisons of the disease consequences and various approaches that are available for confronting those consequences.
- 18. • Its the measure of the burden of the illness on the society. • Its used to identify the overall cost of a particular disease for a defined population. • It measures the direct and indirect cost attributable to the society. APPLICATIONS • Frequently used by the government and other policy makers. • Used to estimate the cost of fatal injuries. • The findings are used for the educational purposes to eliminate the workspace accidents and fatalities.
- 19. • Used by the authorities to target the specific problems or diseases which involves greater medical and social costs. • Facilitates the international comparison of disease consequences . LIMITATIONS • Difficult to determine how the resources are allocated. • Limited comparison of results and findings. • Comparatively other methods can provide additional information.
- 20. REFERENCE K.G.Revikumar.Pharmacoepidemiology And Pharmacoeconomics- Concept And Practice.Hyderabad:pharmamed Press;2016.219-277.