Pharmacoeconomics Flashcards
What is Pharmacoeconomics
- description and analysis of the costs and consequences (outcomes) of pharmaceuticals
- process of identifying, measuring, and comparing the costs, risks, and benefits of programs, services, and therapies
Health Consumption Expenditures as % of GDP vs Life Expectancy
the United States spend more on healthcare as a % of GDP but have a much lower life expectancy (76) compared to other countries such as Canada, UK, Germany, Belgium, or Switzerland
Why is Pharmacoeconomics important?
- healthcare costs are increasing
- health outcomes are decreasing
- drugs are continuing to be expensive
HOW ARE WE GOING TO SPEND OUR RESOURCES
4 Types of Cost
Direct Medical Costs
Direct Non-Medical Costs
Indirect Costs
Intangible Costs
Direct Medical Costs
medical costs associated with providing treatment
Ex) cost of med, physician visits, hospitalizations
Direct Non-Medical Costs
costs directly associated with treatment but not medical in nature
Ex) cost of transportation, parking, gas, babysitter, lodging, food
Indirect Costs
costs that result in a loss of productivity because of illness/death –> no transfer of money
Ex) missing school or work, decreased productivity
Intangible
costs of pain, suffering, anxiety, fatigue due to illness or treatment –> difficult to measure
Different perspectives of who bears the cost
Patient: how much $ comes out of their pocket
Institution: how much $ is hospital getting reimbursed compared to how much they are spending
Payer: how much $ is insurer getting reimbursed and how much will they cover
Society: taxes that support Medicaid and Medicare
Pharmacoeconomic Analyses
Cost-Minimization
Cost-Benefit
Cost-Effectiveness
Cost-Utility
How are costs measured?
US dollars
Cost-Minimization Analysis
used to compare costs of interventions with EQUIVALENT clinical outcomes –> measures total direct cost of drug (drug, preparation, administration, etc)
Ex)
- generic vs brand
- Drug A vs Drug B with equal efficacy/safety in drug class
Cost Measurement Unit: $$
Outcome Measurement Unit: not measured (equivalent)
Advantages:
- simplicity
- no assessment of outcome
Disadvantages:
- ONLY useful when outcomes are equal
Cost-Benefit Analysis
measures costs of interventions & outcomes in MONETARY UNITS
determines which intervention provides the best monetary benefit
MUST ASSIGN MONETARY VALUE TO CLINICAL ENDPOINTS
Cost Measurement Unit: $$
Outcome Measurement Unit: $$
Advantages:
- allows comparison of interventions with different outcomes
Disadvantages:
- requires assigning monetary values to life, pain, LDL, BP
Cost-Effectiveness Analysis
MOST COMMON TYPE
measures outcomes in natural health units that are easy to apply
determines which intervention achieves given objective at the lowest cost
Cost Measurement Unit: $$
Outcome Measurement Unit: natural health units
Advantages:
- outcomes measured in units that are easy to understand by clinicians
- no need to convert outcome to monetary values
Disadvantages:
- outcomes must be measured in same unit
- length of life is not the same as quality of life
ICER
Incremental Cost-Effectiveness Ratio
Cost of Drug B - Cost of Drug A /
Outcome of Drug B - Outcome of Drug A
