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Flashcards in Pharmacoeconomics (DONE) Deck (21):
1

Pharmacoeconomics definition

The branch of economics that uses cost-benefit, cost effectiveness, cost minimisation, cost of illness and cost utility analyses to compare pharmaceutical products and treatment strategies

2

Factors taken into account when licensing a new medicine

When licensing a new medicine, the regulators focus on quality, safety, and how well it works. They do not take into account the cost effectiveness or value for money of a medicine, or its impact on NHS budgets

3

Rationale for pharmacoeconomic evaluation

Population has an almost unlimited want for healthcare
Only limited resources available
If we spend time and money on one thing, that time and money aren't available for something else
Population has increasing expectations- fuelled by advances in medical care
Ageing population means further cost

4

What do agencies such as NICE aim to do?

Clear up any confusion about similar medications used for the same condition
Find out whether a new and expensive medication offers value for money
Advise on how a particular and or neglected condition should be best treated
Make sure that all patients with the same condition are treated equally, regardless of where they live

5

Which treatments are reviewed by NICE?

Depends on the agency but broadly speaking, criteria include the need to:
Tackle emerging public health issues
Reduce differences in the health of different groups
Treat a disease with high levels of disability and or death
Improve patients or carers quality of life
Assess a wide range of similar treatments
Improve care

6

What are the main principles of the evaluation by NICE?

Independent review of the evidence
Expert panels
Evidence from specialists, patients, carers and manufacturers
Public consultation
Stated time frame to revisit the topic

7

Evaluation techniques in pharmacoeconomics

Cost-benefit analysis (CBA)
Cost-minimisation analysis (CMA)
Cost-effectiveness analysis (CEA)
Cost-utility analysis (CUA)

8

Cost benefit analysis

Rarely used
Compares outcomes of interventions expressed solely in monetary terms

9

Cost-minimisation analysis

Occasionally outcomes generated by an intervention may be virtually equal
Intervention costs are compared in a CMA to establish which provides best value for money

10

Simple cost effectiveness analysis (CEA)

Measures consequences of different interventions using a single outcome
Usually measured in natural units e.g. life years gained, deaths avoided, heart attacks prevented
Interventions compared in terms of cost per unit of effectiveness

11

What are common currencies?

Outcomes of CEA analyses very specific according to treatment/condition studied
Need to use a common currency to compare one with another
Most commonly used is the quality adjusted life-year (QALY)
The specific type of CEA undertaken using QALYs is the cost-unit analysis (CUA)
The CUA is the primary technique used in PE evaluations

12

QALY definition

A measure of a persons length of life weighted by a valuation of their health related quality of life

13

What is quantity of life?

Easy to understand
Expressed in terms of survival or life expectancy
Patient is either alive or not

14

What is quality of life?

Includes more than just health status but even looking just at health status is complicated
Many variables in both physical and mental health
Many approaches used to give a numerical value to life (a health utility)
Utilities range from 0 (dead) to 1 (best possible health)

15

What is EQ-5D?

An instrument for producing a numerical health utility value of QoL
Each of the five dimensions has three levels
243 possible outcomes, plus dead and unconscious= 245

16

Calculating a QALY

Amount of time spent in health state multiplied by utility score of that health state

17

Comparing treatments using QALYs

It is possible to chart the impact of an intervention on an individual patient compared to the health profile for the usual course of the disease

18

Independent vs mutually exclusive interventions

Independent interventions: need to use the cost-effectiveness ratio (CER)
Mutually exclusive interventions: need to use incremental cost-effectiveness ratio (CER)

19

Cost effectiveness ratio

CER= cost of the intervention/ health effects produced i.e. QALYs

20

Incremental cost effectiveness ratio

ICER= difference in cost between intervention A and B/ difference in health effects between A and B

21

NICE thresholds on providing a therapy

The decision as to whether a therapy is provided depends on viewing the ICER in the light of a specific threshold
In Wales, an intervention based on a cost per QALY of less than £30,000 can be regarded as cost-effective if there is good evidence of effectiveness