Transcript PHARMACOECONOMICS - International Society For

Michigan Student Chapter
Pharmacoeconomics and
Outcomes Research:
Some Comments
Dean Smith
The International Society for Pharmacoeconomics and Outcomes Research is an
international organization promoting the science of pharmacoeconomics and health
outcomes research.
The International Society is organized to act as a scientific leader relevant to
research in pharmacoeconomics, health outcomes assessment, and related issues
of public policy.
The International Society represents health care researchers and practitioners
including pharmacists, physicians, economists, and other health care professionals
involved in pharmacoeconomic analysis and health outcomes assessment.
The mission of the International Society for Pharmacoeconomics and Outcomes
Research is to translate pharmacoeconomics and outcomes research into practice to
ensure that society allocates scarce health care resources wisely, fairly, and
efficiently.
Further Reading …
Designed specifically to meet the clinical informational needs
of managed care's Pharmacy and Therapeutics Committee
Members, The American Journal of Managed Care identifies
the challenges and shortcomings of and opportunities for the
current healthcare system by disseminating original research
that examines the impact of clinical, management, and policy
interventions and programs on healthcare and economic
outcomes.
Editors:
Michael E. Chernew, Ph.D.
A. Mark Fendrick, MD
Disclosure

Professor,
Health Management & Policy
Disclosure

Co-Director, UM-Pfizer Pharmacoeconomics
& Outcomes Research Fellowship Program
Disclosure

Member, Board of Directors
Disclosure

Consultant, various projects
Conflict of Interest

"No doubt there are other important
things in life besides conflict, but
there are not many other things so
inevitably interesting."
-Robert Lynd, The Blue Lion
Outline

Pharmacoeconomics &
Outcomes Research

The FDA View

A Study Example
Prescription Drug Expenditures

Is this is a good thing?
16%
14%
12%
% Change in
Rx Spending
10%
8%
Drugs as % of
Total Health
Spending
6%
4%
2%
0%
1965
1970
1980
1990
2000
Perspectives
Patient
3rd-Party Payer
-Clinical Cure
P E R S P E C T -Clinical
I V E Cure
-Quality of life
-Cost
-Out-of-pocket Cost
-Customer
-Satisfaction with
perception of value
treatment process
Hospital / Physician
-Clinical Cure
-Profit from treatment
Employer / Society
-Clinical Cure
-Cost
-Productivity
J&J Pulls Guide on Web Site
Wall Street Journal, April 12, 2002

In an embarrassing retraction, Johnson &
Johnson has withdrawn a how-to-guide
from a company web site that helped
doctors calculate how much money they
might make by administering an
expensive arthritis drug in their offices.

World-wide sales of Remicade climbed
95% to 721 million last year.

J&J fell 74 cents to $62.70
Definitions

Pharmacoeconomics is the application of
economic analysis to the use of
pharmaceutical products, services and
programs, which frequently focuses on
the costs (inputs) and consequences
(outcomes) of that use.

Outcomes research refers to broader
consideration of the measurement of the
efficacy or effectiveness of treatment.
Outcomes Research
The assessment of technology (drugs, devices, etc)
Clinical
Economic
Humanistic
• Efficacy
• Safety
• Impact of therapy
on “natural history”
of the disease
• Cost Analysis
• Cost-of-Illness
• Cost-Minimization
• Cost-Benefit
• Cost-Effectiveness
• Cost-Utility
• Health Related
Quality of Life
• Patient Satisfaction
• Caregiver Impact
• Patient Preferences
• Functional Status
Health Services Research
•Policy Research
•Access
•Structure of Care
Application of Pharmacoeconomics
Pharmacoeconomic Studies
Research and
Development
Strategy
Phase II
Pricing and
Reimbursement
Strategy
Phase III
Regulatory
Phase
Communication to
Physicians and
Patients
Marketing
Phase
Why Pharmacoeconomics - Internal
New Drug
Approval NDA
Investigational
New Drug - IND
Basic Research
Phase I
Phase II Phase III
Time (months)
42.6
15.5
24.3
36.0 = 119.4
Direct Cost ($mil.)
65.5
9.3
18.6
20.2 = 113.6
155.6
17.8
30.3
27.1 = 230.8
Capitalized Cost
Why Pharmacoeconomics - External
Evidence
Efficacy
Safety
Efficiency
Market
Quality
Registration
Price/Reimbursement
Pricing Tool
2
1
3
Drug D
Drug C
Drug B
Drug A
Effectiveness
1. Break-even Price
2. Efficiency Price
3. Premium Price
Total Cost of Treatment
Patient Outcomes Assessment
Sources and Examples
Clinician Reported
Global
impressions
Observation
& tests
of function
Physiological
FEV1
HbA1c
Tumor size
Caregiver Reported
Patient Reported
Dependency
Functional
status
Functional status
Symptoms
HRQL
Treatment
Satisfaction
Productivity
Value: Ratio Acceptability
Conclusion
II
Adopt
III
Evaluate
Effectiveness /
Outcomes
# : New Drug
C
I
Evaluate
C : Control
IV
Reject
Treatment Cost
Outline

Pharmacoeconomics &
Outcomes Research

The FDA View

A Study Example
Regulation and Acceptance of PE
AUS
2000
Level of Regulation
NL
CDN
F
FRG
UK
USA
B
I
SW
ESP
Level of Acceptance
Substantial Evidence- FDA Act 505

Adequate and well-controlled
investigations...

By experts qualified to evaluate therapy
effectiveness...

Can be concluded that the drug has the
effect it purports...

Under the conditions of use, prescribed or
recommended in the label...
Labeling Claims

Labeling (approved claims)
 Indications must be in the label
 Other information of “clinical
significance”
 Relevance for prescribing decision
 FDA decides (approves)
Advertising Claims

Advertising (permitted claims)
 Meet advertising substantiation and
disclosure requirements
 Must be consistent with and not
contrary to Label
 Company decides, FDA reviews
FDA Recommendations:
Development of Evidence

Consult the experts

Start with the desired claims

Integrate with the clinical program

Develop with patient input

Validate with clinical trial experience

Get FDA buy-in early
Recent FDA Warning Letters

Neurontin (seizures)- 6/29/01
 Misleadingly claims improvement in QOL
parameters based on the NEON study. The
NEON study is not considered substantial
evidence for claims of QOL improvements
because its not a controlled study.

Fosamax (osteoporosis)-6/20/01
 Website link titled “ Preserving your
independent Lifestyle”- overstates the
potential benefit, no substantiation
Prescription for Profit
New York Times Magazine, 3/11/01

“Claritin is a drug of our times: designed to
relieve symptoms and improve quality of life,
hardly lifesaving or even curative, expensive
as hell.”

~50% effective (46% v. 35% placebo)

$103/month
Cefditoren (Spectracef)
Medical Letter, January 21, 20021

“ ... it offers no clinical advantage over
cefdinir, but it costs less.”
 Cefdirir
 Cefditoren
$82.42*
$65.50*
* Drug Topics Red Book, 10 Day treatment
Outline

Pharmacoeconomics &
Outcomes Research

The FDA View

A Study Example
oral third-generation, semisynthetic,
extended spectrum cephalosporin antibiotic
The Trial / Goal

To obtain FDA approval of cefprozil
(Omnicef®) for uniform 5-day therapy
(from prior labeling of 7 to 10-day
therapy ~ as is common for many
antibiotics)
Patient Populations
from Randomized to Cured
Randomized
250
Clinically Evaluable, Test-of-Cure
200
Cured at Test-of-Cure
150
Clinically Qualified, Long-term
Follow-Up
Cured at Long-term Follow-Up
100
50
0
Cefdinir
Cefprozil
TOC
63.9%
v. 65.7%
P = 0.35
Study Drug Prices
•
Dose size varies cefdinir (7 mg/kg) v
cefprozil (15 mg/kg) as do drug prices:
Pricing (125/5 ml bottles)
Drug
ml
AWP
AWP/ml
Cefdinir
50 ml
$27.20
$0.544
Cefprozil
100 ml
$29.72
$0.297
Source: Red Book
Study Drug Costs
•
Mean doses were 5.03 and 10.59 - with
dosing of 7 mg/kg vs 15 mg/kg. Median
days on study drug were 5, 10.
Cefdinir
Cefprozil
(5.03 * 2 * 5 = 50.3)
(10.59 * 2 * 10 = 211.8)
* $82.42 comes from 300 mg tablets.
$27.87
$62.90
Non-Study Medications
70%
56%
68.0%
67.1%
Use of Any
Non-Study
Medication
42%
28%
14%
0%
Cefdinir
Cefprozil
Non-Study Medications
$30.00
$25.00
$15.00
Adverse Event
Otitis Media
Other
$10.00
P = 0.69
$20.00
$5.00
$0.00
Cefdinir
Cefprozil
Non-Study Visits
$16.00
$14.00
Adverse Event
Otitis Media
Failure
$12.00
$10.00
$8.00
P = 0.14
$6.00
$4.00
$2.00
$0.00
Cefdinir
Cefprozil
Total Costs
$160.00
$140.00
Non-Study
Visits
Non-Study
Medications
Study Outpat
Visits
Study
Medications
$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
$0.00
Cefdinir
Cefprozil
P < 0.01
Conclusions

Antibiotic Costs
 For some clinics, selection of antibiotics
may be determined by “value”
 With equivalent clinical outcomes, selection
may be determined by cost.
 Costs should consider total cost of
treatment, not just drug price.
Conclusions

"Not everything that can be counted
counts, and not everything that counts can
be counted."
- Albert Einstein (1879-1955)
Questions