Transcript Principles and practical application of pharmacoeconomics

Cost-effective Prescribing
Dr. Máirín Ryan
Pharmacoeconomics
Pharmacoeconomics: that branch of
health economics that focuses upon the
costs and benefits of drug therapy
 limited resources
 maximum health impact from a given budget
 cost-effective prescribing
Economic evaluation always involves a
comparative analysis of alternative
courses of action
Opportunity Cost
PPARS
Herceptin for
breast cancer
National Centre for Pharmacoeconomics
• Established with financial support from the
Department of Health and Children
• Aims to promote expertise in Ireland for the
advancement of the discipline of
pharmacoeconomics through education,
practice and research
Centre
Dept of Health
Research
www.ncpe.ie
Education
Drug expenditure (€ Millions) under the Community Drugs Scheme
between 1994 and 2004
1600
1400
1200
1000
800
GMS
600
Total
400
200
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
0
Top 10 products of highest cost to the GMS for the year
ended 2004 in the order of their total ingredient cost
ATORVASTATIN
CLINICAL NUTRITIONAL PRODUCTS
PRAVASTATIN
OMEPRAZOLE
OLANZAPINE
SALMETEROL AND DRUGS FOR COPD
LANSOPRAZOLE
CLOPIDOGREL
ESOMEPRAZOLE
AMLODIPINE
0
5
10
15
€ million
20
25
30
The main reasons driving such growth in
pharmaceutical expenditure include:
1. Product Mix:
Prescribing of newer more expensive medications:
Omeprazole
Lansoprazole
Esomeprazole
Pantoprazole
10% of GMS expenditure 2003 (€51.3m)
Rabeprazole
Pravastatin
Atorvastatin
Simvastatin
8.3% of GMS expenditure 2003
(€42.9m)
2. Volume effect:
Growth in the number of prescription items
The number of eligible GMS patients has fallen by 9.1% from 1.27 million in 1993 to 1.16
million in 2003. However, the 32.3 million items prescribed in 2003 represent an 87%
increase over the 10 year period.
Spending on Drugs is a major Target for
Savings in Health Care costs because of the ...
• Volume of Drug Expenditure
• Highly visible nature of drug utilization
• Perception that the drug budget is not being used
to the best advantage
• Perception that savings can be made without
detriment to patients
• Avoids having to address sensitive issues relating
to other areas of the Health Care Budget
Improving cost-effectiveness of
pharmaceutical expenditure
• Review pricing mechanism
• Generic prescribing
• Cost-effective prescribing
IPHA agreement: governs price of
drugs in Ireland
•
•
•
•
Price linked to high price countries
Automatic reimbursement
Price freeze since 1993
Contribution of pharmaceutical industry to the
economy
• 2006 Renegotiation
– Realignment of prices
– Generic substitution
– PE evaluation prior to reimbursement
Ireland links its drug price by formula to those of
five other member states
Britain
Ireland
Netherlands
Denmark
Germany
France
Interdependence of European
pharmaceutical prices
UK: No external
reference
Sweden:
EU median
Denmark:
EU average
Ireland: Minimum
price-UK or average of
DK, FR, GER, NL, UK
France: No external
reference
Spain:
Average FR,
IT
Portugal:
Minimum FR,
IT, SPA
Finland:Weighted
EU average
Italy:
All EU prices
Netherlands:Average
BE, FR, GER, UK
Germany:No external
Reference
Belgium:
Average DK,
FIN, FR, GER,
NL, NOR,
SWE, UK
Greece:
Lowest EU price
Source: Evidence-based health care reimbursement systems in Europe. ISPOR 2003
International Pharmaceutical Price
Comparisons
Tilson et al. The high cost of medicines in Ireland: is
it time to change the pricing mechanism? Eur J
Health Econ.
Potential cost savings on the GMS scheme
from substitution of a Danish, average
European and UK price
25
20.95
20
Million €
16.54
15
9.38
10
5
0
Danish price
Average European
price
UK price
Tilson et al. The high cost of medicines in Ireland: is it time to change the pricing mechanism? Eur J Health Econ Vol
5 No 4 Nov 2004; 341-344
Potential cost savings (million €) for
individual drugs by substituting prices
Omeprazole
Danish
price
2.16
Average
UK price
European price
1.09
2.7
Pravastatin
2.85
2.85
0.85
Lansoprazole 2.74
1.57
1.61
Sertraline
1.01
1.29
1.01
Difference in distribution costs
Basis: €5 ex-manufacturer price
14
13
12
11
10
9
8
7
6
5
4
AUS
BEL
FIN
FR
GER
Ex-Mnf-Price
Source: Bohn, Schering 2002
IRL
ITA
NL
Wholesaler Margin
POR
DNK
Pharmacy Margin
GB
N
VAT
Conclusion
Possible explanations for the differences in prices:

The wholesale margin is higher in Ireland than in
the UK and Denmark.

Exchange rate fluctuations.

Generic substitution in Denmark makes market
more competitive.

Price freeze in Ireland since 1993 – no system in
Ireland to revise prices in line with the reference
countries.
Improving cost-effectiveness of
pharmaceutical expenditure
• Review pricing mechanism
• Generic prescribing
• Cost-effective prescribing
The potential impact of introducing a
system of generic substitution on the
Community Drug Schemes in Ireland
Lesley Tilson, Kathleen Bennett, Michael Barry.Eur J Health
Economics Sep 2005 Vol 6 Issue 3. 267-273
Objectives
1.
To investigate the level of generic drug
utilisation on the GMS and DP schemes for all
Health Board areas in 2003.
2.
To carry out a cost-minimisation analysis to
determine the potential savings to the drugs
budget if a system of generic substitution were
implemented.
The percentage of the ingredient cost spent on
generic items on the GMS and DP schemes in 2003
90.0%
DPS
GMS
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Generic
Branded generic
Proprietary drug with equivalent
generic
Proprietary drug with no
equivalent generic
Potential Savings from Generic Substitution
Substitution
of cheapest
generic
equivalent
Estimated
savings on
the GMS
Estimated
savings on
the DPS*
Substitution
of average
price of
generic
equivalent
Substitution
of maximum
price of
generic
equivalent
€12.7 million €10.9 million
€9.0 million
€9.1 million
€6.4 million
€7.7 million
* Including savings due to the 50% pharmacy mark-up
Prescribe generically!
Improving cost-effectiveness of
pharmaceutical expenditure
• Review pricing mechanism
• Generic prescribing
• Cost-effective prescribing:
Cost-effective prescribing
How well are we doing?
• Do we prescribe generically?
• Do we adhere to evidence based guidance
on treatment and prevention?
• Do we prescribe the safest therapies?
• Do we select the most cost-effective
options?
National Centre for Pharmacoeconomics, January 2006
Total Ingredient cost € of all statin medications (ATC class C10AA) to the GMS
between Jan'00 and Sep'05
C10AA01
C10AA03
C10AA04
C10AA06
Sim vastatin branded
Pravastatin branded
Fluvastatin
Cerivastatin
C10AA01
C10AA03
C10AA05
C10AA07
Sim vastatin generic
Pravastatin generic
Atorvastatin
Rosuvastatin
4,000,000
3,500,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Ja
n'
00
M
ay
'0
0
S
ep
'0
0
Ja
n'
01
M
ay
'0
1
S
ep
'0
1
Ja
n'
02
M
ay
'0
2
S
ep
'0
2
Ja
n'
03
M
ay
'0
3
S
ep
'0
3
Ja
n'
04
M
ay
'0
4
S
ep
'0
4
Ja
n'
05
M
ay
'0
5
S
ep
'0
5
ingredient cost
3,000,000
Statin prescribing in Ireland
• Under prescribing…target 25%
– 8% in 2002
• IHD 52%, Diabetes 40%
• Doses lower than in the pivotal trials
– E.g. pravastatin 20mg
Regional variation in prescribing for
diabetes and use of secondary
preventative therapies in Ireland.
C Usher at al
Pharmacoepidemiology & Drug Safety 2005
Diabetes in Ireland
• Diabetes: growing epidemic
– Ageing population, diet, sedentary lifestyle
• Cardiovascular disease accounts for 70% of deaths
• Irish Cardiovascular Strategy:
– Secondary preventative therapies e.g. statins, aspirin,
BP control
• National Health Strategy
– Equity of access?
Standardised Hospital Discharge Rates for
persons with diabetes / health board region
Region
IDDM
NIDDM
EHB
110.3
104.1
WHB
98.6
95.1
MHB
112.8
130
MWHB
114.7
111.4
SEHB
97.3
116.1
NWHB
77.6
87.1
SHB
104.3
96.4
NEHB
98.8
109.2
Adjusted ORs for prescribing of ASPIRIN to
NIDDM patients by gender
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Adjusted ORs for prescribing of STATINS to
NIDDM patients by gender
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
EHB WHBMWHBNEHBNWHB SEHB SHB MHB
Adjusted ORs for prescribing of ACEi to
NIDDM patients by gender
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Cost-effective prescribing
How well are we doing?
• Do we prescribe generically?
• Do we adhere to evidence based guidance
on treatment and prevention?
• Do we prescribe the safest therapies?
• Do we select the most cost-effective
options?
Usage of paracetamol containing
combination analgesics remains high
in primary care
C Usher et al. BJCP 2005
Background
• Distalgesic: compound opiate analgesic
(dextroprooxyphene 32.5mg and paracetamol 325mg).
• Indication: mild to moderate pain.
• Controversial? Repeated use may result in tolerance,
cases of abuse also reported (McBride, 1995).
• Use in elderly regarded as inappropriate (Fick, 2003).
Aim
Compare prescribing of DISTALGESIC with
PARACETAMOL alone and PARACETAMOL COMBINATION
products.
Total number of prescriptions on the GMS in 2003 for
paracetamol-containing analgesic preparations.
Drug
Total no. prescriptions
% of total no. prescriptions
Co-proxamol*
366,212
42%
Paracetamol 500mg
271,636
31% (29% tabs., 2% supp.)
Paracetamol 500mg
Codeine 8mg
Caffeine 30mg
122,004
14%
Paracetamol 500mg
Codeine 30mg
61,544
7%
Paracetamol 500mg
Dihydrocodeine 10mg
50,889
6%
Paracetamol 500mg
Metoclopramide hydrochloride
5mg
8,404
1%
*Dextropropoxyphene hydrochloride 32.5mg, paracetamol 325mg.
Usher et al., 2005
Odds Ratios and 95% Confidence Intervals for patients receiving follow-up
prescriptions for the paracetamol-containing analgesic preparations 12 months
post initiation of therapy
OR (95% CI)
OR (95% CI)
Female vs. male# Over 65s vs. Under 65s#
Co-proxamol
1.18 (1.07-1.28)***1.71 (1.57-1.86)***
Paracetamol only
1.28 (1.16-1.39)***2.67 (2.44-2.93)***
Paracetamol combinations1.33 (1.20-1.47)***1.69 (1.53-1.87)***
#
Reference category. *p<0.05; **p<0.01; ***p<0.001.
Usher et al., 2005
Cost-effective prescribing
How well are we doing?
• Do we prescribe generically?
• Do we adhere to evidence based guidance
on treatment and prevention?
• Do we prescribe the safest therapies?
• Do we select the most cost-effective
options?
Cost-effective prescribing of Proton Pump
Inhibitors
• 10.1% of the GMS drugs budget for 2002 was attributable to the Proton
Pump Inhibitors.
• Four of the five PPI’s licensed in Ireland with the exception of
Rabeprazole are among the top thirty products of highest cost to the
GMS.
• A review by the UK’s National Institute of Clinical Excellance (NICE)
concluded that the efficacy of individual PPI’s did not differ
significantly, and the choice of agent should be based on licensed
indication and cost (July 2000).
Source: McGowan et al. Cost-effective prescribing of proton pump inhibitors in the GMS scheme. IMJ (2004).
Total GMS Expenditure (€) on PPIs in the ERHA between Jan 2001and
Dec 2002
700,000
600,000
500,000
400,000
€
300,000
200,000
100,000
0
Omeprazole
Pantoprazole Lansoprazole
Rabeprazole Esomeprazole
Estimated annual savings following substitution of Losec mups with
alternative PPIs during maintenance therapy according to prescribing
practices in the GMS scheme (2002)
Drug (Trade Name)
Strength mg
Percentage of
prescriptions
dispensed at given
strength
Estimated savings when substituted
for omeprazole (Losec Mups)
corrected for % prescriptions at
higher and lower doses
Generic Omeprazole
(Losamel)
20mg
100%
€ 3,135,971
Esomeprazole (Nexium)
20mg
40mg
52%
48%
€ 3,355,926
Lansoprazole (Zoton)
15mg
30mg
28%
72%
€ 4,233,020
Pantoprazole (Protium)
20mg
40mg
34%
66%
€ 5,728,656
Generic Omeprazole
(Ulcid)
20mg
100%
€ 6,419,600
Rabeprazole (Pariet)
10mg
20mg
19%
81%
€ 6,829,631
Generic Omeprazole
(Lopraz)
20mg
100%
€ 6,843,294
Pharmacoeconomic Evaluation in Europe in 2004
Britain:
National Institute of Clinical
Excellence (NICE) evaluates
the cost effectiveness of medicines.
Guidelines updated April 2004.
Norway: Pharmacoeconomic
data required for
reimbursement; official
guidelines in operation.
Finland:
Pharmacoeconomic evidence mandatory for evaluating new
therapies for reimbursement and may also be requested for
existing therapies.
Sweden:
Cost-effectiveness data required for
reimbursement.
Ireland: Guidelines for
pharmacoeconomic studies
prepared; cost-effectiveness
data may be requested.
Denmark:
Cost-effectiveness data may be requested for
reimbursement decisions.
Netherlands:
Pharmacoeconomic evidence explicitly
required for reimbursement of new products.
France:
Not a
formal requirement but increasingly
used in reimbursement decisions;
Guidelines prepared.
Belgium:
Not a formal requirement but a standard
report format for economic evaluations has
been published.
Spain:
Not a formal
requirement. Guidelines
prepared.
Portugal:
Cost benefit analysis incorporated
into reimbursement decisions.
Italy:
Proof of cost-effectiveness required
For pricing and reimbursement decisions.
Germany:
Guidelines prepared. No
formal requirement for
reimbursement but likely
to play a growing role in
the future.
Greece: Guidelines for pharmacoeconomic studies
prepared; cost-effectiveness data may be requested.
Value for money: costs vs benefits
Costs
Drug costs
+
Outpatient visits
+
Inpatient costs
Benefits:
-
More symptom free days
Less hospital admissions
Increased quality of life
Increased survival
CONSIDER A NEW INTERVENTION,
IF
More effective and/or Less adverse events and/or
More convenient
THEN
Less Other Drugs?
Less Tests and Imaging?
Less Physicians Consults?
Less Interventions?
Less or Shorter Hospital stay?
Typical Example: Cost Analysis of Drug B Vs. A
Suppose B works
better and is more
convenient
Average other treatment
costs
•Physicians
Total cost
•Hospital
•Surgery
Snet = net
saving
•Oth. Drugs
Average acquisition
cost
CAB
•Tests
•…….
SAB
+
B A
=
B
A
B
A
Cost Analysis of Drug B Vs. A (2)
Idem but differences are
Less pronounced
Average other
treatment costs
Total cost
•Physicians
•Hospital
Cnet = net cost
•Surgery
•Oth. Drugs
Average
acquisition cost
•Tests
•…….
CAB
SAB
+
B A
=
B
A
B
A
Cost Effectiveness
The cost effectiveness of a therapeutic intervention may
be expressed in terms of natural units such as life years
gained or infection avoided
i.e. COST/LYG
It may be expressed in utility terms i.e. preferences that
individuals or society may have for a set of health
outcomes. The effects of treatment on both patient
quality of life and survival are determined.
i.e. COST/QALY
Incremental Cost Effectiveness
Cost A – Cost B
Effect A – Effect B
or
Cost
Effect
The Cost-Effectiveness Plane
Ceiling Incremental
Cost-Effectiveness Ratio
Higher Cost
Q4
Q1
Higher
Effectiveness
Lower
Effectiveness
Q3
Q2
Lower Cost
COST-EFFECTIVENESS PLANE
Difference in cost
Difference in
effect
Economic Modelling: why is it necessary?
• Absence of hard data
• Need to synthesise comparisons:
• e.g. head-to-head comparisons of therapies
• Need to extrapolate
• Over time – e.g. beyond trial follow-up period
• Between intermediate and final outcomes
Cost-Effectiveness of Statins for
the Secondary Prevention of
Coronary Heart Disease in Ireland
M Barry, A Heerey.
IMJ May 2002;(95):133-135
Modelling the impact of statins for
secondary prevention in Ireland
• The disease is divided into distinct states
e.g. well, non fatal MI, Death
Well (IHD)
• Transition probabilities are assigned for
movement between these states
Nonfatal MI
Death
• Estimates of resource use are attached to
each state and transitions within the model
(attaching weights)
• Running the model over a large number of
cycles enables the estimation of long term
costs and outcomes
Transition probabilities required
Well (IHD)
Clinical effectiveness:
4S
Epidemiological: Irish life tables
Nonfatal MI
Death
Resource utilisation associated with
transition states
Well (IHD)
Drug costs
Monitoring: Dr visits & labs
Nonfatal MI
Death
Hospitalisation for MI
Cost-effectiveness of statins
for secondary prevention
atorvastatin
fluvastatin pravastatin simvastatin
Starting age
= 40 yrs
Combined sex
€1,172
€2,358
€3,900
€2,788
Males
> 40yrs
Females
> 40yrs
€1,189
€2,257
€3,646
€2,643
€1,194
€2,593
€4,412
€3,099
Cost per quality adjusted life year
Cost / QALY league tables
Intervention
Statins for hypercholesterolaemia
ACE inhibitor in heart failure
Beta blocker post MI
Radiation therapy in breast cancer
Mild acute HZV
EPO to augment autologous blood
donation in elective surgery
Cost/QALY
€1,172
€1,337
€7,333
€35,000
€90,000
€45,000,000
CEA of statins summary
• Cost-effectiveness analysis indicates that all statins
available in Ireland are highly cost-effective for the
secondary prevention of IHD
• Adopting new drug strategies may result in increased
drug expenditure but savings in other healthcare
budgets. Formal economic evaluation allows
comparison of increased costs with improvement in
benefit
Role for economic evaluation
• Individual patient level?
• Policy level
– Useful additional information to inform development of
guidelines
– Provides useful metric to combine all costs and savings
associated with drug therapy and allow comparison within and
between diseases
If a therapy is not clinically effective,
it cannot be cost-effective
MAIN LESSONS FROM THE
USE OF ECONOMIC
EVALUATION AT THE
CENTRAL LEVEL
• Demonstration of clinically-important
benefits is still paramount.
• Economic data are more important when
there is substantial budgetary impact.
• In reimbursement decisions, total refusal is
rare; limitations or restrictions in use are
much more common.
Drummond 2005
HOW ARE REIMBURSEMENT
RULES OR GUIDANCE
IMPLEMENTED?
• Depends on the jurisdiction and clinical setting.
• Use of hospital-based drugs can be influenced
by budgetary controls and formulary listing.
• Use of drugs in primary care can be influenced
by clinical guidelines (e.g. approval ‘on
authority’), financial incentives and formulary
restrictions.
Drummond 2005
HIQA’s Three Areas of Responsibility
 Information
 Quality and Safety
 Health Technology Assessment
Health Technology Assessment
“a policy research approach that examines the short and long
term social consequences of the application or use of
technology”
OTA,US: 1976
“technology assessment in health care is a multidisciplinary
field of policy analysis. It studies the medical, social, ethical,
and economic implications of development, diffusion and
use of health technology”
INAHTA: 1998
HTA functions of HIQA
• To provide authoritative and robust analysis of Health
Technology to inform decision making at all levels of the
system from policy to practice.
• To provide a single reference point for information on HTA
and to coordinate the dissemination of HTA guidance.
• To conduct horizon scanning within the area of HTA and
so inform the selection of topics/interventions for appraisal
in consultation with the Department of Health & Children
and other interested parties.
• To make recommendations for research where evidence is
lacking or incomplete.