Transcript opportunity cost

Onco-Pharmacoeconomy Training Course
Turkey ISPOR Training Course
Session 3 - Workshop
Brian Godman and Dr Alan Haycox
Health Economics Unit
University of Liverpool Management School
As previously discussed on resource
Valuation
A value is attached to each resource consumed
Resources can be valued differently…
Average costs
 Marginal costs
 Opportunity costs

Health economists and policy makers emphasise
the importance of ‘opportunity costs’ in valuing
overall expenditure as budgets are finite
As discussed, the most important concept in
health economics is Opportunity Cost


The opportunity cost of using resources to
produce a good or service is the benefits
foregone from those resources not being
used in their next best alternative. The
concept of opportunity cost lies at the heart
of all economic analyse
The health policy goal is to maximise patient
outcomes with available resources. This
means some benefits will be foregone – but
these should be minimised
Case History – Adjuvant HERCEPTIN in
Breast Cancer in one UK Hospital
Currently 355 patients receive adjuvant treatment
in Norfolk and Norwich at GB£0.503mn/ year
(16 cured at a cost/ cure ranging from £23000 £137,000)
 Treating 75 patients with early stage breast
cancer with HERCEPTIN would cost
GB£1.94mn/ year rising to GB£2.3mn with
testing, monitoring and administration at a cost/
cure of £650,000
 Finite budgets mean tough decisions need to be
made on which treatments should be funded and
which should be terminated or reduced

Ref: Barrett et al BMJ 2006
Costs and potential benefits of adjuvant
cancer treatments in Norfolk Hospital
Treatment and number of patients
Drug cost
(GB£000)
Cost/cured patient
(GB£000)
Adjuvant chemotherapy for lung cancer (15
patients)
23
23
Oxaliplatin as adjuvant therapy for colon cancer
compared with fluorouracil alone (20 patients)
137
137
8
2.67
Rituximab in addition to CHOP for non-hodgkin
lymphoma in patients over 60 (25)
215
71.67
Adjuvant aromatase inhibitors in postmenopausal
breast cancer (270 patients) [NB drug costs will fall
substantially in Europe once generics routinely
available]
120
15
Total – 355 patients and 16 cured
503
Neoadjuvant chemotherapy for oesophageal
cancer (25 patients)
Ref: Barrett et al BMJ 2006
Workshop questions – based on the paper
by Barrett et al in the BMJ in 2006

Should HERCEPTIN be funded for use in
adjuvant breast cancer patients in oncology
units in Turkey?

If yes, and there are no additional funds, what
patients should receive HERCEPTIN and
how will this be paid for, i.e. what other
treatment approaches will be reduced? This
could be other technologies including drugs
as well as personnel
Workshop logistics

Break into small groups

Elect a spokesperson to feed back

Feedback starts at 17.00