Transcript Pharmacoeconomics - Academy of Managed Care Pharmacy

Pharmacoeconomics
Presentation Developed for the
Academy of Managed Care Pharmacy
Updated: February 2016
Objectives
• Define the term pharmacoeconomics
• Differentiate between the types of
pharmacoeconomic evaluation methods
• Discuss various considerations essential to
evaluating a pharmacoeconomic design
• Provide examples of how pharmacoeconomics
is applied in practice and various roles for the
pharmacist
Definition of Pharmacoeconomics
• The process of identifying, measuring, and
comparing the costs, risks, and benefits of
programs, services, or therapies
• To determine which alternative produces the
best health outcome for the resource invested
• Most impactful when making decisions about
a population rather than individual
• “Costs vs. Consequences of Alternatives”
Types of Economic Evaluation
•
•
•
•
•
Cost of illness evaluation (COI)
Cost minimization analysis (CMA)
Cost benefit analysis (CBA)
Cost effectiveness analysis (CEA)
Cost utility analysis (CUA)
Cost of Illness Evaluation
• Also termed cost consequence model
• Description: Estimates the cost of a disease
within a defined population
• Application: Provides a baseline for evaluating
the impact of prevention/treatment options
• Measurement Units: Monetary ($)
• Example: Cost of peptic ulcer disease
Cost Minimization Analysis
• Description: Identifies intervention cost
differences between similar alternatives
• Application: Identify least costly alternative
when outcomes/consequences are identical
• Measurement Units: Monetary for
intervention costs (no outcomes measured)
• Example: Comparing costs of Drug A and Drug
B, which have evidence of equal efficacy for a
given condition and safety (incidence of ADRs)
Cost Benefit Analysis
• Description: Identifies net cost impact of an
intervention
• Measurement Units: Monetary for both
intervention costs and outcomes
• Calculated: Benefit($)/Cost ($)
• Application: Compare programs or agents with
different objectives or 1 program against a
return on investment benchmark
• Example: Clinical pharmacy service vs. other
institutional service
Cost Effectiveness Analysis
• Description: Compares costs of two or more alternatives versus
outcomes measured in natural units
• Measurement Unit: Monetary for cost, outcome in physical
measures i.e., event avoided
• Incremental cost to achieve a one unit increase in outcome
ICER = ∆Cost/∆Effect
= (CTx1 – CTx2)/(ETx1 – ETx2)
• Application: Compare treatment alternatives for a given
condition that differ in outcomes and costs
• Example: Osteoporosis Drug A vs Drug B on fracture risk
reduction ($/fracture avoided)
Cost Utility Analysis
• Description: Subset of cost effectiveness analysis outcomes are measured in utility units
– Utilities represent patient preferences and quality of
life/functional status associated with disease and/or
treatment
• QALY: Quality adjusted life year – factor of life
expectancy and utility
– e.g., 4 years at 25% QOL = 1 year at 100% QOL
• ICER = (CTx1 – CTx2)/(QALYTx1 – QALYTx2)
• Application: Same as CEA, useful when treatment
extends life and/or effects quality of life
• Example: Compare cancer chemotherapy regimens
Cost Effectiveness Plane
∆ Cost
500
More Costly, Less Effective
Quadrant II or NW
Standard treatment dominant
400
More Costly, More Effective
Quadrant I or NE
Trade off
300
200
100
∆ Effectiveness
-1
-0.8
0
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
-100
-200
Less Costly, Less Effective
Quadrant III or SW
Trade off
-300
-400
Less Costly, More Effective
Quadrant IV or SE
New treatment dominant
-500
10
Cost Effectiveness Plane
∆ Cost
$500
More Costly, Less Effective
Quadrant II or NW
Standard treatment dominant
$400
More Costly, More Effective
Quadrant I or NE
Trade off
$300
$200
$100
∆ Effectiveness
-1
-0.8
$0
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
-$100
-$200
Less Costly, Less Effective
Quadrant III or SW
Trade off
-$300
-$400
Less Costly, More Effective
Quadrant IV or SE
New treatment dominant
-$500
11
Recap of Pharmacoeconomic Analyses
Model Type
Units
Outcomes
Comparison
Cost Minimization
Costs in $
Assumed to be
equal
2+ similar alternatives
Cost Benefit
Costs and benefits
in $
Can differ by type of
outcome
2+
interventions/programs
or 1 vs. benchmark
Presumed to differ,
but must be same
type of outcome
2+ alternatives
Cost
Costs in $, benefits
Effectiveness/Utility in non $ units
Considerations for Designing or Evaluating
Pharmacoeconomic Studies
• Costs
–
–
–
–
Direct medical – e.g., medication and administration
Direct non-medical – e.g., transportation for treatment
Indirect – e.g., lost wages due to illness
Intangible – e.g., pain, suffering
• Perspective
– Patient, Provider, Payer, Society
– Perspective dictates what costs are considered
Considerations for Designing or Evaluating
Pharmacoeconomic Studies
• Discounting - value of money changes over time
– A dollar is worth more today than in the future
• Sensitivity Analysis
– Challenges results and tests assumptions by altering
variables
• Accuracy and transparency
– Clearly documented study design, assumptions, inputs
• Face Validity
– Do the assumptions/input and alternatives reflect reality
Economic Modeling
• Analytic models used to predict economic
consequences of coverage, treatment, and
access decisions
– budget impact, cost effectiveness, cost minimization
– E.g., evaluate the impact of adding drug A to the
formulary
• Constructed by health plans, pharmaceutical
manufacturers, academic groups, and
consultants
Economic Modeling
• Good practice guidelines for model development
should utilized in constructing models
– Promote transparency, minimize bias
• Guidelines also exist to facilitate the evaluation
of pharmacoeconomic studies
Applications in Practice & Roles of the Pharmacist
• Assist in the design and implementation of research
studies
• Evaluate pharmacoeconomic literature
• Apply results to clinical decision making
–
–
–
–
Individual patient care
Formulary/utilization management
Disease management
Resource allocation
Helpful Resources
• Navarro RP, ed. Managed Care Pharmacy Practice. 2nd edition. Jones
and Bartlett Publishers: Sudbury, MA; 2009.
• Rice TH, Unruh L. The Economics of Health Reconsidered 3rd ed.
Chicago, IL. Health Administration Press, 2009.
• www.ispor.org
• http://www.ispor.org/workpaper/Modeling-Good-ResearchPractices-Overview.asp. Assessed Sept. 16, 2013.
• Husereau D, Drummond M, Petrou S, et al. Consolidated Health
Economic Evaluation Reporting Standards (CHEERS)—Explanation
and Elaboration: A Report of the ISPOR Health Economic Evaluation
Publication Guidelines Good Reporting Practices Task Force. Value
in Health. 2013; 16:231-250.
Conclusion
• Pharmacoeconomic evaluations consider cost
compared to consequences of treatment
alternatives
• Results are used to support population-level
decisions regarding medication coverage and
use
• Best-Practice principles should be used in
designing pharmacoeconomic studies to
optimize transparency and reduce bias
Thank you to AMCP member
Carrie McAdam-Marx for
updating this presentation for
2016.