Transcript WHAT is Economic Evaluation?

Discussion Questions
What to Do About High Drug Costs
• What can you as a pharmacist do to help your
patients?
• What can our institution do to better control costs?
• What policies could help moderate drug costs?
• What role can the formulary play in these efforts?
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Many People Involved in
Pharmaceutical Supply-Chain
Wholesalers
Providers
Clinicians
Employers
Insurers
Generics
PBMS
Branded
Drug Cos
Govt’
Govt’
Patients
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WHAT is Economic Evaluation?
• Definition: Economic Evaluation is ...
the identification, measure, and comparison
of the costs (i.e. resources consumed) and
outcomes (clinical, economic, and
humanistic) of interventions
(pharmaceuticals, non-drug therapies, public
health programs)
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WHAT is Economic Evaluation?
• Economic Evaluation is NOT JUST economics
• Economic Evaluation is multi-disciplinary, it
combines
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Economics
Epidemiology
Biostatistics
Medicine
Pharmacy
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Why study Economic Evaluation?
• The pressure of cost containment.
• The need for methods to evaluate
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medical interventions.
Purpose of economic evaluation
 efficient resource allocation
NOTE: equity is often not addressed
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Who uses Economic Evaluation?
• Managers in hospital or health care
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plans (formulary decision)
Pharmaceutical companies
Government / Policy makers
Researchers
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Who uses Economic Evaluation?
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Hospital managers (including HMOs and FFS)
• What drugs should be included on the hospital
formulary?
• Which drug delivery system is the best for the
hospital?
Pharmaceutical companies
• What is the best drug for a pharmaceutical
company to develop?
• Shall the company continue a clinical trial?
• What is the economic benefit of a new product?
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Who uses Economic Evaluation?
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Government
• Which drugs should be included in a Medicaid
formulary?
• Is it cost-effective for Medicare to cover annual
mammography?
Researchers
• All of the above
• How to improve the analytical credibility of economic
evaluation ?
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Costs can be described in many
ways
• Cost / unit (cost/tab, cost/vial)
• Cost / treatment
• Cost / person
• Cost / person / year
• Cost / case prevented
• Cost / life saved
• Cost / DALY (disability-adjusted life year)
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Outcomes
• Both positive and negative outcomes
should be addressed
• Positive outcomes: drug’s efficacy
measure
• Negative outcomes: ADR and
treatment failure
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Pharmacoeconomics
• is a set of methods to evaluate
the(ECHO)
1.Economic,
2.Clinical, and
3.Humanistic
4.Outcomes of pharmaceutical products
and services(or any health care service)
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Outcomes Relationship
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Pharmacoeconomics allows us
to compare the economic resources
consumed(inputs) to produce the
health and economic consequences of
products or services(outcomes).
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Application of Pharmacoeconomics:
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Pricing of a new drug
Re-pricing of an old drug
Generation of a data for promotional material
Legislative requirement for drug licensing and medical
reimbursement
Justify clinical pharmacy evaluation
Used to justify use of pharmacy products and
pharmaceutical care
Principle of Pharmacoeconomic also influences health
care decision making and individual patient care
Earlier clinical decisions were solely based on
outcomes. Now cost, outcome, humanistic
outcome are also considered
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Cost of drug:
• This is the total resources consumed in
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producing the drug or drug formulation.
It is the amount paid to the suppliers.
To evaluate the economics of drug
therapy,cost is categorized into:
i. Direct cost.
ii. Indirect cost.
iii. Intangible cost
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Direct cost
i.) Direct medical cost
This is what is paid for specialized health resources and
services. It includes the
– Physician’s salaries;
– Acquisition cost of medicine
– Consumables associated with drug administration
– Staff time in preparation and administration of medicines
– Laboratory costs of monitoring for effectiveness and adverse
drug reactions.
ii.) Direct non medical cost
This includes cost necessary to enable an individual receive
medical care such as lodging,special diet and transportation;
lost work time(important to employers) such as acute Otitis
media in pediatric patients with professional parents who lost
work time during the treatment of their kid.
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Indirect cost
• This is the cost incurred by the patient,
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family,friends or society. Many of these are
difficult to measure,but should be of concern
to society as a whole.
This includes productivity loss in the society;
unpaid care givers; lost wages; expenses of
illness borne by patients, relatives, friends,
employers and the government and; loss of
leisure time.
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Intangible costs
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These are costs related with the patient’s pain and
suffering; worry and other distress of the family
members of a patient; effect on quality of life and
health perceptions.
For example patients of rheumatoid arthritis, cancer or
having terminal illnesses in which quality of life is
suffered due to adverse reactions of the drug
treatment.
These are difficult to measure in monetary terms but
represent a considerable concern for both doctors
and patients.
Quality adjusted life year (QALY)is one method by
which intangible costs can be effectively integrated in
PE analysis
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Costs
• Direct costs: costs to deliver services
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topatient; both medical and non-medical
Indirect costs: cost of treatment to
patient or society
Intangible costs: quality of life
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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)
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Cost of Illness Evaluation
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Also termed, cost consequence model
Description: Estimates the cost of a disease
on a defined population
Application: Provides a baseline against which
various prevention/treatment options may be
compared
Example: Cost of peptic ulcer disease
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Cost Minimization Analysis
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Description: Identifies the least expensive/costly
alternative assuming the alternatives are equal in
either consequence or outcome
Application: Can only be utilized when consequences
or outcomes are identical
Costs include more than the price of meds
 Costs of treatment failure
 Costs of adverse effects
 Drug monitoring or other healthcare services
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Cost Benefit Analysis
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Description: Measures benefit in monetary units
and computes net gain following considering the
costs of the intervention
Calculated: Benefit ($)/Cost ($)
Application: Compare programs or agents with
different objectives
Example: Clinical pharmacy service vs. other
institutional service
Determines whether benefits > cost
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Examples CBA
• AIDS prevention and awareness
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programs
Smoking cessation intervention
Diabetes drug adherence
Breast cancer screening
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Cost Effectiveness Analysis
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Description: Compares alternatives based on a
single therapeutic effect measured in physical units
Calculated: Cost ($)/Clinical Outcome (not in $)
Clinical Outcomes: Could consist of a higher positive
effect, or less negative effect
Application: Compare drugs/programs that differ in
clinical outcomes but use same unit of benefit
Example: Antihypertensive Drug A vs Drug B on
mmHg blood pressure ($/mmHg)
Application: Focus on Incremental Cost
Effectiveness Ratio (ICER).
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Incremental Cost Effectiveness Ratio
(ICER)
is an equation used commonly in health
economics to provide a practical approach to
decision making regarding health interventions.
It is typically used in cost-effectiveness analysis.
ICER is the ratio of the change in costs to
incremental benefits of a therapeutic
intervention or treatment
ICER = (C1 – C2) / (E1 – E2)
where C1 and E1 are the cost and effect in the intervention or treatment group and
where C2 and E2 are the cost and effect in the control care group.
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Difference in cost
Consider the four possible results arising in
a CEA. First, if costs are lower and health
benefits higher for one drug relative to
another, the former is said to dominate and
would be the preferred treatment (quadrant
II). Second, the opposite applies, i.e. the
new drug is more expensive and less
effective, and thus is considered inferior
and not recommended (quadrant IV).
The third and most common case is where the new drug is both more effective and
more expensive than the standard (quadrant I); on the basis of ICERs, a judgment
must be made regarding whether the additional benefits are worth the extra costs of
the new drug and, therefore, whether it is ‘cost effective’ This might be defined by a
previously agreed ICER threshold value. The fourth case is similar to the third, with
the roles of the new therapy and the standard reversed (quadrant III); the question
now is whether the extra benefits provided by the standard justify the additional
costs of retaining it as the preferred treatment when the option of a new, cheaper but
less effective drug exists
Asia Journal of Pharmaceutical and Clinical Research Vol2, issue 3, July-Sept 2009
The cost-effectiveness plane
Med Decis Making 1990 10:212–214.
Cost Utility Analysis
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Description: Compares alternatives based on
therapeutic effects measured in utility units (not
physical units). Utility scores integrate patient
preferences and quality of life/functional status
Calculated: Cost ($)/QALY (quality adjusted life years)
Application: Compares drugs/programs that are life
extending with serious ADRs or those producing
reductions in morbidity
Example: Cancer chemotherapy regimens:
4 years at 25% QOL = 1 year at 100% QOL
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Considerations for Designing or
Evaluating Pharmacoeconomic Studies
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Costs
• E.g., Direct medical/nonmedical, indirect,
opportunity, intangible
Perspective
• E.g., Patient, Provider, Payer, Society
Discounting-Value of money changes depending
on when it is exchanged (i.e. Inflation)
Sensitivity Analysis-Challenges results by altering
certain variables independently
Accuracy and transparency
• E.g., Alternatives, study population, study design
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Cost-Effective ≠ Cost-Saving!!!
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Cost-Saving vs. Cost-Effective
• Cost-saving
• An intervention that has a lower total cost than an
alternative intervention
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Cost-effective
• An intervention that is sufficiently effective relative
to its total cost when compared with an alternative
intervention
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How Can PE and Outcomes Enhance My
Practice?
• PE is an aid to decision making with strong
potential to:
• Mitigate the influence of marketing
 Puts practitioner in the driver’s seat
• Help set practice priorities
• Enhances position of practitioner from payer’s
perspective
 Medicare plans to decrease pay-out to stem tide of budget
deficit
 Private payers actively are developing quality “report
cards”
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Types of Economic Evaluation
Methodology
Cost measurement unit
Cost minimization
Dollars
Cost benefit
Dollars
Outcome unit
Various- but equivalent
in comparative groups
Dollars
Cost effectiveness
Dollars
Natural units (life years,
mg/dl blood sugar, LDL
cholesterol)
Cost utility
Dollars
Quality adjusted life
years
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Common Misconceptions When Applying
Pharmacoeconomic Principles
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Cost-effective care is initially the cheapest alternative
in a manner similar to other investments, least cost
option may lead to greater costs downstream
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Cost-effective care is outcome that generates
“biggest” effect in a manner to similar investments,
smaller increments of outcome may be achieved at a
lower overall cost
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Perspective
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The “point of view” considered in economic
analyses influences the outcomes and costs
considered to be most relevant:
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Provider
Patient
Payer
Society
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Treatment of Pain Resulting from
Osteoarthritis
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Pain results in significant disability and resource utilization
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G NSAIDs
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affects 15% of US population
results in > 100,000 hospitalizations annually
effective pain relief
24 – 30% the cost of Cox-II inhibitors
associated with a significant risk of adverse effects
 Dyspeptic symptoms
 More serious non-dyspeptic effects- symptomatic ulcers, ulcer hemorrhage, ulcer
perforation
Cox- II inhibitors
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effective pain relief
substantially more expensive than NSAIDs
associated with lower risk of GI side effects
Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)
How should I treat my patient?
• NSAIDs are inexpensive compared to CoxII inhibitor:
• But won’t the more expensive agent pay for
itself many times over by preventing an
expensive GI bleed in my patient?
 Dyspeptic symptoms are decreased by 15%
 Clinically significant ulcer complications are reduced
by 50%
Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)
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Risk of GI bleed: How Much Can It
Be Altered?
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Not all osteoarthritis patients have an equal
risk of developing a GI bleed
• Is paying extra for GI protection justified in all patients?
How much can the risk of GI bleed be altered
by using a Cox-II inhibitor instead of an
NSAID?
• What value is really purchased for the extra cost?
• The relative risk reduction of GI complications with Cox-II
inhibitor catches our eye- but actual risk reduction is small
 1-2% for overall ulcer complications
 1% for serious hemorrhage and perforation
Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)
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Cost-effectiveness analysis
Population
No Hx of GI
ulcer
Drug
Total Annual
Cost
Qualys
Gained
Incremental cost
per Qualy gained
Naproxen
$4,859
15.2613
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Cox-II inhibitor
$16,443
15.3033
$275,809
Naproxen
$14,294
14.7235
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Cox-II inhibitor
$19,015
14.8081
$55,803
Hx of GI ulcer
Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)
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Cardiovascular Effect of Cox-II Inhibitors
Population
Drug
Annual
Cost
Qualys
Gained
Incremental cost
per Qualy gained
Naproxen
$5,037
15.2539
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Cox-II
$16,620
15.2832
$395,324
All patients
Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)
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Clinical Decision Making
• Risk reduction for GI complications seen with
Cox-II inhibitors is unlikely to offset their
increased cost in the management of average
risk patients with osteoarthritis pain
• With no history of GI bleed, choose naproxen
• With history of GI bleed, choose Cox-II inhibitor
Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)
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Clinical Decision Making
• In all patients with osteoarthritis, the decision
to use Cox-II inhibitor should be made with
awareness of the effect of the added risk for
cardiovascular events on cost-effectiveness
• Currently, there is not enough information
available, but it may be prudent to avoid these
drugs in patients with cardiovascular history, even
in patients with history of GI bleed
Spiegel MR et al. Annals Internal Medicine 2003; 138:10(795-806)
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Cost-effective Outcomes
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Decrease drug–drug and drug–lab interactions
Increase the percentage of patients in therapeutic control.
Reduce the overall costs of the treatment by utilizing more
efficient modes of therapy
Reduce the unnecessary use of emergency rooms and medical
facilities
Contribute to better use of health manpower by utilizing
automation, telemedicine,
and technicians
Decrease the incidence and intensity of iatrogenic disease, such
as adverse
drug reactions
J Clin Oncol 23(10):2123–9
Primary reason for pharmacist
intervention
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Decrease potential adverse event
Increase efficacy
Reduced morbidity or mortality
Symptom control
Cost savings
Decrease actual adverse drug effects
Assist compliance
Formulary reasons
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Change in drug therapy or management
• Change in dosage of drug
• Drug treatment initiated
• Drug treatment discontinued
• Alteration to patient monitoring
• Change from one drug to another
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Impact of pharmacist-initiated change in
drug therapy or management quantified
British Journal of Clinical Pharmacology 57(4), 513-521
Benefit of pharmaceutical care
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The potential savings quantified arose from pharmacistinitiated interventions that resulted from only 3.8% of
pharmacist’s clinical practice time.
Benefits of other activities performed were not quantify
: drug information, patient medication counselling, staff
education, drug use evaluation, research, student
education and training, dispensing and administrative.
On the five areas quantified in this study : every dollar
spent on a pharmacist, approximately $23 save.
British Journal of Clinical Pharmacology 57(4), 513-521
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2nd ATS Workshop PCEHM guidelines
its application to critically ill patients should caution the
following:
1. evidence for the effectiveness of interventions in the ICU is
often lacking
2. care in the ICU often does not provide for a cure but stabilizes
patients
3. ICU patients vary substantially, and the costs and outcomes
associated with therapy vary depending on the type of ICU
4. ICU outcome measures are not suited for economic analyses
and are often difficult to measure
5. assigning a value to the quality of end-of-life care and its impact
on family members of ICU patients is difficult
6. costs are not define and measured in consistent ways
ATS: American Thoracic Society
PEGM: Panel on Cost-effectiveness in Health and Medicine
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For ICU pharmaceuticals v.s. economic
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This tactic for cost minimization runs the risk of
determining drug therapy based only on acquisition
costs.
When competing drugs are considered
therapeutically equivalent, may dilute the benefits of
newer drugs
We need to evaluate the impact of cost-reduction
efforts on the quality of care
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Provide optimal pharmacotherapy at an
appropriate cost in critically ill patients
• Anti-microbial
• Sedatives and neuromuscular blockers
• The Drug-Use and Disease-State
Management (DUDSM) Program
CritCare Med 2003 Vol. 31, No. 1 (Suppl.)
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Anti-microbial
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The percentage of the drug budget spent on
antibiotics ranges from 10%-60% or >60%
Even with a selective list of available drugs, there
needs to be guidance on drug selection, dosing, and
monitoring in the form of protocols or algorithms to
enhance the chance of success.
The patient is evaluated for conversion of parenteral
to oral antibiotics after 48–72 hrs of intravenous
antibiotic therapy.
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Sedatives
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A large percentage of ICU patients receive
sedatives to treat agitation, and the costs of
managing these patients are predicted to be high.
The clinical and economic impact of sedatives in
ICU patients, drug costs were significantly reduced
in the protocol-driven group.
Ventilator times and lengths of stay were shorter in
the follow-up group, without a compromise in the
quality of care.
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Neuromuscular blockers
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Minimizing the usage of neuromuscular blocker
exposure is important because prolonged
paralysis has been reported with these agents
and the additional costs associated with this
problem is in excess of $66,000 per patient.
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DUDSM Program
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The DUDSM program identifies therapeutic
opportunities for optimizing drug use from analysis
of high-volume drug use, cost, disease state, and
resource utilization.
The DUDSM ICU guidelines focus on agent
selection, indication for use, mode of
administration, and monitoring process.
Guidelines for new therapeutic entities are created
to set practice patterns as agents are approved for
general marketing vs. after practice patterns are
established.
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The benefits of pharmacist in ICU
• SCCM best practice model document:
“the presence of a critical care
pharmacist can decrease adverse drug
events and reduce cost of care”
SCCM : Society of Critical Care Medicine
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Flowchart of the formulary decisionmaking process
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Application in the formulary process with
CEA
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The CEA is constructed to identify the most costeffective therapy when the goal is provide the highestquality pharmaceutical care within a fixed budget.
To be informative, the drug alternatives in the analysis
should include all reasonable options and baseline
comparator.
It can be used to evaluate the economic impact of a
formulary decision if head-to-head data are available.
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Cost and Effect measured
• Cost: measure in dollars and compared with
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the effects or improvements of treatments.
Effect: final outcome and intermediate
outcome.
- final outcome: lives saved, life-years saved,
cases prevented, rates of specific side effect
- intermediate outcome: the relationship
between the intermediate and final outcome
measure can be estimated.
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AMCP guide of
formulary submission checklist
• Product information
• Supporting clinical information
• Supporting economic information
• Cost impact assessment
• Outcomes impact assessment
AMCP:Academy of Managed Care Pharmacy
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Medication formulary system
management
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Should be based on clinical, ethical, legal, social,
philosophical, quality-of-life, safety, and
pharmacoeconomic factors that result in optimal
patient care.
Must include the active and direct involvement of
physicians, pharmacists, and other appropriate health
care professionals.
To declare that decisions on the management of
medication formulary system should not be based
solely on economic factors.
ASHP policy 9830
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Evidence of the economic benefit of
clinical pharmacy services:
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Drug therapy evaluation (benefit:cost ratio=31.92:1)
Drug information
Adverse drug reaction monitoring(benefit:cost
ratio=2988.57:1)
Drug protocol management
Medical rounds participation
Admission drug histories
Pharmacotherapy 2003;23(1):113-132
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Evidence of the value of the
pharmacist
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In a study evaluating the effect of pharmacists providing
pharmaceutical care services on the economic
outcomes of patient care, an average benefit of $16.70
of value to the health care system was realized for each
$1 invested in clinical pharmacy services.
Pharmacotherapy 1996; 16(6):1188-208
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Evidence of the value of the
pharmacist-for cost saved
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Pharmacists collaborating with physicians to care for
high-risk patients reduced the number of prescriptions
per patient and saved nearly $600 per year per
patient in drug costs.
Journal of Family Practice. 1995; Nov.; 41(5):469-78
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Pharmacists providing disease management services
in their community saved an average of $2700 per
year per patient in total medical costs.
Clinical Therapeutics 1997 19(1); 113-23
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Evidence of the value of the pharmacist for adverse events avoided
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As hospitals increased the number of pharmacists
providing pharmaceutical care, medication errors have
decreased by over 65%.
Pharmacotherapy. 2002:22(2):134-47
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Pharmacists providing pharmaceutical care services in an
intensive care unit decreased adverse events by 66%
and saved $270,000 by avoiding adverse events.
JAMA 1999 Jul 21; 282(3):267-70
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Applications in Practice & Roles of
the Pharmacist
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Assist in the design and implementation of
research studies
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Evaluate pharmacoeconomic literature
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Apply results to clinical decision making
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Individual patient care
Formulary/utilization management
Disease management
Resource allocation
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抗癌藥物肥了企業 瘦了病患荷包？
8月25日，全球最大的生技公司安進（Amgen）表示，將以104億美元
收購美國的奧尼克斯（Onyx），奧尼克斯的珍寶即為治療多發性骨髓
瘤的Kyprolis。隔天，英國藥廠阿斯特捷利康（AstraZeneca）宣佈併購
Amplimmune；Amplimmune正試圖找出觸發免疫系統對抗癌症的方式。
之所以有如此多生技公司跨足腫瘤醫學，原因有三。其一為醫界對癌症
的理解快速進展；二十世紀時，癌症治療多半倚賴外科、放射線和化學
治療，但現在看來像是發展未完全的療法。免疫療法已經從理論步入實
務，基因組學的發展讓科學家得以找出引發癌症的特定變異，另一個令
人興奮的領域則是表觀遺傳學。
其二，監管機構已加快核准抗癌藥物的流程。美國食品藥物管理局2012年核可的39種藥物之中，有11種是抗癌藥物。Kyprolis就是
其中之一，Kyprolis甚至獲得了「加速核可」，作為多發性骨髓瘤病患的最後一道治療防線。第三項，也是最具爭議性的因素，就是
抗癌藥物價格昂貴，特別是在美國；Kyprolis的典型療程需時5個月，價格高達5萬美元。
因此，大藥廠想藉由合夥和購併的方式，開發自己的抗癌藥物，這點並不令人意外。Kyprolis最早是由一家名為Proteolix的小公司所
開發，後來這家公司被奧尼克斯收購，接著奧尼克斯又被安進購併。2009年，必治妥施貴寶（Bristol-Myers Squibb）以24億美元買
下Medarex，因為Medarex擁有一種實驗性的免疫療法藥物，目前該藥物的完整療程要價12萬美元。
然而，雖然商機誘人，但也存在極高風險。就算是前景極佳的藥品，最終也有可能會以失敗收場。美國食品藥物管理局核可Kyprolis，
但病人必須先試過至少兩種療法之後才能使用；高盛預估Kyprolis年銷售可達30億美元，前提是獲得美國以外的國家核可。阿斯特捷
利康收購Amplimmune，主因即為兩種仍處於早期測試的抗癌藥物；阿斯特捷利康的高層人員加萊（Bahija Jallal）表示，想要在這
個領域生存，就必須願意承受風險。
但長期而言，最大的問題在於，醫療保險業者和政府願不願意繼續付帳。奧尼克斯和拜耳（Bayer）共享腎臟癌藥物Nexavar的利潤，
去年印度的監管機關給予某家當地企業「強制授權」，允許該企業銷售Nexavar的複製品，而且價格比拜耳低廉許多。其他地區的回
應則沒有那麼激烈，但藥廠的高額訂價已開始引發反彈，特別是在歐洲。4月時，超過100名慢性骨髓性白血病專家，聯名反對藥物
的高昂價格。不過，目前安進仍可以繼續以高昂的價格銷售Kyprolis
The Economist Newspaper Limited 2013
GUIDELINES FOR PHARMACOECONOMICS
EVALUATIONS
1. The perspective of the study should ideally be applicable to
the society.
2. Demographic characteristics of the target population should
be identified.
3. Conceptual and practical reasons for choosing the
comparator should be set out and justified.
4. Treatment paths of the options being compared should be
identified and fully described.
5. The study should use recognized techniques of analysis and
should be justified.
6. Clinical outcome measures should be identified.
7. All relevant costs should be identified, collected and reported.
8. Discounting should be undertaken considering the time lapse.
9. Sensitivity of analysis should be conducted and reported.
10. Comparisons with results from other studies are handled with
care
30th Nov. 2013
Conclusions
•
•
•
•
•
Pharmacoeconomics can guide choices among alternative
medications, treatment regimens and services based on a
combination of costs and outcomes.
Is a young science, which is still testing its methodology.
The science will improve with application and value of the
analysis to clinicians. Principle and methods balances the
cost and outcomes and provides the best possible health
care to the with available resources.
Time and money can only be spent once- choice is
inevitable. Whether done unconsciously or with a consistent
process, healthcare professionals are constantly evaluating
patients care choices &acting on them.
Results and interpretation of pharmacoeconomic studies are
influenced by the perspective of the study—there is no one
“right” answer.
30th Nov. 2013
Thanks for Your
Attention !!