Presented by Gihan Hamdy, Msc

Team Leader of Hospital Pharmacy Administration

CAPA

 Approaches To Economic Evaluation

Types Of Pharmacoeconomics Studies
Evaluation Of Economic Research
articles

 Modeling

Adv: provide long term follow up data on costs &

outcomes
Based on clinical trials

Cost effectiveness alongside clinical trials

Adv: more accurate but not represent all people

(small sample size & clinical care doesnt reflect real
world )

Types Of Pharmacoeconomics
Studies

Cost effectiveness alongside clinical trials

Types of Pharmacoeconomics studies
Methodology

Cost measurement unit

Outcome unit

Cost minimization

Dollars

Various- but equivalent

in comparative groups

Cost benefit

Dollars

Dollars

Cost effectiveness

Dollars

Natural units (life

years, mg/dl blood
sugar, LDL cholesterol)

Cost utility

Dollars

Quality adjusted life

years

Estimates the cost of a disease on a

defined population

Not commonly used, just list of

consequences (no calculations)

 CEA is the most common type used of pharmacoeconomic

analysis.
It measures outcomes in natural health units that indicate
an improvement in health such as lives saved or blood
pressure reductions.
The health units are common outcome that are routinely
measured in clinical trials. (adv)
Alternatives used in the comparison must have outcomes
that are measured in the same clinical unit. (disadv)

Drug A

Drug B

Drug C

Cost

600 $ per year

210 $ per year

530 $ per year

GI SFDs
/year

130 days

200 days

250 days

% ulcer Healed

50 %

70 %

80 %

Cost drugB Cost drugA

outcome drugB outcome drugA

ICER= Cost for each unit in health improvement (per extra SFD)

Method 3: Incremental Cost-effectiveness ratios

dominant

Drug A

Drug B

Drug C

Cost

600 $ per year

210 $ per year

530 $ per year

GI SFDs
/year

130 days

200 days

250 days

% ulcer Healed

50 %

70 %

80 %

Cost drugB Cost drugA

outcome drugB outcome drugA
=

Cost for each unit in health improvement (per extra healed ulcer)

Ratio of the difference in costs divided by the difference in outcomes

The aim of the study is to compare the costs and effectivness

of 2 new adjunctive therapies, Breathagain and
Asthmabegone with ICS use alone.

Asthma begone had similar effectiveness but at lower cost..

 The types of interventions that can be evaluated are limited.

A common example of a CMA is the comparison of generic
equivalents of the same drug entity.
Another example :
Measuring the costs of receiving the same medication in different
settings.
e.g. receiving intravenous antibiotics in a hospital vs home

Type of costs

Costs for
Outpatients

Costs for
Inpatients

Statistical
difference

Labor costs

575

902

Yes p 0.002

Delivery costs

471

453

No p 0.754

Pharmacy costs

150

175

No p 0.384

Hospital costs

3835

5049

Yes p 0.015

The perspective was that of the payer, so only direct medical costs were
included.

The objective of the study was to compare the cost

of Oncoplatin given in two doses with Oncoplatin
combined with NoNausea administered in one
dose.

 Different types of health outcomes & diseases with multiple

outcome of interest can be compared i.e QALY(Adv.) but CEA
Using 1 common unit.
CUA incorporate morbidity & mortality into this one common
unit.
No accurate utility or QALY value (Disadv.)
i.e blood pressure or cholesterol level is more accurate

Cost Utility Analysis

The three most common methods for determining preference or utility
scores:
Rating Scale
Standard Gamble
Time Trade Off
For each method, a disease state or condition is described to subjects where
this condition fall between 0.0 (dead) & 1.0 (perfect health).

Cost Utility Analysis

Utility score
100(1.0)

Disease state

Perfect health

90(0.9)
80(0.8)
70(0.7)
60(0.6)
50(0.5)
40(0.4)
30(0.3)
20(0.2)
10(0.1)
0(0.0)

Dead

Subjects are told to

mark an X between the
2 extremes to indicate
their preferences

Cost Utility Analysis

COST FOR TREATMENT

YEARS OF LIFE
SAVED

UTILITY FOR
EACH YEAR OF
LIFE SAVED

QALYs

DRUG A

$10,000

0.8

4.0

DRUG B

$20,000

0.5

3.5

Drug B is cost
effective

Calculation

Result

CEA

$20,000-10,000/(7-5 Years(

$5,000
Per extra year of life

CUA

$20,000-10,000/(3.5-4.0 QALYs(

Drug A dominant

Utility scores were collected via Time trade off

Conducted by reducing cost estimates using the

clinics cost to charge ratio of 0.83:1 and by varying
the days of survival by their 95%
confidence interval.
Learning this information is helpful because if
there is significant uncertainty in an important
parameter, then you would want to be cautious in
your interpretation of the results.

Incremental cost utility ratio estimate the added costs for the added
benefit of a treatment but it doesnt quantify if the added cost is worth
paying for the added benefit??
Ex:
Oncoplatin cost 3000 $ more than Oncotaxel & produced
An additional 0.04 QALY (Inc.Ratio $ 75000 per extra QALY)

Is Oncoplatin more cost effective than Oncotaxel??

It depends on the value of a QALY.

Intervention

Cost effectiveness ratio

Benefit to cost ratio

AIDS Awareness program

$230,000/case prevented

8.4:1

Vaccination program

Lower ratios
indicate
lower costs
$104,000/case prevented(preferred
options)

The
higher
,the more
cost
beneficial

0.3:1

It compares costs & benefits in monetary units.

Smoking cessation
$3700/quit
6.7:1
intervention
Many different outcomes can be compared (adv).
Placing economic values on medical outcomes is not an easy task(disadv).

Direct medical

Direct nonmedical
Costs ($)
benefits($)
Intangible benefits

Direct benefits
Indirect benefits
Direct
medical
savings

Direct non
medical
savings

productivity
Human capital

Patient preferences
Pain & suffering

Willingness to pay

No of days/year (365) - No of weekend days Days of vacations Sick leave days = 240
days

The aim of the study is to conduct an economic analysis to

determine if requiring all US senior pharmacy students to
be vaccinated against Roseolitis would be cost beneficial

Cost

Effectiveness