Pharmacoeconomics

the study of how people use their scare resources to satisfy their unlimited wants/incentives

the branch of economics that focuses on issues related to efficiency, effectiveness, value, and behavior in the production and consumption of health and healthcare

the process that identifies, measures, and compares the costs, risks, and benefits of pharmaceutical products, services, or programs

-determines which alternative products the best health outcome for the resources invested
-attempts to find if the added benefit of a product is worth the added costs of the product
-compares costs vs. benefits/consequences of alternatives
-sub-discipline of health economics

guide optimal healthcare resource allocation, in a standardized and scientifically grounded manner

-can it work? does it do more good than harm to society?--answers efficacy
-does it work? does it do more good than harm to those offered it?--answers effectiveness or usefulness
-Is it reaching those who need it? accessible to those who could benefit from it?--answers availability/access

\$3.8 trillion (17.7% of GDP)

about 9%

healthcare received given the costs of care

demographic, clinical, and economic considerations

service/program

cost effective options:
-develop drug use guidelines for insurance coverage
-determine medication list on formulary and co-pay amount

-escalating healthcare expenditures
-rapid development in medical technology
-changes in reimbursement incentives
-changes in clinical practice
-limited healthcare resources

-cost-minimization analysis (CMA)
-cost-effectiveness analysis (CEA)
-cost-consequence analysis (CCA)
-cost-utility analysis (CUA)
-cost-benefit analysis (CBA)

cost in dollars

how the health outcomes are measures and compared

an economic term that describes whose costs are relevant based on the purpose of the study

-society
-health-care providers (hospital, clinic)
-payer (medicaid, private insurance)
-Individual patients
-employer

-all direct medical and nonmedical costs: hospitalization, long-term care, home care, social welfare services
-productivity losses
-Intangible costs

include actual costs to treat patient

average reimbursement costs

costs to patient: patient out of pocket costs, deductible, copays, coinsurance, lost wages, transport

-all insurable direct costs
-productivity losses
-disability

-outcome measurement: proven identical or shown to be equivalent in all relevant aspects
-decision rule is lowest monetary cost

-outcome measurement: all outcomes translated in monetary units
-decision rule: net monetary gain, B>C

-outcome measurement: nonmonetary physical units of effectiveness
-decision rule: CE ratios using incremental

-outcome measurement: utility values and quality adjusted life years (QALYs)
-decision rule: cost per QALY

-outcome measurement: combination of quality of life and natural units
-decision rule: choice left up to decision maker

-individual patient care
-formularytilization management
-disease management
-resource allocation

false. may result in it but not only goal

clinical, economic, and humanistic outcomes, not just cost containment

false. DUE focuses on assessing appropriateness of drug use and may use quantitative and/or qualitative approaches

false. outcomes research is a broad discipline that involves evaluating the impact of healthcare interventions and could be clinical, economic, or humanistic

false. CBA includes all benefits by incorporating individual preferences using contingent valuation or willingness to pay method

cost analyses