PharmacoEconomics

Dep. Farmakologi dan Terapeutik,

Fakultas Kedokteran
Universitas Sumatera Utara
 Treatment cost for pneumonia
Long-term study, CCP-DPS GMU, December 1997 – March 2002

Average standard pneumonia treatment cost (Rp) Exchange rate to US$1 (Rp)
15000 16000

12000
12000

9000
8000
6000

4000
3000

0 0

Private pharmacy Private hospital Public hospital

Healthcenter Drug store Consumer Price Index
 Pharmaceutical spending, as % of total health
spending, is greatest in developing countries
Greece
Germany Developed countries
Italy
France (7 - 20%)
Spain
Denmark
UK
United States
Netherlands
Norway

Bulgaria Transitional countries

Czech Rep.
Hungary
(15 - 30%)
Croatia
Poland
Estonia
Slovenia
Lithuania

Mali
Egypt
China
Indonesia
Thailand
Tunisia Developing countries
Jordan
(24 - 66 %)
Argentina
South Africa

0 10 20 30 40 50 60 70
 PharmacoEconomics
• Adding drugs to the formulary involves careful
consideration of:
– Efficacy
– Safety
– Quality
– Cost
• Cost factors are becoming more important
• Science of pharmacoeconomics is emerging
– Pharmacoeconomics
– Cost (total resources consumed in producing a good
or service)
– Price (the amount of money required to purchase an
item)
Adding drugs to the formulary
clinic available Introduced
GI ulcer H2-antagonist PPI
Arthritis NSAID COXIB,
anti-TNF agents
Mental TCA SSRIs, Atypical
health Anti-Psychotics
Women’s - (osteoporosis) biphosphonate
health
AIDS - Protease
Inhibitors/cocktail
 Medical Outcomes
ECHO Model

Economic Clinical Humanistic

 Expense  Cure  Physical

 Savings  Comfort  Emotional
 Cost  Survival  Social
Avoidance
 Relationship between Outcomes,
Pharmacoeconomics and Pharmaceutical Care

pharmaco- outcomes
economics research

pharmaceutical
care
 Definition
• Economic outcomes measure that focuses
on the evaluation of pharmaceutical
products and pharmaceutical services

Clinical
Economic

Humanistic
 cost-minimization

cost-benefit Pharmacoeconomics cost-effectiveness

cost-utility
 Cost-Minimization Analysis
• Compares the total relevant cost-
difference between treatment
alternatives (products or services) that
are considered to produce identical
outcomes
Clinical

Economic

Humanistic
 Cost-Minimization Analysis
Examples:
• comparing an AB rated generic drug to its
brand name equivalent
• comparing the cost of a multiple dose
schedule to a once daily schedule that is
equally safe and effective
• analyzing the cost of administering and
monitoring the same drug in two different
settings
 Generically Equivalent
• Pharmaceutically equivalent
• Therapeutically equivalent
• The same drug with the same effect,
but the product is from a different
manufacturer
• AB rating in “Orange Book”
 Frothingham R.
"Me-Too" Products — Friend or Foe?
NEJM 350(20):2100-2101,2004
• The proliferation of "me-too" drugs leads to
beneficial cost reductions, but it may also put
patients at risk.
• Each me-too drug comes to the market with
limited clinical experience as compared with
compounds already in use.
– Five me-too drugs in the statin and quinolone classes
have been withdrawn or restricted because of serious
adverse effects that were not recognized until months
or years after their approval
– temafloxacin, grepafloxacin, cerivastatin, sparfloxacin,
and trovafloxacin.
• Therefore cost–safety issue has no simple
answer.
 Original vs "Me-Too" prices
Friend or Foe?
Nimesulide Pharmaceutical Co. Price (Rp)/100mg
Original
Aulin® Gala 2.950,-
Nimed® Schering 2.950,-
“Me-Too”
Arnid® Pharos 2.750,-
Ilusemin® Phapros (?)
Ximede® Combiphar 3.200,-
MOST EXPENSIVE
THERAPY

THERAPEUTIC
FAILURE
 Cost-Effectiveness Analysis
• Compares the total relevant cost of
therapy to the effectiveness when the
outcomes for the alternatives are NOT
equal
Clinical

Clinical
Economic
Economic

Humanistic
 Cost-Effectiveness Analysis

Example:
_____________________________________________________
Total Cost/ Lives Saved/ Average CE
100 Patients 100 Patients Ratio

Drug A $220,000 79 $2784.81/ life

saved

Drug B $20,000 78 $256.41/ life

saved
_____________________________________________________
 Cost-Effectiveness Analysis
Incremental Cost Effectiveness Ratio (ICER)

ICER = (cost of A – cost of B)

(effectiveness of A – effectiveness of B)

ICER = $220,000 - $20,000

79 Lives - 78 Lives
= $200,000 / live saved
 Cost-Effectiveness

• Cost-effectiveness = Good Value

• Cost effective strategy may NOT save
money
• Saving money is NOT always cost-effective
– original vs. me too
Cost-Effectiveness Analysis
Difference in costs

IV I
The new treatment is The new treatment is
Less effective and more more effective and
expensive more expensive
Difference in
effects
III II
The new treatment is The new treatment is
less effective and more effective and
less expensive less expensive

The four possible qualitative results in a cost effectiveness analysis

Cost-Effectiveness Analysis

Less $ More $

Worse A B
outcome

Better C D
outcome
 Cost Utility Analysis
• Evaluates the value of an intervention or
a program against the value of the
outcome in terms of quality-adjusted life
years (QALYs)

Clinical

Economic

Humanistic
 Cost Utility Analysis
Incremental Cost Utility Ratio (ICUR)

ICUR = Cost drug A - Cost drug B

QALY drug A - QALY drug B

QALY = length of life × quality of life

 Cost Utility Analysis
• Example:
_____________________________________________________
Total Years of x Utility = QALYs CU
Cost Life (LYs) Ratio
Drug A $20,000 3.5 0.75 2.6 $7619/QALY

Drug B $16,000 2.5 0.80 2.0 $8000/ QALY

_____________________________________________________
 Cost Utility Analysis
• ICUR = $ 20,000 - $ 16,000
2,6 QALYS - 2,0 QALYS

= $ 6400 / QALYS

Criteria for Interpreting Cost-utility Ratios

_____________________________________________________
Average CU Ratio Interpretation
______________________________________________________________________
Less than $20,000/QALY Good value
$20,000 to $100,000/QALY Intermediate value
More then $100,000/QALY Cost prohibitive
_____________________________________________________
 Cost-Benefit Analysis
Evaluates the value of all resources
consumed in implementing a program or
intervention against the value of the
outcome

Clinical

Economic

Humanistic
 Cost-Benefit Analysis
• Example:

_____________________________________________
Cost Benefit Average B:C Ratio
New Benefit/Cost
Service $25,000 $45,000 1.8:1
_____________________________________________
Commonly Prescribed Drugs

• Anti-inflammatory agents
• Analgesic agents
• Antimicrobial agents
(antibiotics, antifungal, antiviral)
• Corticosteroids
• Antianxiety/sedative agents
**Adjuvant analgesic agents**
 Outcome Measures

Clinical Humanistic
Disease Indicator Economic Outcome
Outcome Outcome
Renal failure
Cost/ mmHg BP
Stroke
Hypertension BP
MI
QOL Cost/stroke avoided
Cost/life year saved
Death
Angina
Cost/MI avoided
Hyperlipidemia LDL levels MI QOL
Cost/point  in LDL
Death
Retinopathy Cost/change in A1C
A1C Nephropathy
Diabetes QOL Cost/kidney transplant
BG levels Death avoided
Exacerbation
FEV, Cost/symptom free
Asthma event QOL
day
peak flow
Death
 Outcome Measures
for pain management
Clinical Humanistic Economic
Agent Indicator
Outcome Outcome Outcome
CV event Cost/ mmHg BP
NSAID pain GI event QOL Cost/stroke avoided
Renal failure Cost/life year saved

CELECOXIB Less CV event QOL Cost >>

IBUPROFEN Better GI event QOL Cost <<

 Critical evaluation
on selecting medicine

Therapeutic Adverse effect

effect Minimal Maximal
Maximal Yes ?
Minimal ? No
PHARMACOECONOMICS

A B
Cost

C D

Effectiveness
Kaskade peresepan di klinik pribadi
Keadaan awal terapi Simtom baru terapi ikutan

Nyeri
dengkul
AINS
Nyeri
ulu hati
antasida

konstipasi

laksansia
diare
dst
 PAIN

NSAID
Rp

water increase epigastric

PUB
retention BP pain

Anti-
Rp
diuretic Rp
hypertension Rp
misoprostol Rp
antacid

Prescribing Cascade
 PAIN
ALZHEIMER
CANCER DISEASE

NSAID=Rp

fluid increase heart

PUB
retention BP burn

Rp Rp Rp Rp
Iatrogenic Cost
 Pharmacoeconomics
pharmacotherapeutics
say NO say YES

- -New
- + Now what ?
$$ Medications
safety _
+++ do it!

Effectiveness
 Dangerous person
 Wishing to eliminate a  Wishing to eliminate a
president of another sign or symptom of a
country disease
 Bombing all areas of  Giving an expensive
the country drug & polypharmacy
 Killing the people in  Increasing ADRs &
that country iatrogenic disease
 Spending a lot of
 Spending 20 M US$
money
 But then offering only  But it cloud be then
200,000 US$ to whom overcome by the
could bring the head of cheapest drug
the president
KEBANGGAAN INDONESIA
UNTUK DUNIA
announcement and invitation

KEBANGGAAN INDONESIA
UNTUK DUNIA
Is evidence really evidence?
The Evidence Pyramid
META-ANALYSIS

DB
RCT
RCT
Cohort studies
Case control studies

Case series

Case reports

Ideas, editorials, opinions

Animal research
In vitro (“test tube”) research
 Very few studies have been
published at the time of approval!
Cipralex
Zyban
Vioxx
Synagis
Subutex
Sonata
Reminyl
Relenza
Nexium
Celebra
Avandia

0 10 20 30 40 50
Number of studies

Published studies Finished studies