CHAPTER:3Applications of Pharmacoeconomics

BYMrs. K.SHAILAJA., M. PHARM.,LECTURERDEPT OF PHARMACY PRACTICE,SRM COLLEGE OF PHARMACY

PE Applications To provide pharmacoeconomics and outcomes research, education, and consulting services to assess the value of pharmaceutical products and services in today’s healthcare systems.Summary of Services:

Research services– customized PE and OR studies– site or population-specific economic models– partnerships with HC organizations

Educational services– PE lectures and workshops– PE educational materials

Consulting services– protocol design and strategic PE plans

Primary PE Applications

Drug TherapyEvaluations

Justify PharmaceuticalCare Services

Potential Hurdles for Application of PE to Drug Decision-Making

Lack of “PE sophistication” by target audience (e.g. hospital administrators, MC pharmacy directors) Lack of “PE sophistication” by pharmacy practitioners who are generating and/or interpreting PE dataLack of organizational resources (time and $$)Component vs. system management approachBudget responsibilities“Silo” mentality

HOW Pharmacoeconomics is Applied in the Real World

Strategies for Putting Theory into Practice

Strategy 1:Interpret, critique, and use results from studies published in the literature

Strategy 2:Utilize economic modeling

Strategy 3:Conduct a local observational PE evaluation

Factors to Consider When Selecting an “Application Strategy”

What is the PE question being asked?What is the timeframe for the decision?What are the resources and data sources available?What is the impact of the decision on organizational costs and quality of care?

(Potential Impact of Decision on Cost And Quality)

Compare acquisitioncosts

Perform economicmodeling

Conduct retrospective

study

Conduct prospectivestudy

Review PE literature, conduct sensitivity

analysis

None Mild Moderate Extreme

(Application Strategy)

Scale for Selecting a PE Application Strategy

Strategy 1: Use the Literature

ADVANTAGESData often plentifulQuickInexpensiveSubject to peer-reviewVariety of results can be examinedResults from RCT

DISADVANTAGESResults from RCT (costs may be protocol driven)External validityPlacebo-controlledMisuse of PE termsVariations in quality of studies published

Strategy 2: Use Economic Modeling

ADVANTAGESInexpensiveQuickYields organization-specific resultsBridges efficacy to effectivenessData collection is unobtrusiveIncreased ability to generalize results

DISADVANTAGESResults dependent on assumptionsPotential for researcher biasControversialReluctance of decision-makers to accept resultsMay require a meta-analysis of the literature

Strategy 3: Conduct a Local Observational Study

ADVANTAGESFlexibleYields provider-specific dataReflects “usual care” or effectivenessUsually offer comparative dataData from multiple sources can be usedAre less expensive than RCT

DISADVANTAGESExpensive (time and $)Difficult to control and randomizePotential for patient selection biasSmall sample sizeMay be difficult to generalize results to other patient populations and providers

Source Advantages Disadvantages

RCT Measure efficacyWell controlledPowered to detect statisticallysignificant differencesOffer sufficient sample sizeCollect prospective data

Do not reflect “usual care”Results may be difficult togeneralizeNot usually comparativeNot usually powered to detectQoL or Economic differencesTime-consuming & expensive

Databasestudies

Have large sample size potentialCan provide data quicklyAre reflective of “usual care”

Differ in quality of databasesUse on inconsistent coding

Expertopinions

Are inexpensiveCan provide missing data quicklyAre reflective of usual careCan adjust to protocol-drivenresource use

Have potential for biasAre controversialPotential for large variations

Additional PE Data Sources