Overview of Pharmaco- Economics Methodologies Maher Hassoun, M.S.

Transcription

1 Overview of Pharmaco- Economics Methodologies Maher Hassoun, M.S. Director of Communications, ISPOR Lebanon Chapter (LSPOR) ISPOR Member Country Manager, Mundipharma Lebanon and Jordan

2 Outline Current Challenges Importance and value of Pharmaco Economics Types of Pharmaco Economic Analyses Executive summary and conclusion

3 Background to the Health situation

4 Challenges Payers are increasingly faced with the challenge of maximising health gain with limited health care budgets Payers are now having to make very tough decisions about pharmaceutical spending now and in the future - optimise the use of the healthcare budget Global economic crisis Cost containment/limited health care budgets Ageing population Rising health care expenditure Increasing need for prioritisation 4

5 Health care expenditure as a % of GDP Health care expenditure as a % of GDP has been increasing since 1970, but trends suggest it may now be flattening out OECD Health Data 5

6 Importance of Health Economic Evaluation

7 PE - Introduction Definition: PE is both the science dealing with the value of medicine and the technologies to assess the inherent value of medical interventions. Value is defined as the binary concept involving both the resources committed to a healthcare purpose and the return on that investment or the benefits derived from the commitment of such resources How much will it cost us to do this? How much will we gain if we do this? Without PE we would have no understanding of real costs of diseases. Without such thorough analyses, decision makers will only rely on the cost 7

8 Types of Analyses Cost-of-illness analysis Cost-effectiveness analysis Cost-minimization analysis Cost-benefit analysis Cost-utility analysis 8

9 Types of Analyses Cost-of-illness analysis Cost-effectiveness analysis Cost-minimization analysis Cost-benefit analysis Cost-utility analysis 9

10 Types of Analyses Cost of Illness Cost of Illness analysis (burden of disease analysis) This type of analysis reflects the benefits of an intervention to the society. Furthermore, it identifies and measures the direct and indirect costs of an illness like asthma, CVD, cancer and some other disabling diseases A burden of a disease assesses costs as sum of three components Direct cost o o Medical resources used to treat illness Non medical resources associated with medical service like transportation, lodging for a family, hiring a person to help a family with home care etc Indirect cost: lost productivity due to an illness or disability

11 Types of Analyses- CEA Cost-of-illness analysis Cost-effectiveness analysis Cost-minimization analysis Cost-benefit analysis Cost-utility analysis 11

12 Types of Analyses - CEA Cost Effectiveness analysis (CEA) Cost effectiveness is appropriate when a single dimension of effectiveness characterizes the relevant outcome for all therapies, and competing therapies do not produce an equivalent likelihood of outcomes. This technique is therefore relevant when there is difference in both: The outcome success rate with competing medical interventions The healthcare resources utilized in delivering the treatments

13 Types of Analyses - CEA 13

14 Types of Analyses - CEA Example: Cheapest does not mean necessarily mean best value The price of a course of medicine A is 50 USD and 8 out of 10 patients are treated successfully with this drug, the effectiveness outcome in this example will the rate of successfully treated patients of 8 out of 10 i.e, 80% CE ratio= 50 USD/0.8 = 62.5 USD This may be interpreted as having to spend on average 62.5 USD to treat one patient successfully Medicine B, on the other hand, is sold at 35 USD, but has a success rate of 4 out of 10 patients treated. This implies that the reported effectiveness of drug B is 0.4 (40%), this is translated to a cost per successfully treated patient of: CE ratio= 35 USD/0.4 = 87.5 USD This implies that it will cost on average 87.5 USD to treat a patient successfully Medicine A may have a higher price, but it represents better value in the health delivery system: if only 500 USD is available in our health budget, on average 8 patients can be treated successfully by using medicine A, compared to only 6 if the whole budget had been spent to medicine B

15 How much will it cost us to do this? The example below is based on an actual analysis done in an oncology context. The standard of care was intravenous therapy while the new technology introduced to the market was an oral product. Treatment Standard New technology Drug acquisition cost 3,500 USD 29,000 USD IV administration cost 20,000 USD 0 USD (PO) Hospitalization 1,500 USD 1,000 USD Total treatment cost 25,000 USD 30,000 USD 15

16 How much will it cost us to do this? We would still be making an assumption of equivalent efficacies And even if we added hospitalization to the equation, our decision would still remain consistent. But as you will have realized by now, we are focusing all our efforts on the first economic imperative only: how much will we be paying? That is, we are inherently making an assumption of equivalence as far as benefits are concerned. Perhaps it is time to address the second part of the story Treatment Standard New technology Drug acquisition cost 3,500 USD 29,000 USD IV administration cost 20,000 USD 0 USD (PO) Hospitalization 1,500 USD 1,000 USD 16 Total treatment cost 25,000 USD 30,000 USD

17 And What Are We Getting For That? The benefits associated with these treatment options are indicated as response rates. The following results were reported for the two comparator therapies: Standard Therapy - Response Rate: 17.9% New Technology - Response Rate: 26.6% Treatment Standard New technology Drug acquisition cost 3,500 USD 29,000 USD IV administration cost 20,000 USD 0 USD (PO) Hospitalization 1,500 USD 1,000 USD Total treatment cost 25,000 USD 30,000 USD 17

18 And The Value? The value will be indicated as the ratio of benefits to costs. We can calculate: The average cost effectiveness ratio (ACER), a parameter representing the inherent value of a single intervention in isolation For this example, the ACER associated with standard therapy is: - Cost Per Responder - Standard Therapy: R25,000/17.9% = R139,665 While the ACER for the oral therapy can be described as: R30,000/26.6% = R112,782 Treatment Standard New technology Drug acquisition cost 3,500 USD 29,000 USD IV administration cost 20,000 USD 0 USD (PO) Hospitalization 1,500 USD 1,000 USD 18 Total treatment cost 25,000 USD 30,000 USD

19 Types of Analyses Cost-of-illness analysis Cost-effectiveness analysis Cost-minimization analysis Cost-benefit analysis Cost-utility analysis 20

20 Types of Analyses - CMA Cost Minimization analysis (CMA) This analytical technique is applied in situations where outcomes associated with two (or more) alternatives are equivalent and the objective is thus to compare the total resource costs that are associated with different treatments

21 Types of Analyses - CMA Cheaper does not necessarily mean best value 22

22 Types of Analyses Cost-of-illness analysis Cost-effectiveness analysis Cost-minimization analysis Cost-benefit analysis Cost-utility analysis 23

23 Types of Analyses - CBA 24

24 Types of Analyses - CBA 25

25 Types of Analyses Cost-of-illness analysis Cost-effectiveness analysis Cost-minimization analysis Cost-benefit analysis Cost-utility analysis 26

26 Types of Analyses - CUA CUA is the only method available for measuring multiple outcomes into single parameter

27 Types of Analyses - CUA How a QALY is calculated? Patient x has a serious, life-threatening condition. - If he continues receiving standard treatment he will live for 1 year and his quality of life will be If he receives the new drug he will live for 1 year 3 months (1.25 years), with a quality of life of 0.6. The new treatment is compared with standard care in terms of the QALYs gained: Standard treatment: 1 (year's extra life) x 0.4 = 0.4 QALY New treatment: 1.25 (1 year, 3 months extra life) x 0.6 = 0.75 QALY Therefore, the new treatment leads to 0.35 additional QALYs (that is: QALY = 0.35 QALYs). The cost of the new drug is assumed to be $10,000, standard treatment costs $3000. The difference in treatment costs ($7000) is divided by the QALYs gained (0.35) to calculate the cost per QALY. So the new treatment would cost $20,000 per QALY. 28 -QALY = Utility x # years in health state -One year at full health QALY = 1.0 -Death QALY = 0.0

28 Executive Summary Decision Making Criteria Have Changed From Price alone Towards Cost Effectiveness and Added Value 33

29 Executive Summary Conclusions Health Economics is about the right allocation of healthcare expenditure to ensure optimal medical conditions for patients as much as possible 34

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