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Thread: Methods of Pharmacoeconomics

  1. #1

    Default Methods of Pharmacoeconomics

    The pharmacoeconomic methods of evaluation are list in FIGURE BELOW. These methods or tools can be separated into two distinct categories: economic and humanistic evaluation techniques. These methods have been used in a variety of fields and are being applied increasingly to healthcare.

    Clinical Pharmacy Specialist - Hematology

  2. #2

    Default Economic Evaluation Methods

    The basic task of economic evaluation is to identify, measure, value, and compare the costs and consequences of the alternatives being considered. The two distinguishing characteristics of economic evaluation are as follows: 1.Is there a comparison of two or more alternatives? and 2.Are both costs and consequences of the alternatives examined?

    We don't discuss partial economic evaluation here as it's not standard.

    Full economic evaluations include cost-minimization, cost-benefit, cost-effectiveness, and cost-utility analyses. Each method is used to compare competing programs or treatment alternatives. The methods are all similar in the way they measure costs (in dollars) and different in their measurement of outcomes.

    Methods of Pharmacoeconomics-screen-shot-2015-09-07-at-7-56-44-pm-png
    Clinical Pharmacy Specialist - Hematology

  3. #3

    Default Methods of Pharmacoeconomics - COI

    COI refers to cost-of-illness evaluation. A cost-of-illness evaluation identifies and estimates the overall cost of a particular disease for a defined population. This evaluation method is often referred to as burden of illness and involves measuring the direct and indirect costs attributable to a specific disease. The costs of various diseases, including diabetes, mental disorders, and cancer, in the United States have been estimated.

    By successfully identifying the direct and indirect costs of an illness, one can determine the relative value of a treatment or prevention strategy. For example, by determining the cost of a particular disease to society, the cost of a prevention strategy could be subtracted from this to yield the benefit of implementing this strategy nationwide. COI evaluation is used to provide an estimation of the financial burden of a disease. Thus the value of prevention and treatment strategies can be measured against this illness cost.
    Clinical Pharmacy Specialist - Hematology

  4. #4

    Default Methods of Pharmacoeconomics - CMA

    Cost-minimization analysis involves the determination of the least costly alternative when comparing two or more treatment alternatives. With CMA, the alternatives must have an assumed or demonstrated equivalency in safety and efficacy. Once this equivalency in outcome is confirmed, the costs can be identified, measured, and compared in monetary units (dollars).
    Clinical Pharmacy Specialist - Hematology

  5. #5

    Default Methods of Pharmacoeconomics - CBA

    Cost-benefit analysis is a method that allows for the identification, measurement, and comparison of the benefit and costs of a program or treatment alternative. The benefits realized from a program or treatment alternative are compared with the costs of providing it. Both the costs and the benefits are measured and converted into equivalent dollars in the year in which they will occur. Future costs and benefits are discounted or reduced to their current value.


    • If the B:C ratio is greater than 1, the program or treatment is of value. The benefits realized by the program or treatment alternative outweigh the cost of providing it.
    • If the B:C ratio equals 1, the benefits equal the cost. The benefits realized by the program or treatment alternative are equivalent to the cost of providing it.
    • If the B:C ratio is less than 1, the program or treatment is not economically beneficial. The cost of providing the program or treatment alternative outweighs the benefits realized by it.


    CBA should be employed when comparing treatment alternatives in which the costs and benefits do not occur simultaneously.
    Last edited by CheneyHsiung; Mon 7th September '15 at 9:38pm.
    Clinical Pharmacy Specialist - Hematology

  6. #6

    Default Methods of Pharmacoeconomics - CEA

    Cost-effectiveness analysis is a way of summarizing the health benefits and resource used by competing healthcare programs so that policymakers can choose among them. CEA involves comparing programs or treatment alternatives with different safety and efficacy profiles. Cost is measured in dollars, and outcomes are measured in terms of obtaining a specific therapeutic outcome. These outcomes are often expressed in physical units, natural units, or non dollar units (e.g., lives saved, cases cured, life expectancy, or drop in blood pressure).
    Clinical Pharmacy Specialist - Hematology

  7. #7

    Default Methods of Pharmacoeconomics - CUA

    Pharmaceconomists sometimes want to include a measure of patient preference or quality of life when comparing competing treatment alternatives. Cost-utility analysis is a method for comparing treatment alternatives that integrates patient preferences and HRQoL. CUA can compare cost, quality, and the quantity of patient-years. Cost is measured in dollars, and therapeutic outcome is measured in patient-weighted utilities rather than in physical units. Often the utility measurement used is a quality-adjusted life year (QALY) gained.

    QALY is a common measure of health status used in CUA, combining morbidity and mortality data. For example, a full year of health in a disease-free patient would equal 1.0 QALY, whereas a year spent with a specific disease might be valued significantly lower, perhaps as 0.5 QALY, depending on the disease.

    CUA is the most appropriate method to use when comparing programs and treatment alternatives that are life extending with serious side effects (e.g., cancer chemotherapy), those which produce reductions in morbidity rather than mortality (e.g., medical treatment of arthritis), and when HRQoL is the most important health outcome being examined.
    Last edited by CheneyHsiung; Mon 7th September '15 at 10:07pm.
    Clinical Pharmacy Specialist - Hematology

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