Some basic concepts in pharmacoeconomics

[Janis.Y.Chen]

QALY:

The quality-adjusted life year or quality-adjusted life-year (QALY) is a generic measure of disease burden, including both the quality and the quantity of life lived.[1][2] It is used in economic evaluation to assess the value for money of medical interventions. One QALY equates to one year in perfect health. If an individual's health is below this maximum, QALYs are accrued at a rate of less than 1 per year. To be dead is associated with 0 QALYs, and in some circumstances it is possible to accrue negative QALYs to reflect health states deemed 'worse than dead'.



DALY/Disability-adjusted life year:

The disability-adjusted life year (DALY) is a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death. It was developed in the 1990s as a way of comparing the overall health and life expectancy of different countries.

The DALY is becoming increasingly common in the field of public health and health impact assessment (HIA). It "extends the concept of potential years of life lost due to premature death...to include equivalent years of 'healthy' life lost by virtue of being in states of poor health or disability."[2] In so doing, mortality and morbidity are combined into a single, common metric.

Looking at the burden of disease via DALYs can reveal surprising things about a population's health. For example, the 1990 WHO report[citation needed] indicated that 5 of the 10 leading causes of disability were psychiatric conditions. Psychiatric and neurologic conditions account for 28% of all years lived with disability, but only 1.4% of all deaths and 1.1% of years of life lost. Thus, psychiatric disorders, while traditionally not regarded as a major epidemiological problem, are shown by consideration of disability years to have a huge impact on populations.

The disability-adjusted life year is a type of health-adjusted life year (HALY) that attempts to quantify the burden of disease or disability in populations. They are similar to quality-adjusted life year (QALY) measures, but rather than attach health-related quality of life (HRQL) estimates to health states that can be linked to health risks and self-reported/diagnosed sources of ill-health, DALYs assign HRQLs to specific diseases and disabilities.

Traditionally, health liabilities were expressed using one measure, the Years of Life Lost (YLL) due to dying early. A medical condition that did not result in dying younger than expected was not counted. The Years Lived with Disability (YLD) component measures the burden of living with a disability.

[CheneyHsiung]

Cost of Illness Evaluation

A cost-of-illness evaluation (COI) 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 cost 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, once 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 not used to compare competing treatment alternatives but 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. Various examples of COI studies are available in the literature, including the burden or cost of Alzheimer disease, diabetes, insomnia, and gastroesophageal reflux disease.

[CheneyHsiung]

Cost-minimization analysis (CMA) 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.

CMA is a relative straightforward and simple method for comparing competing programs or treatment alternatives as long as the therapeutic equivalence of the alternatives being compared has been established. If no evidence exists to support this, then a more comprehensive method such as cost-effectiveness analysis should be employed. Remember, CMA shows only a "cost savings" of one program or treatment over another.

Employing CMA is appropriate when comparing two or more therapeutically equivalent agents or alternate dosing regimens of the same agent. For example, if drug A and B are antiulcer agents and have been documented as equivalent in efficacy and incidence of ADRs, then the costs of using these drugs could be compared using CMA. These costs should extend beyond a comparison of drug acquisition costs and include costs of drug preparation (pharmacist and technician time), administration (nursing time), and storage. When appropriate, other costs to be valued can include the cost of physician visits, number of hospital days, and pharmacokinetic consultations. The least expensive agent, considering all these costs, should be preferred. This method has been used frequently, and its application could expand given the increasing number of "me too" products and generic competition in the pharmaceutical marketplace.