Use Of Pharmacoeconomics Research Articles

How Do US Health Care Payers React to and Use Pharmacoeconomic Information?

In 1997, Grabowski and Mullins described why pharmacy benefit management use of pharmacoeconomics was limited. The current manuscript examines recent changes in health care payers’ use of pharmacoeconomic information, payers’ perceptions of that information’s value for informing formulary decision making, and payers’ attitudes toward the generation and dissemination of pharmacoeconomic evidence. Despite a perceived improvement in the scientific rigor and “real-world applicability” of pharmacoeconomic information, payers remain skeptical of pharmacoeconomic evidence generated or funded by pharmaceutical manufacturers. This skepticism is reinforced when transparency is limited and when the picture provided of the comparative effectiveness of alternative products is incomplete. Payers suggest that greater two-way communications between payers and drug manufacturers could improve the usefulness of pharmacoeconomic information.

Decision-making associated with drug candidates in the biotechnology research and development (R&D) pipeline

This research investigated the issues and methods of analysis considered by executives when managing biotechnology drug candidates within the research and development (RD (2) sources of funding for RD (3) analytic tools used in decision-making; and (4) the use and application of pharmacoeconomics, and targeted primarily Chief Financial Officers (CFO) within 396 biotechnology firms in the United States (US). Consistent with prior research on CFOs, a response rate of 7.5 per cent was achieved and respondents generally represented smaller biotechnology companies valued below US$100m. Findings indicated that regulatory and capital requirements as well as investor expectations were important factors throughout clinical phase trials. Venture capital and capital/securities markets were the most commonly used sources of R&D capital. The most frequently cited decision-making techniques used included prior experience/intuition/human judgment, net present value (NPV), and internal rate of return (IRR). Pharmacoeconomic methods were utilised at every stage of R&D and applied to the management of R&D pipelines in addition to aspects of product pricing and reimbursement. Overall, these results reflect the nature of risk and uncertainty associated with pharmaceutical and biotechnology R&D. Although the use of past experience/intuition/human judgment was most common for decision-making, methods based upon discounted cash flow (DCF) approaches were also employed frequently, as was the use of pharmacoeconomics. The implications of this work should seek to catalyse the development and utilisation of robust methods to manage drug pipelines such that senior executives are afforded optimal recommendations when attempting to hedge risk and maximise return.

Pharmacoeconomics: a Reliable Tool for Decisions on New Medicines?

ABSTRACTAimTo provide a literature‐based review of the reliability of pharmacoeconomics as a tool for decisions on new medicines.MethodMedline and Embase databases were searched. Articles published in English in peer‐reviewed journals were selected according to relevance, and bibliographies searched for other relevant articles. All articles were assessed for information and opinions on the use of pharmacoeconomics, methodology and quality of studies, and reliability in decision‐making.ResultsOver 1000 articles were retrieved and 120 selected for review. The review indicated that, although pharmacoeconomics is increasingly used in decision‐making, its methodology is still developing. Methodological guidelines, well‐established in some countries, can improve the quality of studies, but there is scope for improvement in adherence to guidelines. To improve confidence in pharmacoeconomics, studies need to be peer‐reviewed by experts before publication. Bias, unintentional or otherwise, can be found in all types of economic analysis and needs to be considered. To avoid bias, methodological guidelines should be closely adhered to, and all financial interests and sources of funding disclosed. There is a need to educate users to understand economic analysis, recognise any inherent bias, and assess the quality of the studies they intend to use.ConclusionProviding methodological guidelines are followed, methodology is transparent, and bias is minimised, pharmacoeconomics can be a reliable tool to assist in decisions on the introduction of new medicines.

Role of Pharmacoeconomic Analysis in R&D Decision Making

Pharmacoeconomics is vitally important to drug manufacturers in terms of communicating to external decision-makers (payers, prescribers, patients) the value of their products, achieving regulatory and reimbursement approval and contributing to commercial success. Since development of new drugs is long, costly and risky, and decisions must be made how to allocate considerable research and development (R&D) resources, pharmacoeconomics also has an essential role informing internal decision-making (within a company) during drug development. The use of pharmacoeconomics in early development phases is likely to enhance the efficiency of R&D resource use and also provide a solid foundation for communicating product value to external decision-makers further downstream, increasing the likelihood of regulatory (reimbursement) approval and commercial success. This paper puts the case for use of pharmacoeconomic analyses earlier in the development process and outlines five techniques (clinical trial simulation [CTS], option pricing [OP], investment appraisal [IA], threshold analysis [TA] and value of information [VOI] analysis) that can provide useful input into the design of clinical development programmes, portfolio management and optimal pricing strategy. CTS can estimate efficacy and tolerability profiles before clinical data are available. OP can show the value of different clinical programme designs, sequencing of studies and stop decisions. IA can compare expected net present value (NPV) of different product profiles or study designs. TA can be used to understand development drug profile requirements given partial data. VOI can assist risk management by quantifying uncertainty and assessing the economic viability of gathering further information on the development drug. No amount of pharmacoeconomic data can make a bad drug good; what it can do is enhance the drug developers understanding of the characteristics of that drug. Decision-making, in light of this information, is likely to be better than that without it, whether it leads to faster termination of uneconomic projects or the allocation of more appropriate resources to attractive projects.

Use of pharmacoeconomics in prescribing research. Part 5: modelling--beyond clinical trials.

This paper provides an overview of modelling in the economic evaluation of pharmaceuticals, reflecting the increasing use of models in analyses prepared for reimbursement applications to national and local drug formularies. The paper seeks to demystify the most commonly encountered modelling techniques (extrapolation, decision analysis, Markov modelling and Monte Carlo simulation), and to provide guidance in assessing the quality of submitted or published modelled economic evaluations.

Potential Expanded Use of Pharmacoeconomics and Outcomes Research in China

In an era of cost containment and managed care, pharmacoeconomics and outcomes research are increasingly used in both public and private sectors to improve the allocation of healthcare and pharmaceutical resources. While this trend has been well observed in developed nations, little is known about its status in developing countries. This article presents an overview of pharmacoeconomics and outcomes research in China.

Use of pharmacoeconomics in prescribing research. Part 4: is cost-utility analysis a useful tool?

This paper is the fourth in the 'Research Note' series describing various aspects of pharmacoeconomics in prescribing research. This article describes cost-utility analysis, and how it can be incorporated into pharmacoeconomics. While this approach has intuitive appeal, the uncertainties about the methods for estimating utilities mean that the value of cost-utility analysis in prescribing research is still to be established. Importantly, cost-utility analysis may not capture aspects of quality of life that enable meaningful comparisons between prescribing choices at an individual or societal level.

Use of pharmacoeconomics in prescribing research. Part 3: cost-effectiveness analysis - a technique for decision-making at the margin

This is the third Research Note addressing pharmacoeconomics in prescribing research, reflecting the increasing use of economic evaluation in drug purchasing decisions in a variety of settings. In this segment we provide an overview of the theoretical basis, practical application and methodological limitations of cost-effectiveness analysis (CEA).

Use of pharmacoeconomics in prescribing research. Part 2: cost-minimization analysis--when are two therapies equal?

This is the second paper in a series looking at pharmacoeconomic methods. The first paper discussed how costs are identified for pharmacoeconomic studies. This article will examine one of the four main evaluation methods in health economics, cost-minimization analysis (CMA). The remaining three methods (cost-effectiveness, cost-utility and cost-benefit analysis) will be discussed in later papers. Cost-minimization is the appropriate form of economic analysis to carry out whenever two drugs have the same clinical effect. True equivalence studies are uncommon; a more useful approach is to assess the size of the confidence interval around the difference between treatments and determine whether it excludes clinically relevant effects. The critical issue for cost-minimization analyses is determining equi-effective doses.

Use of pharmacoeconomics in prescribing research. Part 1: costs--moving beyond the acquisition price for drugs.

This paper addresses pharmacoeconomics in prescribing research and reflects the increasing use of techniques of economic evaluation to aid drug purchasing decisions in a variety of settings -- for national drug subsidization programmes, provincial purchasing plans, insurance programmes, and for hospital and area health authority formulary decisions. First, we focus on the cost component of an economic evaluation and discuss methodological issues that are relevant to all pharmacoeconomic analyses.

Effective Utilization of Pharmacoeconomics for Decision Makers

Increased worldwide cost consciousness with regard to healthcare spending has resulted in a greater reliance of health systems on pharmacoeconomics as a tool for obtaining optimal value, attaining better outcomes, and controlling spending. In such capacities, pharmacoeconomics is often used as a basis for pricing, purchasing, and reimbursement decisions. Current barriers to the use of pharmacoeconomic data are related to the international coexistence of various evolutionary states of the theory and implementation of pharmacoeconomics, the fragmentation of healthcare budgets, and the diversity of healthcare systems and clinical settings. One result of these barriers is the decision makers’ need for more rigorous, more directly relevant pharmacoeconomic data that are presented in an interactive, customizable manner. Other stakeholders in the healthcare market have been noticeably affected by decision makers’ use of pharmacoeconomics and the more stringent data demands. Physicians have experienced decreased autonomy, patients have experienced delayed drug access and possibly compromised care, and manufacturers have endured greater financial burden and risk. This paper identifies ways in which manufacturers can maximize the effectiveness of their pharmacoeconomic activities to efficiently meet decision-maker needs, overcome some of the current barriers to the use of pharmacoeconomics, and minimize deleterious effects on major healthcare stakeholders.

PHP15: A SURVEY OF PUBLIC HOSPITAL PHARMACISTS IN SINGAPORE ON THEIR VIEWS ABOUT ‘THE FORMULARY’ AND ITS DECISION-MAKING PROCESS

OUR PREMISE: If the expectation is “A formulary must help control drug costs but not just promote cheap drugs (i.e., compromise on quality of care)”, there clearly exists a need for pharmacoeconomics in formulary decision-making. OBJECTIVES: To understand if such expectation and need exist in Singapore, and how confident pharmacists would be if asked to use pharmacoeconomics to aid their decision-making. METHOD: After having obtained consent from the respective pharmacy managers, survey forms were circulated to all pharmacists in the 5 major public hospitals of Singapore. If after 2–3 weeks, the response rate was lower than 50% a reminder (via e-mail) and a second circulation of the questionnaire was made. In the event of any clarification(s) being required, the respondent was contacted over phone. RESULTS AND CONCLUSION: With a response rate that ranged from 50% to 85% in the individual hospitals and an overall average of ∼64% (70 of 110 identified pharmacists responded) our findings delineated the following picture in Singapore. Formulary restriction is the best method to control drug costs (57%). However, it should not be a list of cheapest alternatives (90 %) but should ideally promote the use of the best drug (71%) while also controlling the hospital budget (57%). Though what factors are involved in the current formulary decision-making process are not known (49% have no knowledge), drug effectiveness (64%) as opposed to acquisition cost (5%) will be considered as the most important factor by the pharmacists if they were to decide on the formulary. However, only 1% felt very confident about being able to use pharmacoeconomics to aid their decision-making, if asked to do so. There is therefore, a definite but unstated need for use of pharmacoeconomics in the formulary setting; however, there is clearly a lack of capability to fulfill the need.

Current Trends in the Use of Pharmacoeconomics and Outcomes Research in Europe

1 Centre for Health Economics, University of York, United Kingdom; 2 Janssen Research Foundation, Beerse, Belgium; 3 CESAV, Mario Negri Institute, Ranica, Italy; 4 FMiG, Health Management Research Institute, St Gallen, Switzerland; 5 Stockholm School of Economics, Stockholm, Sweden; 6 Institute of Public Health, University of Southern Denmark, Odense, Denmark; 7 Universite Paris Dauphine, Paris, France; 8 Instituto Superior de Economia e Gestao, Technical University of Lisbon, Portugal; 9 Institute of Public Health, University of Southern Denmark, Odense, Denmark; 10 SOIKOS and University of Barcelona, Spain; 11 Institute for Medical Technology Assessment, Erasmus University, Rotterdam, The Netherlands; 12 HSR–Centre for Health Services Research, Universitat Hannover, Germany; 13 Department of Health Policy and Management, University of Kuopio, Finland

Pharmacoeconomics in Europe

There is a trend towards greater use of pharmacoeconomics and outcomes research in Europe indicating that health economic researchers in the European Union (EU) are not wasting their time, assured Professor Michael Drummond at the inaugural European conference of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) [Cologne, Germany; December 1998]. However, other than in centralised drug pricing and reim bursement discussions, he believes that the use of pharmacoeconomic evaluation in Europe is still limited. Furthermore, the great diversity in the healthcare systems of Europe makes it difficult to foresee harmonisation of drug pricing and reimbursement decisions at least in the short term.

COST AND COST-EFFECTIVENESS IN ASTHMA: Use of Pharmacoeconomics to Assess the Value of Asthma Interventions

This article informs the reader about the nature and extent of the economic burden of asthma and describes the literature on the cost-effectiveness of many of the major treatment choices for asthma. The author concludes that despite the many shortcomings, economic evaluations of asthma treatments need to be encouraged and nurtured. Substantial improvements and standardization are needed in the study design, study duration, sample size determination based on economic and health status end points, selection of appropriate comparison therapies, and selection and evaluation of costs and outcomes.

COST AND COST-EFFECTIVENESS IN ASTHMA: Use of Pharmacoeconomics to Assess the Value of Asthma Interventions

Health care decision-makers are interested in using rational approaches to allocating resources among patients with chronic disease. Some policy-makers may view cost-effectiveness analyses as a means to justify rationing, but others embrace economic evaluation methods for improving decision-making about, for example, limits on insurance coverage for specific interventions, formulary development, quality improvement programs, and appropriate utilization of services. Before sound decisions can be made on appropriate selection and use of interventions, however, more comparative data on the economic value of the treatments and management strategies are needed. Too few studies as yet adequately characterize the economic impact of the large number of interventions currently being used to manage asthma. There is no standard approach to evaluating the economic costs and benefits of medical treatments used to treat asthma or for comparing the clinical and economic benefits of alternative treatments. Researchers conduct studies with varying lengths of follow-up, use different outcome measures, include different costs in the calculation of total cost, and evaluate different mixes of patients. These inconsistencies hinder efforts by decision-makers to compare clinical and economic benefits. Despite the many shortcomings, economic evaluations of asthma treatments need to be encouraged and nurtured. Substantial improvements and standardization are needed in the study design, study duration, sample size determination based on economic and health status endpoints, selection of appropriate comparison therapies, and selection and evaluation of costs and outcomes.

Decision-making associated with drug candidates in the biotechnology research and development (R&D) pipeline

This research investigated the issues and methods of analysis considered by executives when managing biotechnology drug candidates within the research and development (R&D) pipeline. A mail survey was developed to assess: (1) factors considered during clinical trials; (2) sources of funding for R&D; (3) analytic tools used in decision-making; and (4) the use and application of pharmacoeconomics, and targeted primarily Chief Financial Officers (CFO) within 396 biotechnology firms in the United States (US). Consistent with prior research on CFOs, a response rate of 7.5 per cent was achieved and respondents generally represented smaller biotechnology companies valued below US$100m. Findings indicated that regulatory and capital requirements as well as investor expectations were important factors throughout clinical phase trials. Venture capital and capital/securities markets were the most commonly used sources of R&D capital. The most frequently cited decision-making techniques used included prior experience/intuition/human judgment, net present value (NPV), and internal rate of return (IRR). Pharmacoeconomic methods were utilised at every stage of R&D and applied to the management of R&D pipelines in addition to aspects of product pricing and reimbursement. Overall, these results reflect the nature of risk and uncertainty associated with pharmaceutical and biotechnology R&D. Although the use of past experience/intuition/human judgment was most common for decision-making, methods based upon discounted cash flow (DCF) approaches were also employed frequently, as was the use of pharmacoeconomics. The implications of this work should seek to catalyse the development and utilisation of robust methods to manage drug pipelines such that senior executives are afforded optimal recommendations when attempting to hedge risk and maximise return.