PHARMACOECONOMICS:
DEFINITIONS AND HISTORY
Dr. Javed Ahamad
Pharmacoeconomics and PHAR-204
Semester-II
Week 4
Date 18-22/02/2024
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OUTLINE
• Introduction
• Goals, objectives & composition of Pharmacoeconomics
• Why we need Pharmacoeconomics
• History of Pharmacoeconomics
OBJECTIVES
• To introduce the Pharmacoeconomics in pharmacy.
• To discuss goals, objectives, and composition of
Pharmacoeconomics.
• To discuss the history of Pharmacoeconomics.
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INTRODUCTION
• Pharmacoeconomics research identifies, measures &
compares the costs (i.e. resources consumed) &
consequences (i.e. clinical, economic, humanistic) of
pharmaceutical products & services.
• The term Pharmacoeconomics was coined by Ray
Townsend in 1986.
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• PHARMACOECONOMICS is a branch of health
economics:
Making choices between options, when there is scarcity of
resources, and
Fundamentally comparative, weighing the costs and
benefits of 2 or more options.
• The description & analysis of the costs of drug therapy to
health care system & society.
6 • Pharmacoeconomics analysis helps in:
Efficient allocation of limited resources among
competing alternative medications and services
Biggest bang for your buck (More value for your
money), using a quantitative measure.
• To make the best use of limited resources (such as
drugs and health care services).
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Pharmacoeconomics
• Goal: To identify, measure, and compare, the costs and
consequences (outcomes) of pharmaceutical interventions.
• Objective: To allocate health care resources, and assuring
that each patient receives the most suitable treatment.
• Composition: It includes ideas and methods from a variety
of domains including pharmacy professionals, physicians,
statisticians, clinical epidemiologists, decision analysts, and
psychometrics (it is multidisciplinary).
8 Pharmacoeconomics
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PHARMACOECONOMICS
Pharmacoeconomics is a set of methods to evaluate the:
1. Economic (Cost efficient),
2. Clinical (Effectiveness),
3. Humanistic (Impact on Healthcare system, Individual and the
society) Outcomes (ECHO) of pharmaceutical products and
services (or any health care service)
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WHY WE NEED PHARMACOECONOMICS
• In the US, the average per capita spending on medication (Rx drugs)
is about $ 858 vs $ 400 for other industrialized countries.
• Median cost of branded anticancer drugs is estimated to be around $
9,000/ month.
• Repatha (Evolocumab) for high cholesterol: $ 15,000/ year.
• Tecfidera (Dimethyl fumarate) for multiple sclerosis (MS): $ 54,000/
year.
• Daklinza (Daclatasvir) for hepatitis C: $ 63,000 for 12 week
regimen.
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WHY WE NEED PHARMACOECONOMICS
• Orkambi (Ivacaftor/ lumacftor) for cystic fibrosis: $ 259,000/
year
• Spinraza (Nusinersen) for spinal muscular atrophy: $ 750,000
for 1st year and then $ 375,000/ year for life.
• Luxturna (Voretigene neparvovec) for blindness due to specific
inherited retinal disease: $ 850,000 one-time treatment (gene
therapy).
• Even cost of common generic drugs increased by 20 to 85 % in
recent years.
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HISTORY OF PHARMACOECONOMICS
In the early 1960s pharmacy as a clinical discipline gained the
recognition within the healthcare system.
At this point, some subjects became part of pharmacy education such
as clinical pharmacy, drug information, and pharmacokinetics.
Pharmacoeconomics rooted in 1970s.
The first book on health economics published in 1973, and updated in
1978, in the University of Minnesota, the concept of cost-benefit and
cost-effectiveness analysis was introduced through the works of
McGhan, Rowland, and Bootman.
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HISTORY OF PHARMACOECONOMICS
• Make use of the complicated pharmacokinetic procedure, Bootman et
al., published an early pharmacy research editorial in 1979 displaying
cost-benefit analysis of aminoglycoside dosages.
• In 1983, the University of Ohio, College of Pharmacy, initiated a
particular pharmacy educational curriculum.
• The intent of the University was to provide the idea of the utilization of
cost-effective and cost-benefit analysis in the healthcare system, with
emphasis on their application to the delivery of pharmaceutical care.
REFERENCES
Karen L. Rascati. Essentials of Pharmacoeconomics. 2nd edition. Pub.:
Lippincott Williams & Wilkins, 2014.
