What can you as a pharmacist do to help your patients?

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Discussion QuestionsWhat to Do About High Drug
Costs

• What can you as a pharmacist do to help your
  patients?
• What can our institution do to better control
  costs?
• What policies could help moderate drug costs?
• What role can the formulary play in these efforts?

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Many People Involved in Pharmaceutical
Supply-Chain
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WHAT is Economic Evaluation?

• Definition Economic Evaluation is ...
• the identification, measure, and comparison of
  the costs (i.e. resources consumed) and outcomes
  (clinical, economic, and humanistic) of
  interventions (pharmaceuticals, non-drug
  therapies, public health programs)

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WHAT is Economic Evaluation?

• Economic Evaluation is NOT JUST economics
• Economic Evaluation is multi-disciplinary, it
  combines
• Economics
• Epidemiology
• Biostatistics
• Medicine
• Pharmacy
• .

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Why study Economic Evaluation?

• The pressure of cost containment.
• The need for methods to evaluate medical
  interventions.
• Purpose of economic evaluation
• ? efficient resource allocation
• NOTE equity is often not addressed

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Who uses Economic Evaluation?

• Managers in hospital or health care plans
  (formulary decision)
• Pharmaceutical companies
• Government / Policy makers
• Researchers

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Who uses Economic Evaluation? (cont.)

• Hospital managers (including HMOs and FFS)
• What drugs should be included on the hospital
  formulary?
• Which drug delivery system is the best for the
  hospital?
• Pharmaceutical companies
• What is the best drug for a pharmaceutical
  company to develop?
• Shall the company continue a clinical trial?
• What is the economic benefit of a new product?

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Who uses Economic Evaluation? (cont.)

• Government
• Which drugs should be included in a Medicaid
  formulary?
• Is it cost-effective for Medicare to cover annual
  mammography?
• Researchers
• All of the above
• How to improve the analytical credibility of
  economic evaluation ?

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Costs can be described in many ways

• Cost / unit (cost/tab, cost/vial)
• Cost / treatment
• Cost / person
• Cost / person / year
• Cost / case prevented
• Cost / life saved
• Cost / DALY (disability-adjusted life year)

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Outcomes

• Both positive and negative outcomes should be
  addressed
• Positive outcomes drugs efficacy measure
• Negative outcomes ADR and treatment failure

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Pharmacoeconomics

• is a set of methods to evaluate the(ECHO)
• 1.Economic,
• 2.Clinical, and
• 3.Humanistic
• 4.Outcomes of pharmaceutical products and
  services(or any health care service)

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Outcomes Relationship
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Pharmacoeconomics allows us

• to compare the economic resources
  consumed(inputs) to produce the health and
  economic consequences of products or
  services(outcomes).

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Application of Pharmacoeconomics

• Pricing of a new drug
• Re-pricing of an old drug
• Generation of a data for promotional material
• Legislative requirement for drug licensing and
  medical reimbursement
• Justify clinical pharmacy evaluation
• Used to justify use of pharmacy products and
  pharmaceutical care
• Principle of Pharmacoeconomic also influences
  health care decision making and individual
  patient care
• Earlier clinical decisions were solely based on
  outcomes. Now cost, outcome, humanistic
• outcome are also considered

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Cost of drug

• This is the total resources consumed in producing
  the drug or drug formulation. It is the amount
  paid to the suppliers.?
• To evaluate the economics of drug therapy,cost is
  categorized into
• i. Direct cost.
• ii. Indirect cost.
• iii. Intangible cost

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Direct cost

• i.) Direct medical cost
• This is what is paid for specialized health
  resources and services. It includes the
• Physicians salaries
• Acquisition cost of medicine
• Consumables associated with drug
  administration
• Staff time in preparation and
  administration of medicines
• Laboratory costs of monitoring for
  effectiveness and adverse
• drug reactions.
• ii.) Direct non medical cost
• This includes cost necessary to enable an
  individual receive medical care such as
  lodging,special diet and transportation lost
  work time(important to employers) such as acute
  Otitis media in pediatric patients with
  professional parents who lost work time during
  the treatment of their kid.

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Indirect cost

• This is the cost incurred by the patient,
  family,friends or society. Many of these are
  difficult to measure,but should be of concern to
  society as a whole.
• This includes productivity loss in the society
  unpaid care givers lost wages expenses of
  illness borne by patients, relatives, friends,
  employers and the government and loss of leisure
  time.

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Intangible costs

• These are costs related with the patients pain
  and suffering worry and other distress of the
  family members of a patient effect on quality of
  life and health perceptions.
• For example patients of rheumatoid arthritis,
  cancer or having terminal illnesses in which
  quality of life is suffered due to adverse
  reactions of the drug treatment.
• These are difficult to measure in monetary terms
  but represent a considerable concern for both
  doctors and patients.
• Quality adjusted life year (QALY)is one method by
  which intangible costs can be effectively
  integrated in PE analysis

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Costs

• Direct costs costs to deliver services
  topatient both medical and non-medical
• Indirect costs cost of treatment to patient or
  society
• Intangible costs quality of life

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Types of Economic Evaluation
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Cost of Illness Evaluation

• Also termed, cost consequence model
• Description Estimates the cost of a disease on a
  defined population
• Application Provides a baseline against which
  various prevention/treatment options may be
  compared
• Example Cost of peptic ulcer disease

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Cost Minimization Analysis

• Description Identifies the least
  expensive/costly alternative assuming the
  alternatives are equal in either consequence or
  outcome
• Application Can only be utilized when
  consequences or outcomes are identical
• Costs include more than the price of meds
• Costs of treatment failure
• Costs of adverse effects
• Drug monitoring or other healthcare services

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Cost Benefit Analysis

• Description Measures benefit in monetary units
  and computes net gain following considering the
  costs of the intervention
• Calculated Benefit ()/Cost ()
• Application Compare programs or agents with
  different objectives
• Example Clinical pharmacy service vs. other
  institutional service
• Determines whether benefits gt cost

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Examples CBA

• AIDS prevention and awareness programs
• Smoking cessation intervention
• Diabetes drug adherence
• Breast cancer screening

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Cost Effectiveness Analysis

• Description Compares alternatives based on a
  single therapeutic effect measured in physical
  units
• Calculated Cost ()/Clinical Outcome (not in )
• Clinical Outcomes Could consist of a higher
  positive effect, or less negative effect
• Application Compare drugs/programs that differ
  in clinical outcomes but use same unit of benefit
• Example Antihypertensive Drug A vs Drug B on
  mmHg blood pressure (/mmHg)
• Application Focus on Incremental Cost
  Effectiveness Ratio (ICER).

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Incremental Cost Effectiveness Ratio (ICER)
is an equation used commonly in health economics
to provide a practical approach to decision
making regarding health interventions. It is
typically used in cost-effectiveness analysis.
ICER is the ratio of the change in costs to
incremental benefits of a therapeutic
intervention or treatment
ICER (C1 C2) / (E1 E2)
where C1 and E1 are the cost and effect in the
intervention or treatment group and where C2 and
E2 are the cost and effect in the control care
group.
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Difference in cost
Consider the four possible results arising in a
CEA. First, if costs are lower and health
benefits higher for one drug relative to another,
the former is said to dominate and would be the
preferred treatment (quadrant II). Second, the
opposite applies, i.e. the new drug is more
expensive and less effective, and thus is
considered inferior and not recommended (quadrant
IV).
The third and most common case is where the new
drug is both more effective and more expensive
than the standard (quadrant I) on the basis of
ICERs, a judgment must be made regarding whether
the additional benefits are worth the extra costs
of the new drug and, therefore, whether it is
cost effective This might be defined by a
previously agreed ICER threshold value. The
fourth case is similar to the third, with the
roles of the new therapy and the standard
reversed (quadrant III) the question now is
whether the extra benefits provided by the
standard justify the additional costs of
retaining it as the preferred treatment when the
option of a new, cheaper but less effective drug
exists
Asia Journal of Pharmaceutical and Clinical
Research Vol2, issue 3, July-Sept 2009
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The cost-effectiveness plane
Med Decis Making 1990 10212214.
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Cost Utility Analysis

• Description Compares alternatives based on
  therapeutic effects measured in utility units
  (not physical units). Utility scores integrate
  patient preferences and quality of
  life/functional status
• Calculated Cost ()/QALY (quality adjusted life
  years)
• Application Compares drugs/programs that are
  life extending with serious ADRs or those
  producing reductions in morbidity
• Example Cancer chemotherapy regimens
• 4 years at 25 QOL 1 year at 100 QOL

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Considerations for Designing or Evaluating
Pharmacoeconomic Studies

• Costs
• E.g., Direct medical/nonmedical, indirect,
  opportunity, intangible
• Perspective
• E.g., Patient, Provider, Payer, Society
• Discounting-Value of money changes depending on
  when it is exchanged (i.e. Inflation)
• Sensitivity Analysis-Challenges results by
  altering certain variables independently
• Accuracy and transparency
• E.g., Alternatives, study population, study
  design

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Cost-Effective ? Cost-Saving!!!
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Cost-Saving vs. Cost-Effective

• Cost-saving
• An intervention that has a lower total cost than
  an alternative intervention
• Cost-effective
• An intervention that is sufficiently effective
  relative to its total cost when compared with an
  alternative intervention

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How Can PE and Outcomes Enhance My Practice?

• PE is an aid to decision making with strong
  potential to
• Mitigate the influence of marketing
• Puts practitioner in the drivers seat
• Help set practice priorities
• Enhances position of practitioner from payers
  perspective
• Medicare plans to decrease pay-out to stem tide
  of budget deficit
• Private payers actively are developing quality
  report cards

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Types of Economic Evaluation
Methodology Cost measurement unit Outcome unit
Cost minimization Dollars Various- but equivalent in comparative groups
Cost benefit Dollars Dollars
Cost effectiveness Dollars Natural units (life years, mg/dl blood sugar, LDL cholesterol)
Cost utility Dollars Quality adjusted life years
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Common Misconceptions When Applying
Pharmacoeconomic Principles

• Cost-effective care is initially the cheapest
  alternative in a manner similar to other
  investments, least cost option may lead to
  greater costs downstream
• Cost-effective care is outcome that generates
  biggest effect in a manner to similar
  investments, smaller increments of outcome may be
  achieved at a lower overall cost

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Perspective

• The point of view considered in economic
  analyses influences the outcomes and costs
  considered to be most relevant
• Provider
• Patient
• Payer
• Society

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Treatment of Pain Resulting from Osteoarthritis

• Pain results in significant disability and
  resource utilization
• affects 15 of US population
• results in gt 100,000 hospitalizations annually
• G NSAIDs
• effective pain relief
• 24 30 the cost of Cox-II inhibitors
• associated with a significant risk of adverse
  effects
• Dyspeptic symptoms
• More serious non-dyspeptic effects- symptomatic
  ulcers, ulcer hemorrhage, ulcer perforation
• Cox- II inhibitors
• effective pain relief
• substantially more expensive than NSAIDs
• associated with lower risk of GI side effects

Spiegel MR et al. Annals Internal Medicine 2003
13810(795-806)
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How should I treat my patient?

• NSAIDs are inexpensive compared to Cox-II
  inhibitor
• But wont the more expensive agent pay for itself
  many times over by preventing an expensive GI
  bleed in my patient?
• Dyspeptic symptoms are decreased by 15
• Clinically significant ulcer complications are
  reduced by 50

Spiegel MR et al. Annals Internal Medicine 2003
13810(795-806)
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Risk of GI bleed How Much Can It Be Altered?

• Not all osteoarthritis patients have an equal
  risk of developing a GI bleed
• Is paying extra for GI protection justified in
  all patients?
• How much can the risk of GI bleed be altered by
  using a Cox-II inhibitor instead of an NSAID?
• What value is really purchased for the extra
  cost?
• The relative risk reduction of GI complications
  with Cox-II inhibitor catches our eye- but actual
  risk reduction is small
• 1-2 for overall ulcer complications
• 1 for serious hemorrhage and perforation

Spiegel MR et al. Annals Internal Medicine 2003
13810(795-806)
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Cost-effectiveness analysis
Population Drug Total Annual Cost Qualys Gained Incremental cost per Qualy gained
No Hx of GI ulcer Naproxen 4,859 15.2613 -
No Hx of GI ulcer Cox-II inhibitor 16,443 15.3033 275,809
Hx of GI ulcer Naproxen 14,294 14.7235 -
Hx of GI ulcer Cox-II inhibitor 19,015 14.8081 55,803
Spiegel MR et al. Annals Internal Medicine 2003
13810(795-806)
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Cardiovascular Effect of Cox-II Inhibitors
Population Drug Annual Cost Qualys Gained Incremental cost per Qualy gained
All patients Naproxen 5,037 15.2539 -
All patients Cox-II 16,620 15.2832 395,324
Spiegel MR et al. Annals Internal Medicine 2003
13810(795-806)
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Clinical Decision Making

• Risk reduction for GI complications seen with
  Cox-II inhibitors is unlikely to offset their
  increased cost in the management of average risk
  patients with osteoarthritis pain
• With no history of GI bleed, choose naproxen
• With history of GI bleed, choose Cox-II inhibitor

Spiegel MR et al. Annals Internal Medicine 2003
13810(795-806)
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Clinical Decision Making

• In all patients with osteoarthritis, the decision
  to use Cox-II inhibitor should be made with
  awareness of the effect of the added risk for
  cardiovascular events on cost-effectiveness
• Currently, there is not enough information
  available, but it may be prudent to avoid these
  drugs in patients with cardiovascular history,
  even in patients with history of GI bleed

Spiegel MR et al. Annals Internal Medicine 2003
13810(795-806)
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Cost-effective Outcomes

• Decrease drugdrug and druglab interactions
• Increase the percentage of patients in
  therapeutic control.
• Reduce the overall costs of the treatment by
  utilizing more efficient modes of therapy
• Reduce the unnecessary use of emergency rooms and
  medical facilities
• Contribute to better use of health manpower by
  utilizing automation, telemedicine,
• and technicians
• Decrease the incidence and intensity of
  iatrogenic disease, such as adverse
• drug reactions

J Clin Oncol 23(10)21239
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Primary reason for pharmacist intervention

• Decrease potential adverse event
• Increase efficacy
• Reduced morbidity or mortality
• Symptom control
• Cost savings
• Decrease actual adverse drug effects
• Assist compliance
• Formulary reasons

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Change in drug therapy or management

• Change in dosage of drug
• Drug treatment initiated
• Drug treatment discontinued
• Alteration to patient monitoring
• Change from one drug to another

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Impact of pharmacist-initiated change in drug
therapy or management quantified
British Journal of Clinical Pharmacology 57(4),
513-521
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Benefit of pharmaceutical care

• The potential savings quantified arose from
  pharmacist-initiated interventions that resulted
  from only 3.8 of pharmacists clinical practice
  time.
• Benefits of other activities performed were not
  quantify drug information, patient medication
  counselling, staff education, drug use
  evaluation, research, student education and
  training, dispensing and administrative.
• On the five areas quantified in this study
  every dollar spent on a pharmacist, approximately
  23 save.

British Journal of Clinical Pharmacology 57(4),
513-521
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2nd ATS Workshop PCEHM guidelinesits
application to critically ill patients should
caution the following

• evidence for the effectiveness of interventions
  in the ICU is often lacking
• care in the ICU often does not provide for a cure
  but stabilizes patients
• ICU patients vary substantially, and the costs
  and outcomes associated with therapy vary
  depending on the type of ICU
• ICU outcome measures are not suited for economic
  analyses and are often difficult to measure
• assigning a value to the quality of end-of-life
  care and its impact on family members of ICU
  patients is difficult
• costs are not define and measured in consistent
  ways

ATS American Thoracic Society PEGM Panel on
Cost-effectiveness in Health and Medicine
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For ICU pharmaceuticals v.s. economic

• This tactic for cost minimization runs the risk
  of determining drug therapy based only on
  acquisition costs.
• When competing drugs are considered
  therapeutically equivalent, may dilute the
  benefits of newer drugs
• We need to evaluate the impact of cost-reduction
  efforts on the quality of care

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Provide optimal pharmacotherapy at an
appropriate cost in critically ill patients

• Anti-microbial
• Sedatives and neuromuscular blockers
• The Drug-Use and Disease-State Management (DUDSM)
  Program

CritCare Med 2003 Vol. 31, No. 1 (Suppl.)
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Anti-microbial

• The percentage of the drug budget spent on
  antibiotics ranges from 10-60 or gt60
• Even with a selective list of available drugs,
  there needs to be guidance on drug selection,
  dosing, and monitoring in the form of protocols
  or algorithms to enhance the chance of success.
• The patient is evaluated for conversion of
  parenteral to oral antibiotics after 4872 hrs of
  intravenous antibiotic therapy.

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Sedatives

• A large percentage of ICU patients receive
  sedatives to treat agitation, and the costs of
  managing these patients are predicted to be high.
• The clinical and economic impact of sedatives in
  ICU patients, drug costs were significantly
  reduced in the protocol-driven group.
• Ventilator times and lengths of stay were shorter
  in the follow-up group, without a compromise in
  the quality of care.

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Neuromuscular blockers

• Minimizing the usage of neuromuscular blocker
  exposure is important because prolonged paralysis
  has been reported with these agents and the
  additional costs associated with this problem is
  in excess of 66,000 per patient.

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DUDSM Program

• The DUDSM program identifies therapeutic
  opportunities for optimizing drug use from
  analysis of high-volume drug use, cost, disease
  state, and resource utilization.
• The DUDSM ICU guidelines focus on agent
  selection, indication for use, mode of
  administration, and monitoring process.
• Guidelines for new therapeutic entities are
  created to set practice patterns as agents are
  approved for general marketing vs. after practice
  patterns are established.

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The benefits of pharmacist in ICU

• SCCM best practice model document

the presence of a critical care pharmacist can
decrease adverse drug events and reduce cost of
care
SCCM Society of Critical Care Medicine
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Flowchart of the formulary decision-making
process
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Application in the formulary process with CEA

• The CEA is constructed to identify the most
  cost-effective therapy when the goal is provide
  the highest-quality pharmaceutical care within a
  fixed budget.
• To be informative, the drug alternatives in the
  analysis should include all reasonable options
  and baseline comparator.
• It can be used to evaluate the economic impact of
  a formulary decision if head-to-head data are
  available.

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Cost and Effect measured

• Cost measure in dollars and compared with the
  effects or improvements of treatments.
• Effect final outcome and intermediate outcome.
• - final outcome lives saved, life-years
  saved,
• cases prevented, rates of specific side
  effect
• - intermediate outcome the relationship
• between the intermediate and final outcome
  
• measure can be estimated.

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AMCP guide of formulary submission checklist

• Product information
• Supporting clinical information
• Supporting economic information
• Cost impact assessment
• Outcomes impact assessment

AMCPAcademy of Managed Care Pharmacy
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Medication formulary system management

• Should be based on clinical, ethical, legal,
  social, philosophical, quality-of-life, safety,
  and pharmacoeconomic factors that result in
  optimal patient care.
• Must include the active and direct involvement of
  physicians, pharmacists, and other appropriate
  health care professionals.
• To declare that decisions on the management of
  medication formulary system should not be based
  solely on economic factors.

ASHP policy 9830
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Evidence of the economic benefit of clinical
pharmacy services

• Drug therapy evaluation (benefitcost
  ratio31.921)
• Drug information
• Adverse drug reaction monitoring(benefitcost
  ratio2988.571)
• Drug protocol management
• Medical rounds participation
• Admission drug histories

Pharmacotherapy 200323(1)113-132
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Evidence of the value of the pharmacist

• In a study evaluating the effect of pharmacists
  providing pharmaceutical care services on the
  economic outcomes of patient care, an average
  benefit of 16.70 of value to the health care
  system was realized for each 1 invested in
  clinical pharmacy services.

Pharmacotherapy 1996 16(6)1188-208
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Evidence of the value of the pharmacist-for
cost saved

• Pharmacists collaborating with physicians to care
  for high-risk patients reduced the number of
  prescriptions per patient and saved nearly 600
  per year per patient in drug costs.
• Pharmacists providing disease management services
  in their community saved an average of 2700 per
  year per patient in total medical costs.

Journal of Family Practice. 1995 Nov.
41(5)469-78
Clinical Therapeutics 1997 19(1) 113-23
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Evidence of the value of the pharmacist - for
adverse events avoided

• As hospitals increased the number of pharmacists
  providing pharmaceutical care, medication errors
  have decreased by over 65.
• Pharmacists providing pharmaceutical care
  services in an intensive care unit decreased
  adverse events by 66 and saved 270,000 by
  avoiding adverse events.

Pharmacotherapy. 200222(2)134-47
JAMA 1999 Jul 21 282(3)267-70
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Applications in Practice Roles of the Pharmacist

• Assist in the design and implementation of
  research studies
• Evaluate pharmacoeconomic literature
• Apply results to clinical decision making
• Individual patient care
• Formulary/utilization management
• Disease management
• Resource allocation

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70
GUIDELINES FOR PHARMACOECONOMICS EVALUATIONS

• The perspective of the study should ideally be
  applicable to the society.
• Demographic characteristics of the target
  population should be identified.
• Conceptual and practical reasons for choosing the
  comparator should be set out and justified.
• Treatment paths of the options being compared
  should be identified and fully described.
• The study should use recognized techniques of
  analysis and should be justified.
• Clinical outcome measures should be identified.
• All relevant costs should be identified,
  collected and reported.
• Discounting should be undertaken considering the
  time lapse.
• Sensitivity of analysis should be conducted and
  reported.
• Comparisons with results from other studies are
  handled with care

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Conclusions

• Pharmacoeconomics can guide choices among
  alternative medications, treatment regimens and
  services based on a combination of costs and
  outcomes.
• Is a young science, which is still testing its
  methodology.
• The science will improve with application and
  value of the analysis to clinicians. Principle
  and methods balances the cost and outcomes and
  provides the best possible health care to the
  with available resources.
• Time and money can only be spent once- choice is
  inevitable. Whether done unconsciously or with a
  consistent process, healthcare professionals are
  constantly evaluating patients care choices
  acting on them.
• Results and interpretation of pharmacoeconomic
  studies are influenced by the perspective of the
  studythere is no one right answer.

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Thanks for Your Attention
!!