Pharmacoeconomics - Cost Effectiveness Analysis

Front 1

Turning Point Question: Which of the following costs would be included in the numerator of a societal CEA on a new drug treatment?

Back 1

The cost of the drug

Changes in healthcare resources used as a result of the drug (such as side effects due to the drug, treatment failures due to the drug, and reduced healthcare resources consumed as a result of the drug)

Work productivity costs

Front 2

If the question was worded to ask the same question from a payer perspective, what would the answer be?

Back 2

The first two, but not work productivity costs due to the drug since productivity doesn't directly affect payers

Front 3

What is a QALY? What is the advantage of using QALY's?

Back 3

Quality Adjusted Life Years

Can compare cost effectiveness of a wide variety of interventions/healthcare programs

Front 4

Who tends to use CEA data?

Back 4

Not the american government - Although they are signaling that they are beginning to via funding CEA research and a bolus of funding

Healthplans do use it to make informed decisions such as adding interventions to their formulary
Hospitals will use CEA

Front 5

When did Cost Effectiveness Analysis begin being used?

Back 5

US PHS 1993 - To enhance perspectives for health-related decisions. To assess the current state of the art in CE methods and provide recommendations to improve quality and encourage comparability of results.

Front 6

What did this panel recommend?

Back 6

Using a societal perspective to include both direct and indirect cost.
However, also doing other perspectives also if relevent (payer perspective subanalysis)

Front 7

Continuation of last answer

Back 7

Using a reference case (gold standard - practices that will define the treatment of the disease) - In CEA you compare treatments to the standard of care
The reference case in this case is the standard of care you are comparing another intervention to.

Front 8

Turning point question: In a CEA of new oral anti-coagulants, warfarin is an appropriate choice for the reference case.

Back 8

True - Warfarin is the standard of care to which other interventions are compared to.

Front 9

What are the 5 steps to conduct a CEA?

Back 9

1) Define the problem and identify relevant treatment alternatives
2) Identify data sources
3) Measure costs and outcomes
4) Calculate cost effectiveness metrics (ACERs, ICERs)
5) Report the results

Front 10

In defining the problem and identifying treatment alternatives, you want to determine the objectives of your CEA (including the studys persepctive) and all clinically relevant treatment options

Back 10

Experimental studies (clinical trials) - These trials are not done with cost in mind, but only the effectiveness of the intervention. So, CEA researchers will piggyback clinical trials and covert their findings to cost variables.
Observational studies
Retrospective studies

Front 11

The drawback of piggybacking is the lack of generalizability. The results are confined to the type of patient population in the study and doesn't translate well to society.

Back 11

RCT's not generalizable but strong design
Observational studies generalizable but not strong design
Retrospective Databases (claims data - very poor for outcome data, registries - get better outcome data from but very expensive and so there are not a lot of them)
Electronic medical records hold a lot of promise as a data source

Front 12

In measuring cost and outcomes, which goes in the numerator and which goes in the denominator?

Back 12

Cost/Outcome

Front 13

What goes in the numerator (costs)?

Back 13

Selection of costs is based on perspective as well as characteristics of the disease and treatments being evaluated in the CEA
Societal = direct + indirect costs
Plan = Don't look at productivity (indirect costs)
Patient = Out of pocket costs (co-pays, deductibles, spending on your care as well as your work impact - costs that are relevant to you)

Front 14

What goes in the denominator (outcomes)?

Back 14

Selection of outcome is also based on perspective as well as characteristics of the disease and treatments being evaluated in the CEA

Front 15

Outcome measures that would be used in a CEA study of anti-hypertensive medications.

Back 15

Surrogate endpoints (Blood Pressure
Events prevented (Stroke, MI)
Survival (lives saved, years of life gained)
Quality of life (usually measured as quality adjusted life years)

Front 16

What do ACER and ICER stand for?

Back 16

Average Cost Effectiveness Ratio

Incremental Cost Effectiveness Ratio

Front 17

What is the equation for ACER?

Back 17

ACER = C/E

C = Total cost of the treatment/program

E = Effectiveness of the treatment/program

Front 18

Provide an example of an ACER.

Back 18

Treatment cost 500$
Lowers cholesterol 10 points
500/10 = 50$ per point lowered

Front 19

What is the equation for an ICER?

Back 19

ICER = Cost of Treatment B - Cost of Treatment A/ Effectiveness of Treatment B - Effectiveness of Treatment A

Front 20

Provide an example of an ICER.

Back 20

New antibiotic treatment (700$) yields 15 cures.
Standard of care (400$) yields 12 cures.
700-400/15-12 = 300/3 = 100$ per cure
Interpretation = It costs 100$ for each additional cure with Antibiotic B compared to Antibiotic A
***This is the preferred measure of CEA because it can be used to compare competing treatments/programs***

Front 21

Cost Utility Analysis

Back 21

Compares the total costs of a therapy to the utility of the outcome gained where utility is a measure of the quality and/or quantity of life gained before of the treatment/healthcare program
Usually quality and quantity are used together (QALY)

Front 22

When is CUA appropriate?

Back 22

1) When the treats/programs being compared effect morbidity and/or mortality (when the disease effects the persons quality of life long-term)
***QALY is not a good measure in short-term treatments such as antibiotic therapy***
2) When its required (by purchaser or regulatory body)

Front 23

What is the equation for the QALY?

Back 23

QALY = (quality of life) x (time in that quality of life state) x (individuals utility for life during that time)

***This is the primary effectiveness measure for CUA and is measured over a one year period***

Front 24

The value of the treatment in a population can therefore be measured as the sum of QALYs experienced by individuals with the disease and receiving the treatments/programs of interest

Back 24

The individuals utility for life during that state is how much they value that quality of life during that state.

Front 25

Once the costs per QALY are defined, a willingness to pay threshold is determined and is usually around 50,000$.

Back 25

There are however, instances such as cancer where society is willing to pay more.

***CUA is a subgroup of CEA***