Importance of Pharmacoeconomics
There are four main stakeholders, who are involved in Pharmacoeconomics.
They are:
- Pharmaceutical Manufacturers
- Healthcare practitioners/prescribers,
- Pharmacists
- Patients.
Pharmacoeconomics is important to all of them. The issues related to each stakeholder are discussed below.
- To Pharmaceutical Manufacturers:
Long before a drug is approved for use by the FDA, Pharmaceutical companies must invest a significant amount of money in the drug development process. Manufacturers can avoid wasting significant resources on the development of a medicine that does not provide a competitive advantage if thorough pharmacoeconomic research is undertaken.
In today’s healthcare climate, a competitive advantage might be characterised as “a cost-effective medicine.” Cost-effective can refer to a drug that is less expensive and at least as effective as an alternative that is both more effective and more expensive. However, improved health outcomes justify increased expenditures or a viable alternative for some individuals that is less effective and less expensive than an existing alternative.
The likelihood of an investigational new medicine leaving the lab is determined by its projected safety and efficacy, both of which are determined by a number of particular measurements or evaluations (e.g., toxicology, adverse reaction teratogenicity and pharmacology). Another factor to examine is the investigational drug’s projected pharmacoeconomics. That element would also include particular evaluations such as the societal and individual costs of the condition for which the drug is prescribed, the costs and consequences of existing treatment techniques, and the disease’s and existing treatment’s influence on the patient’s quality of life (QOL). Cost-effectiveness and QOL components can be integrated into appropriate phase III studies to help minimise uncertainty and contribute to the knowledge base used to decide whether to further study a treatment via prospective clinical trials to provide additional information regarding a drug’s impact on a patient outcome. If such parameters are applied systematically to all-new treatment candidates, the scientific basis of drug therapy decision making will increase substantially.
- To Healthcare Practitioners:
Helping doctors and policymakers make better decisions is one of the most common applications of pharmacoeconomics in clinical practice. When making a full pharmaceutical decision, clinical, economic, and humanistic consequences should all be considered. Decisions about which drugs to buy can no longer be made solely on the basis of cost. This method is misleading because it ignores the potential consequences of inferior safety and efficacy profiles. With the right use of pharmacoeconomic concepts and methods, these three critical components can be incorporated into clinical decisions.
Pharmacoeconomic data can be a powerful tool that supports various clinic decisions, including effective formulary management, individual patient treatment, medication policy. and resource allocation. For example, Pharmacoeconomics can provide critical cost-effectiveness data to support formulary addition or removal. The formulary is a regularly revised collection of pharmaceuticals based on current clinical judgment and helps the medical staff of a given institution and experts in the diagnosis and treatment of disease Pharmacoeconomic data can support the inclusion or exclusion of a drug on or from the formulary and support practice guidelines that promote the most cost-effective or appropriate utilization of pharmaceutical products.
Pharmacoeconomics can be included in formulary decision-making in a variety of ways. Using established pharmacoeconomic studies and economic modelling approaches, as well as doing local pharmacoeconomic research, are some of these options. Pharmacoeconomic analyses of formulary decisions assist in ensuring that the agents recommended by our formulary provide the best value for money. In reality, if based on reliable pharmacoeconomic data, pharmacoeconomic assessment of formulary action is becoming a routine aspect of many pharmacy and therapeutic (P&T) committee decision-making processes. When it comes to hospital resources, there is a lot of competition.
pharmacoeconomics can provide the data necessary that a pharmacy service maximizes the resources allocated to it by hospital administration. Evaluating the impact a drug has on a patient’s health-related quality of life, can be useful when deciding between two agents for an individual patient treatment decision. In the past, the inclusion of economic outcomes (costs) in clinical decisions seemed to necessitate compromise in the quality of care delivered. However, when used appropriately. Pharmacoeconomics can assist in balancing cost with patient outcome (quality of care), often resulting in maintaining or improving quality of care, with potential cost savings. The best-valued drugs will be those with optimal patient outcomes per rupee/ dollar spent compared to competitors. In the cost-conscious environment, Pharmacoeconomic research is important to the healthcare practitioner.
- To Pharmacists:
Pharmacists provide a variety of services, including drug use evaluation. That value should, ideally, be reflected in inpatient and financial outcomes. Drug usage evaluation focuses on the most cost-effective therapy, in addition to focusing on incorrectly prescribed therapy and overprescribing. To make such a conclusion equitably, taking into account patient considerations, disease factors, and other difficulties, a high level of complexity is required.
Drug formulary services, pharmacy and therapeutics committees are seen as a way to cut drug costs, and they have some value in encouraging drug therapy cost considerations, but they do not provide incentives to consider overall medical costs, nor do they always consider all consequences, such as potential drug interactions, adverse reactions, and treatment response rates. Cost-effectiveness studies allow for an assessment of total costs and consequences from a variety of angles.
- To Patients:
Patients are the final beneficiaries of the treatment offered to them. In a country like India, where out-of-pocket expenses are as high as 60 to 70%, most of the expenses on drugs are to be borne by patients. The only exception is that of people who are insured for their health. However, that fraction is very small, as low as about 20% in India. Thus, major. expenses on drugs are to be borne by patients, hence pharmacoeconomics is highly relevant for them. In any category of drugs with the same mechanism of action, the cheapest drug is the best option for a patient. However factors like frequency of doses, the total cost of the treatment also need to be considered while selecting a drug For an average patient, essential drugs would be the best choice. This is because they are likely to be the cheapest among the selected category. Generic drugs can be the nearest approximation.
The only significant difference is that most medications are chosen by a doctor for his or her patients. As a result, patients have a limited number of drug options. If a doctor prioritises patient affordability of drugs, it will benefit patients. On the other hand, if pharmaceutical companies use irrational marketing practices to persuade doctors to prescribe more expensive brands with an implicit indirect pay-back to doctors, it will be detrimental to patient’s financial interests. One observation is that every year, 2 to 5% of patients in India are pushed below the poverty line due to healthcare costs; this is an essential indicator of what is happening on the ground. Poor patients are the hardest hit segments of the entire link, due to high out-of-pocket expenses, absence of insurance, and lack of affordability being observed/practised by prescribers. If pharmacoeconomic considerations are followed by prescribers to the benefit of patients, then it will be a great service to the patients.
Application of pharmacoeconomics in practice:
- The value of one treatment over another in terms of the cost for each unit of health gained.
- Avoidance of costs associated with the failure to use an appropriate medicine, for example antimicrobial surgical prophylaxis.
- Avoidance of the costs of the side effects or adverse effects of a medicine.
- Financial planning and horizon scanning for new medicines.
- Prioritization of health care resources. Health gain, quality of life issues and patient preferences.
- Duration of care and balance between inpatient, day care and outpatient care.
- Changes in legislative controls, for example reclassification of medicines from prescription only to pharmacy status.
- Costs of concordance and non-concordance.
- Economics of health service delivery.
Notes Chapter 6 Pharmacoeconomics
6.3 importance of pharmacoeconomics
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