Dr Renee Arnold Explains the Benefit of Pharmacoeconomic Analysis
With the high cost of medications, pharmacoeconomic analysis to determine the additional benefit being derived from additional cost is important, explained Renee JG Arnold, PharmD, RPh, practice lead for health economics and outcomes research at Quorum Consulting, Inc
Transcript (slightly modified) What is the importance of pharmacoeconomic analysis in healthcare decision making?
Well, pharmacoeconomic analysis is basically what somebody would consider cost effectiveness analysis. And it really helps to determine what is the additional benefit that you’re deriving for typically an additional cost, and especially with today’s pretty expensive medications it’s really important to determine if something is cost effective.
Can you provide an overview of the different types of evaluation techniques?
Right, so they really only differ in their denominator. Cost effectiveness or pharmacoeconomic analysis is basically cost divided by effectiveness. So if you do a cost minimization analysis you’re looking for equally effective agents or alternatives and, in which case, the denominator goes away basically. In a cost benefit analysis, the denominator is in monetary units so it’s dollars. Cost effectiveness analysis is usually some kind of metric like life years saved or myocardial infarction avoided. And cost utility analysis is a subgroup of cost effectiveness analysis in that it uses a quality of life adjustment to that effectiveness metric.