In most countries around the world, health care costs have increased faster than costs in any other sector of the economy. This is most notably because of a rise in life expectancy and standard of living, chronic diseases, discovery of new diseases, new treatments, new technologies, and development of the pharmaceutical industry. Accordingly, nowadays it is a challenge for healthcare professionals to provide quality healthcare, which must not be compromised while making an effort to control costs and should demonstrate pharmacoeconomic value – that is, a balance of economic, humanistic and clinical outcomes.
Pharmacoeconomics is the discipline of placing a value on drug therapy. As a sub discipline of health economics, pharmacoeconomics identifies and compares the costs and consequences of pharmaceutical products and services to healthcare systems and society as a whole. It aims to determine which alternative produces the best outcome with respect to the resource invested. This is accomplished through the quantification of the value of pharmacotherapy by balancing costs and outcomes. Pharmacoeconomic methods can be applied for effective formulary management, individual patient treatment, medication policy determination, and resource allocation.
As a consequence of limited financial resources, pharmacoeconomic analyses are becoming a frequently used criterion for decision making in modern health care policy.
By understanding the principles, methods, and application of pharmacoeconomics, healthcare professionals will be prepared to make more informed decisions regarding the use of pharmaceutical products and services. Needless to say these decisions ultimately represent the best interests of the patient, the healthcare system, and society.
Pharmacoeconomic analysis uses tools for examining the outcomes or impact (desirable, undesirable) of alternative drug therapies and other medical interventions. These tools can be separated into two distinct categories: economic (cost-benefit, cost-effectiveness, cost-minimization and cost utility) and humanistic (quality of life, patient preferences, patient satisfaction) evaluation techniques. All economic methods provide means to compare competing treatment options, however, measurement of outcomes and expression of results are different. Among the economics tools of pharmacoeconomic analysis, cost-utility is the most versatile and sophisticated in that it integrates the patient benefit (patient value) conferred by a drug both in terms of an improvement in length and/or quality of life. It also incorporates the costs expended for that benefit, as well as the dollars returned to patients and society from the use of a drug. However, an issue that arises with cost-utility analysis is that it is generally not comparable to another cost-utility analysis because of the lack of standardized input variables which can include costs, cost perspective, quality-of-life measurement instruments, quality-of-life respondents, discounting and so forth. An increasingly popular value-based medicine (VBM) cost-utility analysis standardizes these variants so that one VBM analysis is comparable to another. This system provides a highly rational methodology that allows providers and patients to quantify and compare the patient value and financial value gains associated with the use of pharmaceutical agent.
It is important to note that there are potential issues with pharmacoeconomics which may arise in practice. First of all, the analysis itself is often prone to bias. This includes problems with clinical trial data transferability, selective reporting of final results, and the choice of comparative therapy. Also, implementing the study results is not an automatic process. This is mostly due to the management and decision making bodies as not all committees for drug reimbursement have a pharmacoeconomist. This can also occur because of drug policies since the drug may be proven to be cost-effective but for some reason not reimbursed. In most cases there is a problem with budget impact issues, shifting from payer to hospital budget, or simply that the drug is too expensive. Establishing guidelines and standards of practice, training professionals of pharmacoeconomics for healthcare practitioners, government officials and private sector executives currently continues to be the one of the main challenges of pharmacoeconomics.
The overarching goal of pharmacoeconomics is to contribute to the rational use of drugs by incorporating cost in the questions on safety, efficacy and quality of different medical therapies, and to search for a better relationship with the costs and results. Greater use of pharmacoeconomic evaluation should assist clinical staff and administrators to make better decisions regarding medical products and services, including effective formulary management, individual patient treatment, medication policy, and resource allocation.
Quality healthcare must above all demonstrate pharmacoeconomic value – a balance of economic, humanistic and clinical outcomes.
Today, the appraisal of healthcare goods and services extends beyond evaluations of safety and efficacy and considers the economic impact of these goods and services on the cost of healthcare.
Due to the increased pressures and queuing towards healthcare budgets, the future potential investments are becoming increasingly important. Quantifying the value of drugs through pharmacoeconomics is a prerequisite for new therapies in dermatology due to the new and expanding biologics, the new state-of-the-art diagnostics and devices.