Economic Evaluation of Pharmacy Services

Zaheer-Ud-Din Babar

• Publisher: Academic Press
• Year: 2016
• Print ISBN: 9780128036594
• eBook ISBN: 9780128037003
• Topic: Medicine
• Subtopic: Economic Theory

Economic Evaluation of Pharmacy Services provides the latest on the trend to a more product-centered and service-centered practice, eschewing traditional economic evaluation techniques that focus on product-to-product comparisons in favor of evaluating processes that measure costs and health outcomes. Complete with examples focusing on best practices, including various study designs, types of pharmacy services, and types of outcomes being evaluated, the book emphasizes case studies and examples that help readers understand economic evaluation techniques. Many of these techniques are transferable across countries, especially where there are advanced and stable health systems in place. With the help of this practical guide, readers will gain a thorough understanding of the application of economic evaluation of pharmacy services. - Delivers a practical guide for conducting economic evaluations of hospital and community pharmacy services - Documents the literature around health economic evaluation and innovative pharmacy services - Guides the development of a standardized health economic evaluation tool to evaluate these services

Chapter 1

An Introduction to Economic Evaluation of Health Care Programs

C. Jommi^1,2, ¹Università del Piemonte Orientale, Novara, Italy, ²CERGAS Bocconi, Milano, Italy

Abstract

This chapter introduces readers to the rationale for economic evaluation applied to health care products and programs, its main aspects (evaluation of costs, evaluation of consequences/outcomes, economic evaluations techniques), methodological issues and recent developments (study design, health assessment, evaluation of economic consequences, definition and use of thresholds for the Incremental Cost-Effectiveness Ratio), and main issues derived from its application to pharmacy services.

Keywords

Economic evaluation; health care products and programs; methodological issues; recent developments; application to pharmacy services

Chapter Outline

Rationale for Economic Evaluation 1

Economic Evaluation: Costs, Outcomes, Techniques 2

Economic Evaluation: Methodological Issues and Recent Developments 6

Economic Evaluation and Pharmacy Services 7

References 9

Rationale for Economic Evaluation

Health market is characterized by an unbalance between supply of health services (resources used to deliver services, including people, time, facilities, equipment, and knowledge) and demand for health services, which is driven by economic growth, increase in life expectancy, technological innovation, and rising health expectations.

This unbalance may be found in other markets as well. In these markets, the excess of demand over the supply is managed by market mechanisms. In a purely competitive environment, suppliers will be forced to reduce prices to absorb the demand excess. In a monopolistic market, consumers who are not willing to pay for services will be excluded from the market. In health care markets, market mechanisms do not work well (information are incomplete and asymmetric, consumers are not rational, demand may be induced by the supply) or their consequences are not acceptable (e.g., access to services would depend on consumer income).

On the one hand, if this unbalance is not managed, there is a risk that health expenditure would increase exponentially. In fact, health care expenditure has been growing faster than the gross domestic product (GDP) in all main OECD countries in the last 25 years (Fig. 1.1). The incidence of health care expenditure over GDP has grown on average from 7.3% in 1990 to 10.8% in 2015.

Figure 1.1 Health expenditure over GDP (%; 1990–2015). From OECD Health Data (http://www.oecd.org/els/health-systems/health-data.htm, last access 11/7/2016).

On the other side, in the last 5 years (2010–15) the increase of ratio of total health expenditure to GDP dropped. It is obvious that cost-containment has dominated the agenda of public health care payers and economic crisis has negatively influenced private expenditure (Table 1.1).

Table 1.1

Health Expenditure Over GDP (%, Absolute Variation—Δ)

Country	Δ 1990–95	Δ 1995–2000	Δ 2000–05	Δ 2005–10	Δ 2010–15
Australia	0.4	0.7	0.4	0.5	0.8
Austria	1.2	0.3	0.4	0.5	0.2
Belgium	0.4	0.5	1.1	0.9	0.4
Canada	0.2	−0.3	0.8	1.6	−0.5
Denmark	−0.3	0.3	1.0	1.4	0.1
Finland	0.1	−0.5	1.2	0.9	0.8
France	1.9	−0.3	0.6	0.5	0.3
Germany	1.4	0.3	0.4	0.8	0.1
Greece	1.9	−0.7	1.8	0.9	−1.6
Ireland	0.5	−0.2	1.8	2.9	−1.3
Italy	−0.1	0.7	0.8	0.6	0.1
Japan	0.6	1.0	0.7	1.4	1.7
Netherlands	0.3	−0.3	2.4	1.0	0.3
Norway	0.2	0.4	0.6	0.6	1.0
Spain	0.9	−0.2	0.9	1.3	−0.0
Sweden	0.0	0.1	0.9	0.2	2.6
Switzerland	1.5	0.5	0.9	0.2	1.1
United Kingdom	1.0	0.2	1.2	1.0	1.3
Mean value	0.7	0.1	1.0	1.0	0.4
United States	1.2	0.0	2.0	1.8	0.5

Source: OECD Health Data (http://www.oecd.org/els/health-systems/health-data.htm, last access 11/7/2016).

In this context, a systematic and appropriate evaluation of economic consequences is necessary. Otherwise there is a risk that scarce resources are not efficiently allocated, when decisions are taken on long-term programs (e.g., Should we invest in a scoliosis screening program in secondary school? Is it worth investing in a clinical pharmacy service? Should public payers cover vaccines against Human Papillomavirus? Should a new drug at the price required by the pharmaceutical company be listed on the formulary?) or day-by-day action (Is it worth treating a patient with a new drug instead of an older one?). Economic analysis may support this decision-making process.

Economic evaluation, comparing costs and consequences of different courses of action, provides an answer to the following question: Does the new course of action (compared with the existing one) provide value for money (i.e., do added benefits justify added costs)? [1]. Budget impact estimates the impact on payers budget of a new course of action, thus providing evidence on its sustainability [2]. Integrating economic evaluation with budget impact, decision-makers are expected to take more rational decisions that incorporate economic arguments.

Economic Evaluation: Costs, Outcomes, Techniques

A full economic evaluation stands for a comparative analysis of costs and consequences of alternative courses of action (alternative ways of using scarce resources). Courses of action include different products (e.g., two drugs for the same therapeutic indication), different pathways (e.g., two different drug sequences), and different programs (implementing a community pharmacist-led diabetes management education program compared to the standard of care). In brief, two features characterize a full economic evaluation: (1) costs and consequences are simultaneously estimated and (2) to take decisions on alternative ways of using scarce resources.

Costs included into an economic evaluation analysis depend on the perspective used. The perspective may range from one of the health care payers (only health care services are included), other payers (e.g., payers of social care), the patient/family (out-of-pocket expenses, transportation co...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• Dedication
• Contributors
• Foreword
• Preface
• Chapter 1. An Introduction to Economic Evaluation of Health Care Programs
• Chapter 2. Economic Evaluation of Community and Hospital Pharmacy Services: An Introductory Review
• Chapter 3. Economic Evaluation of Pharmacy Services: Review of Studies From Asia, Africa, and South America
• Chapter 4. Economic Evaluation and Its Types
• Chapter 5. Design Principles for Economic Evaluations in Pharmacy
• Chapter 6. Steps in Conducting an Economic Evaluation
• Chapter 7. Evaluation of the Community Pharmacist-led Anticoagulation Management Service (CPAMS) Pilot Program in New Zealand
• Chapter 8. Economic Evaluation of Pharmacy Services in Portugal
• Chapter 9. Economic Evaluation of Pharmacist-Managed Warfarin Therapy: A Review of Studies
• Chapter 10. Economic Evaluation of a Medicines Management Model in New Zealand: A Proposal
• Index