Mohammad Aljawadi PharmD, PhD Clinical Pharmacy Department King Saud University PHCL 431 Sep, 2015

Upon completing this chapter, the pharmacy learner will be able to:  Define and describe cost-minimization analysis (CMA).  Address advantages and disadvantages of CMA.

 Definition: A comparison in which inputs are measured in monetary values and outcomes are assumed to be identical.  Measures and compares input costs  Assumes outcomes to be equivalent  Very crucial

 Comparing the cost of two medications:  Same chemical entity  Same dose  Same indication  E.g. brand vs. generic, Panadol® vs. Fevadol®  Measuring the cost of the same medication in different settings  IV antibiotic in hospital vs. IV antibiotic in nursing home

PGE2 2-hour monitoring period Send the expectant mother home for the night 2-hour monitoring period Send the expectant mother to the maternity unit overnight Apply

 Perspective: Payer  Direct medical cost were included  Authors found:  No difference between the two groups in the outcomes (% of cesarean section and amount of oxytocin needed)

Upon completing this chapter, the reader will be able to:  Define and describe cost-effectiveness analysis (CEA).  Address the advantages and disadvantages of CEA.  Discuss the different methods of presenting cost- effectiveness results.  Illustrate the use of a cost-effectiveness grid and a cost- effectiveness plane.  Compare intermediate- with final-outcome measurements.  Compare the terms “efficacy” and “effectiveness.”

 A comparison in which inputs are measured in monetary units and outcomes are measured in natural units of effectiveness.  CEA measures outcomes in natural units (e.g., mmHg, cholesterol levels, symptom-free days [SFDs], years of life saved)  Easy to comprehend by clinicians  Easier than CBA or CUA

 What cannot CEA measures:  Cannot compare different types of outcomes Implementation of an anticoagulation clinic with implementation of a diabetes clinic Antihypertensive drug vs. asthma drug Antihypertensive drug vs. antihypertensive drug but different outcomes Life-years saved vs. number of mmHg reduction

 Patients with symptoms of stomach ulcer  Diagnosis can be made based on: Symptomology Endoscopy  Outcomes: Symptom-free days / year  Number of days without any gastrointestinal (GI) sumptoms % of patients healed  based on endoscopic results

 Method 1:  Inputs are measured in monetary values and outcomes are listed in a variety of ways.

16  Positive ICER  More costly; more effective  Less expensive; less effective

17  Negative ICER  More costly; less effective  Less expensive; more effective

 Dominant: The treatment of interest is both more effective and less expensive than a comparator treatment.  Dominated: The treatment of interest is both less effective and more expensive than a comparator product.  The ICER is used to determine the magnitude of the added cost for each unit in health improvement.

N EW S SW NE

N EW S SW NE A B C

 Not easy to determine a confidence interval around the ICER  It does not answer whether the intervention is more cost- effective, that is, is the added benefit worth the added cost?  It depends on how much you are willing to pay

 Willingness to Pay (λ):  The estimate of how much people are willing to pay to reduce the chance of an adverse health outcome or increase the change of a positive outcome

30  Vary value of λ  Plot cost-effective replicates against λ  At λ=$100, 90% of replicates are CE Probability CE λ

 Intermediate vs. Primary outcomes:  Primary outcomes are preferred over intermediate unless there is strong association between them.  Efficacy vs. Effectiveness:  Efficacy: Outcomes measured under controlled conditions (usually randomized, controlled trials).  Effectiveness: Outcomes measured in the “real world” or routine clinical practice.

should NOT discount: Should discount: 1)Health can’t be invested i.e. you can’t save one life year and now and use it in the future or yield additional life year in the future. 1) Although health can’t be invested people are willing to make changes in their life to enjoy healthier life in the future. Otherwise we would not have seen people abstaining from pleasurable unhealthy behaviors. 2) If you discount this means that you give more weight for current generation than future generation. 2)The fact that we are putting more weight in current generation than future doesn’t take in its account that future generations will have more health technology advantages.In addition, with the positive economic growth since World War II people are getting healthier and richer over time. Therefore by not discounting we are shifting resources from sick individuals to healthier individuals. 3)Preventive programs that have their health benefits in the future will not implemented if discounting was carried out since the benefit will appear smaller compared to programs that have immediate health benefits. 3)If two programs have the same discounted cost and the same Undiscounted health benefits (e.g. 100LY) however one of them (program A) obtains the HB within one year and the other (program B) after 50 years, they will have the same ICER. In addition, if program B gives one extra day as benefit over program A then program B will be more cost effective which doesn’t make sense. If we don’t discount this means that we will have constant return of health benefits over time and therefore we should implement the program regardless of the initial cost since at one point of time the program will be cost effective.