PHARMACOECONOMICS

The term pahrmacoeconomics encompasses the economic aspect of the drugs resulting in the cost
effectiveness of the therapy. There are number of established methods of pharmacoeconomic analysis,
including cost benefit analysis (CBA), cost effective analysis (CEA) and cost minimization analysis
(CMA).

1. Cost benefit analysis (CBA)

While performing CBA running cost of all the procedures and treatments are calculated and
scrutinized among the different courses of treatment. To analyze benefit-to-cost ratio is calculated
using formula;

Benefit-to-cost ratio = benefit/ cost

Example
Determine the benefit to cost ratio for a program in which cost of the involvement a lab procedure is Rs. 2500
and the benefit obtained is Rs. 8000

Benefit-to-cost ratio = 8000/ 2500 = 3.2

2. Cost effective analysis (CEA)

CEA compares treatment alternatives with cost and treatment outcomes expressed in term of
therapeutic objective as follows;

Cost-to-effectiveness ratio = cost (rupee)/ therapeutic outcomes in measurable units

Example

Find out the cost to effective ratio for a treatment of anemia involving two different therapies. Both the therapies
were continued for 6 months and the haemoglobin level of the patient was increased to 15.5 and 16.0 g/dl (for
therapy A and B respectively). The total cost of therapy A was Rs. 20,000 and for B was 21,000. Take 10.0 g/dl
the initial value.

Cost-to-effectiveness ratio = (20,000)/ 15.5 – 10.0 = 3636 (Rs/ g/dl) {for therapy A}

Cost-to-effectiveness ratio = (21,000)/ 16.0 – 10.0 = 3500 (Rs/ g/dl) {for therapy B}

3. Cost minimization analysis (CMA)

Cost minimization analysis involves the comparison of two or more treatment alternatives, the
outcomes of which are assumed or determined to be equivalent.

Some other calculations are given below.

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4. Cost differential between drug products

In this method a comparison is made between the costs of different brands of the same generic.

Example

The cost of unit dose of amoxicillin (1g) for therapy of peptic ulcer was Rs. 30 for brand A and Rs. 40 for brand
B. Therapy was continued for the 10 days and the drug was administered two times a day. Calculate the drug
differential.

Cost of brand A = {30*2 × 10} = 600

Cost of brand B = {40*2 × 10} = 800

5. Cost differential between dosage forms and route of administration

Different sorts of dosage forms and routes are used for different patient depending upon the condition
of the patient. There comparison is made for the calculation of the cost effectiveness of the therapy.

Example
Zartash was to be treated for H. pyloric peptic ulcer. Ciprofloxacin 500 mg two times a day was prescribed by
physician. A company produces 500 mg plain and sustained release (SR) tablets: Conventional tablet for two
times and SR for one time a day. If therapy is to be continued for 12 days calculate the cost differential for the
treatment. (conventional is available @ 450 rupees/10 tablets and SR @ 650 rupees/10 tablets).

Cost of one conventional tablet = 450/10 = 45

Cost of SR tablet = 650/10 = 65

Cost of complete therapy for conventional tablet = (45*2) × 12 = 1080

Cost of complete therapy for SR tablet = 65 × 12 = 780

Cost differential = 1080 – 780 = 300

6. Cost differential of alternative treatment plans

Different treatment plans are suggested for a particular patient. In this method the costs of these
methods is compared.

Example
Calculate the saving of the patient if it patient is not admitted to a hospital for 3 days for a surgical treatment, the
daily expenditure of which is Rs. 1000 along with treatment. But the actual medical treatment costs just Rs. 200
per day for 20 days.

Cost of medical treatment = 200 × 20 = 4000

Cost of surgical treatment = 1000 × 3 = 3000

Potential saving of the patient = 4000 – 3000 = 1000

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Calculate the cost of 3 months treatment with captopril. If available conventional and SR brands cost
Rs. 1200/100 tablets and Rs. 2000/100 tablets respectively. The conventional is administered @ two
tablets/day and SR @ one tablet/day.

Cost for conventional tablets

Cost for SR tablets

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If a hospitalized patient is to be treated for peptic ulcer by either thermal therapy or omeprazole.
Calculate the potential saving of the patient. Cost of the thermal therapy is Rs. 4000 plus hospital
expenditures of Rs. 1000. Patient is kept in ward for 5 days for thermal therapy and 7 days for drug
therapy (available brand of omeprazole costs Rs. 800/ 8 tablets and frequency is once a day).

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Calculate the costs of the 12 month therapy with atenolol 25 mg. the frequencies are mentioned in par
brackets. The available brands cost

A)Rs. 200/10 tablets

B) Rs. 150/10 tablets
C)Rs. 100/10 tablets

Adam (OD)

A)

B)

C)

Charles (Bd)

A)

B)

C)

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A brand (A) contains four drugs (Isoniazid, Rifampin, Ethambutol and Pyrazinamide) for the treatment
of T.B. The cost of the brand is Rs. 100/10 tablets. 4 tablets daily for 3 months is to be taken. Another
brand (B) contains three of these four and the therapy is to be continued for 6 months (4 tablets daily).
The cost of the B is Rs. 75/10 tablets.
Calculate compare the treatment protocols for the cost effectiveness

Cost of therapy for brand A

Cost of therapy for brand B

Cost differential

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Use the patient profiles (filled during hospital visits) and find out the therapeutic alternatives for the
cost effectiveness of the therapies and workout for cost effectiveness.

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