Role of pharmacoeconomics in

         formulary management decisions

Presented By-
Anas Ahmad
1700100151

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 • Pharmacoeconomics, is the science of comparing the
costs and outcomes of various medical treatments
What is which has been used in decision making process.
pharmacoeconomics? • Pharmacoeconomics evaluates the impact that a drug
therapy, medical device, or other intervention has on
total health care expenditures relative to other
interventions. Although research into health economics
has been conducted for several decades.

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• The rise of pharmacoeconomics studies has been rapid in the past 30
years: Five economic evaluations were published in 1966 and 518 in 1996;
between 1991 and 1996 over 2,000 pharmacoeconomic studies were
published: Several economic evaluations have suggested that the
adoption of new drugs and the increased use of existing drugs may lead to
a reduction in total health care expenditures

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 What is formulary
?

• A formulary can be defined as a "list of drugs selected by formulary committees from the commercially

available ones" and its primary purpose is to "discourage the use of marginally effective drugs and treatments"

and to ensure the selection of medications that have been demonstrated to be safe, effective and affordable or

improving quality of patient care

• Pharmacy and Therapeutics Committees function at various levels to make formulary decisions

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The Formulary decision-making process

• Decisions on formulary listing require transparency and should be justifiable to all stake holders as they could

have far-reaching consequences that may impact on a number of people such as patients, health care workers

and employees of the manufacturers.

• Due to a wide variety of drugs that are available on the market, their escalating costs and the continuous

introduction of new ones, a key consideration is which drugs to list in the formulary and which ones to exclude?

This decision-making task is the responsibility of Pharmacy and Therapeutics Committees (PTC), whose

members are appointed on the basis of their drug therapy expertise .

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In making a selection of drugs to be included in the formulary the PTC needs to be aware that there are several factors that

can contribute to the choices that the members make.

Factors influencing the selection of drugs for formularies are the following:

1. Emotional factors- A member's dislike of a drug can be based on a case of bad side-effects that one of his/her patient

once experienced regardless of the assurance from research of the fact that such incidence was a rare occurrence

2. Hidden factors- This might be influenced by the interaction (either positive or negative) that a member might have

with the pharmaceutical company

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3. Unconscious factors These can result from the member's familiarity with the drug or class of drugs as well as

an influence by the opinions of colleagues and well informed patients. It can also be simply out of a habit

4. Hidden factors such as financial gain or any form of incentive from a pharmaceutical company.

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Major considerations in the formulary decision-making process

• Participants were requested to describe the procedure that their organisations follow in making formulary

decisions and were asked to indicate what the major considerations in the process are.

• No respondent described the procedure in any detail although a few indicated that they employed a structured,

stepwise approach.

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• Their responses with regards to the considerations factored into the process can be can be

classified into four major categories as summarised

• The categories are:

• i.clinical issues

• ii.cost issues

• iii.drug characteristics

• iv.other factors.

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 The extent to which pharmacoeconomic data is used in the formulary
decision-making process

The majority (58%) of respondents from all sub groups reported that pharmacoeconomic data is considered in

some decisions, followed by 21% who reported that it is considered in decisions, as opposed to 18% of the

respondents who reported that they consider pharmacoeconomic data in every decision. Lastly, only 3% of

the respondents from all the sub groups reported that pharmacoeconomic data is considered in almost no

decisions

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