Pharmaceuticals

1. Pharmaceuticals Economic Analysis

2. Pharmaceuticals • Schizophrenia • Pharmaceuticals used to control schizophrenia • Cost benefit analysis of these drugs

3. Economic Analysis • “In January 1993 the Guidelines for the Pharmaceutical Industry on Preparation of Submission to the Pharmaceutical Benefits Advisory Committee (PBAC; Commonwealth Department of Health, Housing and Community Services, 1992) [10] took effect in Australia. The guidelines, first released in 1990 and revised in 1992 and 1994, require pharmaceutical companies to include an economic evaluation of their drug products in their applications for reimbursement through the government subsidy scheme.” • Australia is the first in the world to mandate economic Analysis through legislation. • Many other countries are investigating similar approaches: Canada and the UK.

4. Common Guidlines • (a) use of a recognized form of analysis (cost-minimization analysis, cost-effectiveness analysis, cost-utility analysis, cost-benefit analysis) • (b) careful and justifiable choice of comparators for analysis; • (c) careful and critical use of high-quality clinical evidence as the basis for economic evaluation, using prospective randomized controlled trials (RCTs), and meta-analyses of RCTs where possible; • (d) use of marginal analysis; • (e) use of discounting and sensitivity analysis.

5. Problems • Study perspective: how macro/ how micro should it be. • Choice of discount rate: Australian guidelines recommend consistent discounting of costs and outcomes over time. The UK guidelines require discounting of non-monetary benefits at both the Treasury rate and at a rate of zero. • economic modeling based on efficacy rather than effectiveness data from clinical trials and the defects of available data. • In all health care systems, prices are not equivalent to costs, and thus the use of charges is an inaccurate way of estimating opportunity cost.

6. Clozapine • “The approximate average cost in the UK for a 30-day treatment with clozapine is [pound sterling] 168, and for risperidone [pound sterling] 112. This compares with less than [pound sterling] 30 for haloperidol (Davies & Drummond, 1993; Drug and Therapeutics Bulletin, 1993)”

7. Use of Clozapine • Clozapine is a class of dibenzodiazepine antipsychotic agent which can be useful in treating patients with severely treatment-resistant psychosis, including those with negative symptoms of schizophrenia (Kane et al, 1988). [30] It has less propensity to cause extrapyramidal side-effects than typical antipsychotic agents such as chlorpromazine and haloperidol (Marder & van Putten, 1988).

8. First Study • “the average mental health services cost for the clozapine group (excluding the costs of clozapine) was below those of the conventional neuroleptic group, primarily as a result of patients being discharged from hospital. The authors concluded that after two years the net saving to the health care system was US$12 000-15 000 per patient.”

9. Second Study • The basic case analysis suggested that use of clozapine would lead to a net gain of 5.87 life-years with no disability or only mild disability, and also a saving of [pound sterling] 91 per year in direct health care costs. Extensive sensitivity analysis showed that clozapine would be cost saving or cost neutral under many different assumptions.

10. Third Study • The most recent economic evaluation of clozapine is a US study by Meltzer et al (1993). [37] This is a type of 'before and after' study, which collected data on 96 subjects with treatment-resistant schizophrenia for two years before and two years after entry into a clozapine treatment study. The cost of treatment was significantly decreased in the patients who continued to take clozapine for at least two years, due to a dramatic decrease in the frequency and cost of hospitalization. Taking into account all patients (including drop-outs) there was a saving of US$8700 per patient per year over the two years.