Basic pharmaco-economy Is it needed at all?

1. Basic pharmaco-economyIs it needed at all?

2. DO WE AGREE? NATURALLY YES, BUT... HEALTH ABOVE ALL ...

3. It may sound strange, but drugs cost money!

4. The role of the Government: the creation of a balanced health-care system equity quality efficiency

5. All of them are important but not absolute! 1 • Equity: drugs are accessible and affordable for all • But this is not absolute: every drug can only be cheap if • the quality and efficacy are pure or • only few are available!

6. All of them are important but not absolute! 2 • Quality: naturally, all products and services must be of the highest possible quality • But this is not absolute: only a certain level of quality can be financed otherwise the equity is violated! • (If the highest quality drugs are not financed by the Government at all: they will be very expensive, not available for every patient!)

7. All of them are important but not absolute! 3 • Efficacy: to buy the possible highest amount of „health gain” for the money available („value for money”) • It may create the balance • However, this also can not be absolute: no patient or sickness can be neglected on the basis that „the treatment is not cost-effective”!

8. (Bad joke) • Who is the cost-effective pensionist (from purely economic point ov view)? • Who pays the pension-contribution thrughout his/her active life then, having gone to pension, dies soon

9. Out-patient drug costs, 2000 (EUR/inhabitants)

10. Per capita drug costs (USD, 2002)

11. It means that: • different countries can spend different amounts of money for medicines (to subsidize, to reimburse, etc.) • depending, naturally, on how „rich” is the country, but… • …for medicines represent an important means of the therapy, the „poorer” countries spend relatively „more” (in GDP %!)

12. Money spent for medicines and the Gross Domestic Product (GDP) Source: OECD Health Data 2004

13. Financing health-care Let us discuss the „different markets”!

14. „Pure health-care market” E.g. private patient and private doctor Patient Doctor The „goods” bought: the service (not the „health” itself!)

15. „Pure insurance market” Insurance Company Person The „goods” bought: the risk (undertaking of)

16. Health insurance market (in its „pure form”) Insurance Company Patient Doctor the patient buys insurance, the doctor treats him/her financed by the Insurance Company

17. Who pays the drugs? • This is a very special „market”! • Example: „going to a restaurant”

18. It means that, in case of full State Health Insurance: (part of) outpatient drugs are paid by the State (via the State Insurance Administration): only a part of the price of prescription-only medicines is co-paid by the patient, the remaining sum reimbursed to the pharmacy by the Insurance Administration • in hospitals the in-patient does not pay, the treatment is financed by the Insurance Company

19. In a number of countries • There are private Insurance Companies • or a mixed system (State and Private Insurance Companies)

20. Health insurance • Insurance schemes collect premiums from individuals or their employers to pay for health expenditures incurred by scheme members • Compulsory social health insurance/social security, private insurance (voluntary or through employer) managed care (which links health care providers to insurers) and small-scale community health insurance

21. Various models, 1 • Bismarck’s model: (part of) the health-care costs of the sick patients reimbursed (this is what generally applies) • Beckenbridge’s model: (part of) the (not exclusively) health-care costs of the poorest people reimbursed

22. Various models, 2 • UK: National Health Insurance covers every citizen • USA: only private insurance companies, not mandatory(many not insured citizens – no the Obama reform) • Many intermediate solutions! • What is common: Insurance bodies would like to cut drug expenditure

23. However, the money for medicines is never enough!

24. How to buy „more health” for the same sum of money: the answer is given by the pharmaco-economy!

25. Pharmaco-economy Recognition of the fact that drug costs involve not only therapeutic but also economic benefits and shortcomings

26. What do we buy when paying for a drug?

27. Basic issues of the pharmaco-economy To compare the various therapeutic possibilities with medicines, we need to clarify - comparison of different medicines - comparison of their therapeutic doses - the possibilities of comparison

28. To compare we need • adequate classification for „similar, comparable” drugs • measuring units for drug doses • measuring units for the therapeutic benefits • methods for the comparison

29. Comparison of medicinesissues • of the same active principle (different name, manufacturer, etc.) • of different active principles in the same thera-peutic groups similar

30. 1. Comparison of different medicines: „the same” and „similar” therapeutic groups.Drug Classification

31. The ATC drug classification system • Anatomical • Therapeutical • Chemical • Developed by the WHo Collaboration Centre for Drig Statistics Methodology in Oslo, Norway A code of 5 level, 7 digit

32. The ATC classification 1st level: anathomical (one digit) 2nd level: therapeutical main group (two digits) 3rd level: therapeutic subgroup (one digit) 4th level: chemical main group (one digit) 5th level: the active principle itself (plus two digits)

33. Example NCentral nervous system N02Analgetics N02BOther analgetics and antipyretics N02BASalicylates N02BA01Acetylsalicylic acid DDD = 3 g (see later)

34. The ATC system • 14 anathomic groups (A, B, C, D, G, H, J, L, M, N, P, R, S, V) the same substance may appear in more than one groups • e.g.certain sexual hormons “G03 sexual hormons” and „L02anticancer agents, hormones” • e.g. bromocriptin in small doses prolaktin-inhibitor (G02), in larger doses antiparkinson agent (N04)

35. 2. Comparison of therapeutic doses of different drugs ? = apple watermelon ? =

36. Frequently used, but not adequate • Medicine cost comparisonbut expensive innovative and cheap generic versions of the same drugs... • “Boxes sold” but how big are the boxes? It depends on the regulation of the highest permitted amount to prescribe patients… • Number of prescriptionsbut it is more characteristic to the doctor-patient visits…

37. DDD Defined Daily Dose • the general maintenance dose of a given medicine (API) • for a 70-kg adult • in the main indication Not necessarily prescribed so in every country! PDD: prescribed in the given country

38. DDD és PDD • Ethnic factors (Ind. Mat. Med. 1976)the people in India, as a rule, need lower doses (except laxatives) as Europeans… • Therapeutic schules (e.g. antibiotics: longer cures or higher doses for a short period of time)

39. DDD examples: • acetylsalicylic acid3 g (p.o.) 1 g (parent., lysin- acetylsalicylate) • enalapril 10 mg may be different for the same API in different indications or routes of administration (e.g. per os or i.v.)

40. Quantities of medicines consumed • as a rule, per unit of time and patient (drug utilisation), e.g. DDD/(1000 inhabitantsyear) • or the amount of medicine needed for a successful therapy, e.g. - total DDDs consumed - DOT (Day of Treatment)

41. DDD from the „number of boxes consumed” = 1000 = = DDD = No of inhabitants  year No of Boxes  DDD/box 365  No of inhabitants DOT 365  No of inhabitants

42. 3. „Measuring units” for successfullness (benefits) of the therapy

43. Principles • In all therapies, only a part of the patients do respond. As a rule, is: • recovering or • stagnating or • progressing • Often quantifiable • objectively (e.g. tumour size) • subjectively (e.g. „Quality of Life” scale, filled in by patients every day)

44. NNTNumber Needed to Treat • The smallest number of patients that must be treated by two methods to see one different • e.g. “A” treatment: 80% of the patients respond while 75% to the “B” treatment NNT = --------------- = 20 patients 100 80 - 75

45. NNHNumber Needed to Harm • The same for adverse effects • E.g. „A” treatment: tachycardia at 2% of the patients while treatment with „B” 0,4%: NNH = ---------------- = 62,5 (i.e. 63) 100 2,0 - 0,4

46. Odds ratio • The sickness is progressing in x% of the treatment group (e.g. 45%) • The same in the no-treatment group is y% (e.g. 90%) Odds ratio = = = 0,50 x 45 y 90

47. …and now let us turn to the issue that all these cost money…4. Methods of the pharmacoeconomy

48. Always incremental cost-effectiveness ratioICER… • should be calculated: the net incremental costs (costs minus cost offset) of gaining and incremental health benefit over another therapy • E.g. an outpatient treatment costs plus 1000 USD but saves an in-patient treatment that would cost 3500 USD, ICER = 3500 – 1000 = 2500 USD

49. Actually, how to calculate?It depends on the model

50. The methods used include 4 main concepts: • Cost-minimization • Cost-effectiveness • Cost-utility • Cost-benefit