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AN INCONVENIENT TRUTH (no 2):

AN INCONVENIENT TRUTH (no 2):. Rationing in Healthcare and the role of pharmacoeconomics . Prof. Tienie Stander 17 July 2010. TODAY’S AGENDA. HIV in context Illustrative pharmacoeconomics (PE) The theory of PE The practice of PE Case studies Q & A. HIV in context. Prevalence (M).

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AN INCONVENIENT TRUTH (no 2):

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  1. AN INCONVENIENT TRUTH (no 2): Rationing in Healthcare and the role of pharmacoeconomics. Prof. Tienie Stander 17 July 2010

  2. TODAY’S AGENDA • HIV in context • Illustrative pharmacoeconomics (PE) • The theory of PE • The practice of PE • Case studies • Q & A

  3. HIV in context Prevalence (M) 25 years $150 billion 50k papers Deaths (M/yr) www.unaids.org

  4. Illustrative PE Meet the Simpsons … How on earth am I going to feed these kids? Mary Josh Angela

  5. Illustrative PE (cont.) Mary has the following concerns: • I only have €200 to feed the family • What is the best food to buy given my financial constraints? • How should I allocate the food once bought?

  6. Q & a

  7. Illustrative PE (cont.) What is the best food to buy given my financial constraints?

  8. Illustrative PE (cont.) What is the best food to buy given my financial constraints?

  9. Illustrative PE (cont.) How should I allocate the food once bought?

  10. Illustrative PE (cont.) How should I allocate the food once bought?

  11. Illustrative PE (cont.) • The Simpsons X 50 million = a country called DRD (Democratic Republic of Dilemma) • Mother Mary = Minister of Health of DRD • Suffering from the same dilemmas: • Limited resources • Unlimited needs and expectations • What healthcare to buy • How to distribute it

  12. Illustrative PE (cont.) • Technical efficiency: Should we invest in drug A or drug B • Allocative efficiency: Should we allocate resources to disease A or B or even to healthcare or education Practical question: If you, as the MoH of DRD, was given a healthcare budget of DRD$50 billion … Knowing that there is shortfall of DRD$20 billion … How will you allocate the money? Will you rather invest in cheaper lower quality drugs just to make sure everybody gets access to some form of medicine, or …

  13. The theory of pe DECISION MAKING MODEL TO ALLOCATE SCARCE HEALTHCARE RESOURCES 1. Clinical Filter 2. Economic Filter 3. Financial Filter 4. Funding Filter 5. Marketing Filter

  14. The theory of pe (cont.) Marketing and Sales vs. Market Access and Reimbursement

  15. The theory of pe (cont.) • Rationing in healthcare • Unfolding role of PE • Tool for access and reimbursement • Rational scarce resource allocation • Cost vs. benefit tradeoff

  16. The theory of pe (cont.) Types of PE analyses: • Cost effectiveness analysis (CEA) • Cost utility analysis (CUA) • Cost benefit analysis (CBA)

  17. The theory of pe (cont.) • Economic modeling: attempting to mimic the natural of complex diseases in mathematical and epidemiological models. • Example: Flu

  18. The theory of pe (cont.) • Example: Flu (cont.)

  19. The practice of pe • Research question: are the new WHO ART treatment guidelines cost effective? • PE model comparing d4T, AZT and TDF in first line treatment • Model structure: Decision tree

  20. More costly 3x Notcost-effective 2x $12,358 1x $6,179 $2,792 Less effective More effective -$856 Less costly Case study 1 Results d4T vs. TDF: Cost: Effectiveness TDF $20,426 17.68x QALY d4T $19,008 17.18 QALY Incremental effect $1,418 0.51 ICER = $2,792

  21. More costly 3x Not cost-effective 2x $12,358 1x $6,179 Less effective More effective Less costly Case study 2 • Results AZT vs. TDF Cost: Effectiveness TDF $22,903 17.87x QALY AZT $22,128 17.79 QALY Incremental effect $775 0.08 ICER = $9,161 $9,161 $2,686

  22. ROLE OF CBA • Aimed at financiers of healthcare • Provides ROI answers. Such as: • What is the monetary value of economic benefits compared to the economic costs (the investment)? • What is the Net Present Value of the investment? • When will we reach breakeven?

  23. summary • Think of the Simpson family when confronted with tough healthcare choices • Pharmacoeconomics assist decision makers to allocate scarce healthcare resources in a rational way • Price is not the same as cost • The best way to help the poor is not to become part of them (A Lincoln)

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