In most countries around the world, health care costs have increased faster than costs in any other sector of the economy. This is most notably because of a rise in life expectancy and quality of life, chronic diseases, discovery of new diseases, new treatments, new technologies, and the development of the pharmaceutical industry. Accordingly, nowadays it is a challenge for healthcare professionals to provide uncompromising quality healthcare while making an effort to control costs and demonstrate pharmacoeconomic value – that is, a balance of economic, humanistic and clinical outcomes.
Pharmacoeconomics is the discipline of placing a value on drug therapy. As a sub discipline of health economics, pharmacoeconomics analyzes the costs and benefits of pharmaceutical products and services to healthcare systems and society as a whole. It aims to determine which alternative produces the best outcome with respect to the resource invested and it ultimately represents the best interests of the patient, the healthcare system, and society as a whole. In practice this is accomplished through the quantification of the value of pharmacotherapy by balancing costs and outcomes. Pharmacoeconomic analyses are becoming a frequently used criterion for decision making in modern health care policy due to limited financial resources.
Pharmacoeconomic analysis compares the outcomes of alternative drug therapies and other medical interventions. These tools can be separated into two distinct general categories of evaluation techniques. The first are the economic tools which include cost-benefit, cost-effectiveness, cost-minimization and cost utility. The second group includes the more humanistic spheres of analysis such as quality of life, patient preferences, and patient satisfaction. All economic methods provide means to compare competing treatment options, however, measurement of outcomes and expression of results are different. Notably, cost-utility is the most versatile and sophisticated analysis tool within the spare of economics tools of pharmacoeconomic analysis as it integrates the patient benefit (patient value) conferred by a drug both in terms of an improvement in length and/or quality of life. In addition it also encompasses the costs realized for that benefit, as well as the dollars returned to patients and society from the use of that drug. However, an issue that arises with cost-utility analysis is that it is generally not comparable to another cost-utility analysis because of the lack of standardized input variables. In typical scenarios these inputs include things such as costs, cost perspective, quality-of-life measurement instruments, quality-of-life respondents, and discounting. In response to this issue, there has been a rapid development and increased use of a novel value-based medicine (VBM) cost-utility analysis. The VBM method of analysis standardizes these aforementioned parameters so that one VBM analysis is comparable to another. As a result, there is a highly rational methodology that makes it possible for both providers and patients to easily compare the patient value and financial value gains associated with the use of a pharmaceutical agent.
It is important to note that there are potential issues with pharmacoeconomics which may arise in practice. First of all, the analysis itself is often prone to bias. This includes problems with clinical trial data transferability, selective reporting of final results, and the choice of comparative therapy. Also, implementing the study results is not an automatic process. This is mostly due to the management and decision making bodies as not all committees for drug reimbursement have a pharmacoeconomist. This can also occur because of drug policies since the drug may be proven to be cost-effective but for some reason not reimbursed. In most cases there is a problem with budget impact issues, shifting from payer to hospital budget, or simply that the drug is too expensive. Establishing guidelines and standards of practice, training professionals of pharmacoeconomics for healthcare practitioners, government officials and private sector executives currently continues to be the one of the main challenges of pharmacoeconomics.
The overarching goal of pharmacoeconomics is to contribute to the rational use of drugs by incorporating cost in the questions on safety, efficacy and quality of different medical therapies, and to search for a better relationship with the costs and results. Greater use of pharmacoeconomic evaluation should assist clinical staff and administrators to make better decisions regarding medical products and services, including effective formulary management, individual patient treatment, medication guidelines, and resource allocation.
Quality healthcare must above all demonstrate pharmacoeconomic value – a balance of economic, humanistic and clinical outcomes. Today, the appraisal of healthcare goods and services extends beyond evaluations of safety and efficacy and considers the economic impact of these goods and services on the cost of healthcare. Due to the increased pressures and queuing towards healthcare budgets, the future potential investments are becoming increasingly important. Quantifying the value of drugs through pharmacoeconomics is a prerequisite for new therapies in dermatology due to the new and expanding biologics, the new state-of-the-art diagnostics and devices.