INTRODUCTION yet. The increase in cost ofINTRODUCTION yet. The increase in cost of



is new concept that is being practiced only from past few decades.
Healtheconomics concentrates in treating the population with more efficient
drugs with less cost. This is the one which started the concept of
Pharmacoeconomics which considers both the cost and the benefit of a therapy to
be used in the population. Pharmacoeconomics is aimed to balance with both cost
and ethics at the same time, which is not completely developed yet. The
increase in cost of the treatment and emergence of number of efficient drugs
has lead to more research in Pharmacoeconomics. Pharmaceutical companies are
doing the Pharmacoeconomic studies as a part of their Post marketing
Surveillance to assess the efficacy along with cost effectiveness of the drug (Rychlik,

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increase in the disease burden globally has alarmed the health community to
move towards better treatments not only in terms of efficacy and safety also in
terms of cost.  Many new drugs are
introduced to the market for various diseases like cancer, Neuropsychological
disorders, HIV etc.  But the drawback
with these drugs is they are not cost effective which is keeping them away from
common man.  So it is not only necessary
to have an effective and safe drug but also it is necessary to have a cost
effective drugs in the market to reduce the disease incidence globally. Proper
planning and application of pharmacoeconomics from the first day of drug
development is necessary to attain more efficient drugs with lesser costs.



are different methods used to evaluate pharmacoeconomics of drugs and devices.
The most common method used is Cost effectiveness analysis, Cost benefit
analysis. Cost utility analysis, cost minimization analysis. These commonly
consider the factors like cost incurred for the treatment, efficacy of the
drug, quality of life etc.

The Cost minimization
analysis is the most simpler among
all. This method does not consider the efficacy or quality of life parameters.
The treatment with less cost should be given to patients according to this
analysis. This analysis can be used only in conditions where in the outcomes
are same for both the treatments, the difference lies only in terms of

The Cost effectiveness
analysis is most commonly employed in deciding
the type of treatment to be used. In this analysis the efficacies of different
treatments are considered in numerator and the costs of the treatment are
considered in the denominator. The difference is measured to decide to go ahead
with which treatment. The efficacy parameters can be of different types
depending on the disease type. For example in case of cancer therapies the
number of years of survival or relapse free years of survival (Hillner, 1998)
is the common parameters taken in the numerator in case of cancer patients. The
major disadvantage with this analysis is that if efficacy parameters are
associated with the two treatments are not similar then it is difficult analyze
the cost-effective analysis.

The cost Utility analysis
is more specified type of cost effective
analysis. This analysis considers Quality adjusted life years (QALY) as its
efficacy parameter. This method is most commonly used in Cancer. In this method
QALY is compared to that of the cost incurred to treat the cancer patients. So
this method not only measures Quantity i.e., number of years of survival but
also measures the Quality of life in those years lived. These studies are of
utmost importance in newer treatments which do not increase the years of survival
but aimed in increasing the Quality of life in cancer.

The Cost benefit
analysis is the least preferred type of
Pharmacoeconomic analysis. This considers both the cost and efficacy in
monetary terms to assess the cost benefit ratio between the two. It is very
difficult to convert the efficacy parameter like number of years lived by a
person in to monitory terms. This makes it a less popular method in analyzing
Pharmacoeconomics (Borghi, 2007).


are many international guidelines, which are framed for proper Pharmacoeconomic
practice globally. Most popular among these are ISPOR, and NICE. These two are
advisory in nature and work independently. The ISPOR deals the issues related
to Pharmacoeconomics globally, where as the NICE work as advisory committee for

(International society for Pharmacoeconomic and outcome research) is a
non-profit organization dealing with both Pharmacoeconomics and outcome
research. It has about 90 member countries including India. This is an
independent committee which deals with the issues in Pharmacoeconomics. It
provides a forum for discussion about Pharmacoeconomics among different
disciplines like healthcare sector, patients, regulators etc. It guides in framing
the policy or regulations in conduct of Pharmacoeconomic studies in its member
countries.  Among the most of the studies
discussed in ISPOR forum in relation to cancer the Cost-Utility study is used
to measure Healtheconomics (ISPOR, 2008).


is an advisory committee for National health services of UK. It takes in to
consideration of both efficacy and cost of the treatment to be used in NHS. The
NICE plays an important role in approval of new drugs for use in NHS. In case
of Cancer it compares the number of years of Quality adjusted years to that of
cost incurred to treat the patients.
















Savient Pharmaceutical Inc. has done Pharmacoeconomic study on drugs used for
weight gain in cancer patients. This is a cost effective study to analyze the
cost effectiveness of Oxandrolone with that of Megestrol Acetate or with
Placebo. Dr. Hatoum and team have conducted this study in Chicago.

study was done to understand the cost savings that can be done during treating
weight loss in cancer patients. The study consists of three arms. First arm
treated with the Oxandrolone, second arm treated with Megestrol where as the
third arm is treated with Placebo for a duration of four months. The cost for
the treatment taken for analysis includes the cost of the drug, Hospitalization
cost and cost taken for long term care are taken. The efficacy parameter taken
to compare these treatments was change in Body Mass Index (BMI).

four months of the study it was found that the cost incurred for treatment of
weight loss with Oxandrolone was $8,727, Mejestrol is $12,668 and for placebo
is $14,937 taking in to consideration of even Hospitalization cost. The
efficacy parameter taken is the change in the BMI after treatment. The number
of lives saved is 3.18, 4.72, and 1.54 respectively for Oxandrolone, Mejestrol
and placebo per 1000 patients. 

the above study clearly shows that the Oxandrolone is more Cost Effective than
other treatments taken. The yearly burden due to cancer is more than 150 billion
dollars of which 40 to 50% of economic burden is due to weight loss leading to
hospitalization in US. This Pharmacoeconomic model is very useful in predicting
the economic consequences of treatment of weight loss in cancer.



treatment of weight loss accounts for about 40-50% of the cost incurred to
treat cancer. This is a huge economic burden for the country. The above study
discussed is a cost effective study done to determine treatment which is has
both efficacy and also economic for treating weight loss in Cancer patients.
The study is well planned in terms of design. It has even included the Placebo
in its study to remove the placebo effect. This Pharmacoeconomic model can be
applied to even in other diseases to assess the most economic treatment.

 Though the Pharmacoeconomic model used in this
case is very well planned in terms of study design, it has drawback in
selection of efficacy and safety parameter. This study considers only the
change in Basal Metabolic Rate but fails to realize that the major problem with
cancer patients is Quality adjusted life years. Treatment which has effect on
BMI alone cannot be considered to efficient treatment. Even the improvement in
QALY is necessary for a treatment to be called efficient in case of Cancer. So
the study should compare the cost with that of QALY of the cancer patients
treated for weight loss. The study is conducted only for a period of four
months that is too small period in assessing the cost effectiveness of the
drugs used in Cancer.

the study is well designed but lacks in some efficacy and safety parameters
like QALY. The study conducted is Cost effectiveness study. The Cost utility
study would be more beneficial in conditions like Cancer where both efficacy
and Quality of life has equal importance. The Pharmacoeconomic model used can
be made robust by making little modification as mentioned above which can
really reduce the economic burden to the nation.


is gaining increased importance globally. It is still primitive in developing
countries like India. It is really necessary to explore in to more
Pharmacoeconomic models which can decrease the economic burden without
compromising the efficacy and safety of treatments. The present methods used
have to be modified in to better models. The organizations like ISPOR and NICE
are working really hard towards this still need complete support from both the
Pharmaceutical Industry and Government body.














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