PHARMACO-ECONOMICS: THE COST OF HEALTH
Pharmacoeconomics – A Tool for Pharmacists
PE helps us to make decisions about the use of medicines. Most pharmacoeconomic studies in health care are cost-effectiveness studies set out to demonstrate how to achieve an objective with the least use of resources. This should not be confused with efficiency, which measures how well we use resources in order to obtain the desired outcome.
• PE is used at all stages in the development of medicines by the pharmaceutical industry, when medicines are researched, produced and marketed. Some countries insist on pharmacoeconomic evaluations as part of the licensing process. Most hospital pharmacists use PE to assist with making decisions involving formularies and how medicines can be used in a more cost-effective or cost beneficial manner. Knowledge of health economics coupled with political insight is essential to understand resource allocation and expenditure in a modern health care system. Pharmacists, with their unique knowledge of medicine, are crucial in using pharmacoeconomic analysis to influence expenditure and distribution of resources on medicines.
• The basis of financing secondary care is currently changing. Under “payment by results”, providers of care are paid for each patient spell according to a national tariff, which is based on a national average cost for a particular patient spell. As foundation trusts increase, the number of hospitals that depend on tariff payments for their income also grows. Therefore, using the most efficient methods of working to reduce cost and maximize benefits is becoming increasingly important.
• PE is part of the tool bag pharmacists can use to improve the efficiency of their hospital. In theory, if hospitals improve their efficiency and deliver increased activity the trust will make a profit, which should then be invested in improving health care. In some medical disciplines the medicines element to the overall tariff price can be considerable, and savings on costs of medicines can make the difference between a profit and loss for the trust.
• The application of PE to improve the efficient use of medicines is a key component in this productivity drive. Although the clinical role of the profession is appreciated, it is the role of the pharmacist in advising on medicines expenditure and ensuring economical use of medicines that has increased demand for their services.
• In many directorates the only person with the required knowledge, experience and expertise to manage the medicines budget is the directorate pharmacist. Medicines management technicians are now also seen as essential to the overall improvement in efficiency and reduction on Medicines expenditure. Knowledge of health economics and application of its techniques is essential to today’s pharmacist (Gyllensten et.al., 2014; Beijer et.al., 2002; Leendertse et.al., 2008; Sawyer et.al., 2016)
Pharmacists in Healthcare Cost Minimization
The role of the pharmacist has evolved substantially in recent decades. The traditional activities of the profession primarily focused on the dispensing and supply of medications, while interaction with other healthcare professionals was somewhat limited.
• Cost savings and Avoidance: Cost savings allude to reductions in current spending due to changes in the expense on a patient’s treatment, e.g. switching from intravenous to oral therapy where appropriate. In contrast, cost avoidance refers to an intervention that reduces potential future spending that may have occurred without the intervention. With their unique knowledge of medicines, pharmacists are central figures in decreasing healthcare expenditure through cost savings on medicines and cost avoidance. It has been estimated that 5–6% of all hospitalizations are drug-related Patients affected by an ADE. and the additional costs of patients experiencing ADEs have been estimated to USD 2284–5640 per patient. Medication errors are very costly to healthcare systems, but a large portion of these are preventable (Yach et.al., 2004; Tinetti, 2012)
• Chronic disease management: Chronic diseases are the leading cause of death and disability worldwide, and their management accounts for more than two-thirds of global healthcare expenditure (Bunting et.al., 2008; Khdour et.al., 2009)Pharmacists in primary care have the skills to manage patients with long-term conditions, and this can result in both clinical and cost benefits for a variety of chronic illnesses, such as cardiovascular disease, chronic obstructive pulmonary disease, and diabetes. When compared with usual medical care, one study found that pharmacist-run services made savings of $647,024 by preventing hospital admissions and emergency department (ED) visits (Morello et.al., 2006; Hall et.al., 2011; Cutler, 2018)
• Prevention of Non-adherence Related Hospitalization: Annual costings of medication non-adherence range from US$100 to U$290 billion in the USA, €1.25 billion in Europe and approximately $A7 billion in Australia. Additionally, 10% of hospitalizations in older adults are attributed to medication non-adherence with the typical non-adherent patient requiring three extra medical visits per year, leading to $2000 increased treatment costs per annum. In diabetes, the estimated costs savings associated with improving medication non-adherence range from $661 million to $1.16 billion (Rotta et.al., 2015; Lee et.al., 2006). Studies have shown that pharmacists can improve medication adherence rates, resulting in improved patient outcomes. 20%- 30% of dollars spent in the US health care system have been identified as wasteful. Pharmacists are key players in the pharmaceutical supply chain and are in a position to contribute to the reduction of medication waste. Pharmacists may also assist patients by recommending lower cost brands (Web CMS, 2011; Web Henry J Kaiser Family Foundation, 2012; Bekker et.al., 2018; Usherwood, 2017; Annual Report Of The Boards Of Trustees, 2012)
• Facing the Cost Escalation: Projections indicate health care will account for 20% of the US gross domestic product by 2020 (IMS Institute for Healthcare Informatics, 2015; Wheeler et.al., 2017). And global medicine use with both prescription and over-the-counter (OTC) medicines is increasing, and estimated to reach 4.5 trillion doses in 2020; an increase of 24% from 2015 (Bettington et.al., 2018). As the global population ages, healthcare organizations are challenged with the increasing burden of chronic diseases and polypharmacy among older adults. Pharmacists have a major role in lowering costs by critically reviewing the pharmacotherapy of multimorbid elderly patients. The reduction of inappropriately prescribed medicines not only produces savings in the cost of each individual medicine but also reduces the risk of ADEs that often contribute to prolonged and expensive hospital admissions.
• Reduce burden of Medication Return/ Disposal: The accumulation of unwanted medicines at home can result in accidental ingestion, or lead to confusion, and out-of-date medicines can become toxic or ineffective. Adverse consequences of inappropriate disposal of medicines in landfill and via the sewerage system have been reported, including identity theft from personal information on medicine labels disposed in garbage, and concentrations of medicines detectable in surface and drinking water. The Return Unwanted Medicines Project collected over 704 tons of unwanted medicines in 2016. This included prescription medicines, dose administration aids (which may include multiple medicines), over-the-counter medicines and complementary medicines (Bettington et.al., 2018). The majority of returned medications contained greater than 75% of the original amount issued. Identification of therapeutic groups having higher rates of returns due to medication changes or surplus to requirements. MURs was made available in through the NHS in 2005 and are free to patients, which ensure patients take medicines as prescribed, reduce waste, return and cost involved.
• OTC Selection and Management of Minor Ailments: The number of medicines available without a prescription is growing rapidly; there are currently over 300,000 OTC medicinal products available in the US market alone. Self-medication with OTC products has been shown to contribute to ADRs and hospital admissions. With the advice and recommendations of a community pharmacist, patients can avoid spending money on ineffective or potentially harmful OTC medications; this helps limit further healthcare utilization by patients, such as GP or ED visits. This characteristic feature of community pharmacies provides a platform for more proactive contribution in self-care and managing a range of minor ailments, one of the enhanced population health services to be provided by community pharmacy professionals in UK ( James et.al., 2009; Latif, 2018; NHS, 2005)
• Potential of Hospital Pharmacists: In Africa and Asia, hospital pharmacists have been predominantly limited to dispensary-based roles, meaning that their expertise in medicine management is being underutilized. In many countries, hospital pharmacists have expanded their roles beyond the dispensary, and now routinely provide clinical pharmacy services at ward level, which includes reviewing patients’ medications and advising other healthcare professionals with regard to pharmacotherapy (Ayele et.al., 2018). However, many studies have proven that pharmacist interventions have a positive impact on hospital budgets, but it is difficult to elucidate which interventions were the most cost-effective. Cost-saving interventions often include discontinuing unnecessary medicines, switching to less expensive agents, or altering the route of administration. Several review articles have demonstrated the overall cost-effectiveness of hospital pharmacists’ activities in a wide variety of clinical specialties, such as ED and intensive care unit (ICU) pharmacists, pharmacists managing therapeutic drug monitoring of antibiotics and antiepileptics, and those who specialize in the optimization of antimicrobial therapy (Auta et.al., 2015)
• Medicines Reconciliation and Transitions of Care: An accurate medication list at hospital admission in particular is vital when evaluating patients’ current pharmacotherapy and in determining further treatment options. A cost-effectiveness evaluation indicated that discharge counseling by pharmacists was cost saving in 48% of scenarios, but all scenarios were cost-effective at a low willingness-to-pay value. High-risk elderly patients appeared to benefit most from this service. It has been shown that pharmacists’ involvement at admission and discharge has resulted in reduced medication errors and ADEs, as well as a substantial decrease in the rate of all-cause ED visits and hospital readmissions. Furthermore, pharmacist-led reconciliation has been shown to have the highest expected cost benefits when compared with other reconciliation processes (Dalton et.al., 2017; Sawyer et.al., 2017)
PE evaluation has become an important area of interest to find the optimal therapy at the lowest price as healthcare resources are not easily accessible and affordable to many patients. Numerous drug alternatives and empowered consumers also fuel the need for economic evaluations of pharmaceutical products. In developing countries, the PE can help the poor and middle class to obtain well health care services because many households are below poverty line, unaffordable for private health care. Costs of the medicines are constantly growing. In countries with scarce resources and an ever-growing population with diverse health care needs, an innovative method called, pharmacoeconomic evaluation plays an essential role in determining the delivery of reasonable and cost-effective health services. Applied PE has been lacking as the most vital practice of pharmacy. Understanding the principles, methods, and application of PE, enables pharmacists to make healthier, more informed judgments concerning the use of pharmaceutical goods and services. Specifically, decisions that ultimately represent the best welfares of the patient, the healthcare system, and society. PE applied to any therapeutic area like hospital pharmacy, using a variety of application plans.
1. American Pharmacists Association (APhA), (2008); National Association of Chain Drug Stores Foundation. Medication Therapy Management Services. J Am Pharm Assoc. ; 48(3); 341-53
2. Ambrosioni E. (2001); Pharmacoeconomic challenges in disease management of hypertension. J Hypertens Suppl. ;19(3); S33-40
3. Annual Report Of The Boards Of Trustees, (2012); Available From: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Tren...
4. Ayele AA, Mekuria AB, Tegegn HG, Gebresillassie BM, Mekonnen AB, Erku DA, (2018); Management of minor ailments in a community pharmacy setting: Findings from simulated visits and qualitative study in Gondar town, Ethiopia. PLoS One.;13(1); e0190583
5. Auta A, Maz J, Strickland-Hodge B. (2015); Perceived facilitators to change in hospital pharmacy practice in England. Int J Clin Pharm. ; 37(6); 1068–1075.
6. Beijer HJ, de Blaey CJ. (2002); Hospitalisations caused by adverse drug reactions (ADR): a meta-analysis of observational studies. Pharm World Sci. ; 24(2); 46–54.
7. Bunting BA, Smith BH, Sutherland SE (2008); The Asheville Project: clinical and economic outcomes of a community-based long-term medication therapy management program for hypertension and dyslipidemia. J Am Pharm Assoc (2003) ; 48(1); 23–31.
8. Bekker CL, Gardarsdottir H, Egberts ACG, Bouvy ML, van den Bemt BJF. (2018); Pharmacists' Activities to Reduce Medication Waste: An International Survey. Pharmacy (Basel). ; 6(3); 94.
9. Bettington E, Spinks J, Kelly F, Wheeler AJ (2018); Returning unwanted medicines to pharmacies: prescribing to reduce waste. Aust Prescr ; 41(3) ; 78-81.
10. Babigumira, J.B., Stergachis, A., Choi, H.L. et al. (2014); A Framework for Assessing the Economic Value of Pharmacovigilance in Low- and Middle-Income Countries ; Drug Saf ;37(3); 127-34
11. Chabot I, LeLorier J, Blackstein ME. (2008); The challenge of conducting pharmacoeconomic evaluations in oncology using crossover trials: the example of sunitinib for gastrointestinal stromal tumour. Eur J Cancer. ;44(7); 972-977
12. Catić T, Skrbo S. (2013); Pharmacoeconomic education for pharmacy students in bosnia and herzegovina. Mater Sociomed. ; 25(4); 282-5.
13. Cutler RL, Fernandez-Llimos F, Frommer M, Benrimoj C, Garcia-Cardenas V. (2018); Economic impact of medication non-adherence by disease groups: a systematic review. BMJ Open. ;8(1); e016982.
14. Dalton K, Byrne S. (2017); Role of the pharmacist in reducing healthcare costs: current insights. Integr Pharm Res Pract. ; 6; 37-46
15. Dubois DJ. (2010); Grand challenges in pharmacoeconomics and health outcomes. Front Pharmacol. ; 1:7.
16. Drummond M. (2006); Pharmacoeconomics: friend or foe? Annals of the Rheumatic Diseases ; 65; iii44-iii47.
17. Gyllensten H, Hakkarainen KM, Hägg S, et al. (2014); Economic impact of adverse drug events--a retrospective population-based cohort study of 4970 adults. PLoS One. ;9(3):e92061.
18. Gattani SG, Patil AB, Kushare SS. (2009); Pharmacoeconomics: A Review. Asian Journal of Pharmaceutical and Clinical Research; 2(3); July-September
19. Hall D, Buchanan J, Helms B, et al. (2011); Health care expenditures and therapeutic outcomes of a pharmacist-managed anticoagulation service versus usual medical care. Pharmacotherapy. ;31(7); 686–694.
20. Henry D, Taylor C. (2014); Pharmacoeconomics of Cancer Therapies: Considerations With the Introduction of Biosimilars. Seminars in Oncology; 41(2); Suppl 3, S13-S20
21. IMS Institute for Healthcare Informatics (2015). Global Medicines use in 2020: Outlook and Implications. Available From: https://s3.amazonaws.com/assets.fiercemarkets.net/public/005-LifeScience....
22. James TH, Helms ML, Braund R. (2009); Analysis of medications returned to community pharmacies. Ann Pharmacother. ; 43(10); 1631-1635
23. Jo C. (2014); Cost-of-illness studies: concepts, scopes, and methods. Clin Mol Hepatol; 20(4):327-337
24. Khdour MR, Kidney JC, Smyth BM, McElnay JC. (2009); Clinical pharmacyled disease and medicine management programme for patients with COPD. Br J Clin Pharmacol. ; 68(4); 588–598.
25. Lee JK, Grace KA, Taylor AJ. (2006); Effect of a pharmacy care program on medication adherence and persistence, blood pressure, and low-density lipoprotein cholesterol: a randomized controlled trial. JAMA. ;296(21); 2563–2571.
26. Latif A. (2018); Community pharmacy Medicines Use Review: current challenges. Integr Pharm Res Pract. ; 7; 83-92
27. Leendertse AJ, Egberts AC, Stoker LJ, van den Bemt PM. (2008); Frequency of and risk factors for preventable medication-related hospital admissions in the Netherlands. Arch Intern Med. ; 168(17); 1890–1896.
28. Morello CM, Zadvorny EB, Cording MA, Suemoto RT, Skog J, Harari A. (2006); Development and clinical outcomes of pharmacist-managed diabetes care clinics. Am J Health Syst Pharm. ;63(14); 1325–1331.
29. Milne RJ. (1994); Evaluation of the pharmacoeconomic literature. Pharmacoeconomics. ;6(4); 337-45.
30. McGhan WF, Rowland CR, Bootman JL. (1978); Cost-benefit and cost-effectiveness: Methodologies for evaluating innovative pharmaceutical services. Am J Hosp Pharm. ; 35(2); 133–40.
31. NHS (2005). United-Kingdom Department of Health: Choosing health through pharmacy–a programme for pharmaceutical public health 2005–2015
32. Parkis R. Pharmacoeconomics - the importance for pharmacists. The Pharmaceutical Journal FEB 2006.
33. Rotta I, Salgado TM, Silva ML, Correr CJ, Fernandez-Llimos F. (2015); Effectiveness of clinical pharmacy services: an overview of systematic reviews (2000-2010) Int J Clin Pharm. ; 37(5); 687–697.
34. Sawyer RT, Odom JM, Jennings J, Orr J, Cass AL. (2016); Discharge medication reconciliation by pharmacists to improve transitions following hospitalization (DEPTH); GHS Proc ; 1(1); 32-37
35. Systems for Improved Access to Pharmaceuticals and Services (SIAPS) and USAID. Applying Principles of Pharmacoeconomics to Improve Medical Product Selection and Use in Low- and Middle-income Countries: Trainer’s Guide. http://siapsprogram.org/ August 2017.
36. Surji KM. (2015); Fundamental Understanding of Pharmacoeconomics as an Innovative Concept within the Modern Clinical Pharmacy in Today’s Healthcare System American Journal of Pharmacy and Health Research ; 3(5) ISSN: 2321–3647
37. TRASK L. Chapter 1. Pharmacoeconomics: Principles, Methods, and Applications. In: DiPiro JT, Talbert RL, Yee GC, Matzke GR, Wells BG, Posey L. eds. Pharmacotherapy: A Pathophysiologic Approach, 8e New York, NY: McGraw-Hill; 2011. http://accesspharmacy.mhmedical.com/content.aspx?bookid=462§ionid=41.... Accessed January 25, 2019.
38. Telser H, Fischer B, Leukert K, Vaterlaus S. Healthcare expenditure and illness-related costs. In InterPharmaPh Polynomics. Web Interpharma (Association of research-based pharmaceutical companies in Switzerland, Basel) September 2011. Available From: https://www.interpharma.ch/sites/default/files/healthcare_expenditure_il...
39. Tinetti ME, Fried TR, Boyd CM. (2012); Designing health care for the most common chronic condition: multimorbidity. JAMA. ; 307(23); 2493–2494.
40. Usherwood T. (2017); Encouraging adherence to long-term medication. Aust Prescr. ; 40(4); 147-150.
41. Vogenberg FR, Santilli J. (2018); Healthcare Trends for 2018. Am Health Drug Benefits. ; 11(1); 48-54.
42. Waning B, Montagne M. Chapter 9. Principles of Pharmacoeconomics. In: Brenda Waning, Michael Montagne. Pharmacoepidemiology: Principles and Practice, published by McGraw-Hill, 2001
43. National Library of Canada (1997). Canadian Coordinating Office for Health Technology Assessment. Guidelines For Economic Evaluation Of Pharmaceuticals 2nd Edition: Canada Available From: https://www.cadth.ca/media/pdf/peg_e.pdf
44. Web Centers for Medicare & Medicaid Service (CMS). National Health Expenditure Data. Available From: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Tren...
45. Web Pharmadost (2017); Pharmacoeconomics: Evaluation methods Available From: https://pharmadost.info/pharmacoeconomics-evaluation-methods/
46. Web Centers for Medicare and Medicaid Services (CMS). NHE Projections 2010–2020. Washington, DC: US Department of Health and Human Services; 2011
47. Web Henry J Kaiser Family Foundation (2012); Health care costs: a primer. Available from: http:www.kff.org/insurance/upload/7670-7603.pdf.
48. Wheeler AJ, Spinks J, Bettington E, Kelly F. (2017); Evaluation of the National Return of unwanted medicines (RUM) program in Australia: a study protocol. J Pharm Policy Pract; 10; 38.
49. Yach D, Hawkes C, Gould CL, Hofman KJ. (2004); The global burden of chronic diseases: overcoming impediments to prevention and control. JAMA. ; 291(21); 2616–2622.
NOW YOU CAN ALSO PUBLISH YOUR ARTICLE ONLINE.
SUBMIT YOUR ARTICLE/PROJECT AT email@example.com
FIND OUT MORE ARTICLES AT OUR DATABASE