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Understanding the Role of Pharmacoeconomics in Healthcare

Pharmaceuticals account for at least 10 percent of total healthcare expenditures in all countries around the globe. In some countries they can account for over 30 percent of healthcare costs. Are they worth it? 

Pharmacoeconomics is the branch of specialty pharmacy that deals with the financial implications of medication use, but its reach extends far beyond pharmacy practice. Analyzing the costs and benefits of a particular intervention is critical in maximizing the value to patients and society in a world where resources are becoming increasingly scarce. It can also determine whether or not a patient might adhere to a treatment plan. Canadians deal with some of the highest medication costs in the world, and while many have coverage through their employers, some provincial and territorial public plans include very high co-pays and deductibles. As a result, 1 in 10 Canadians will not adhere to a prescription due to cost-related issues.

When analyzing costs and benefits, generally, new options tend to cost more than the standard care options, but they usually provide added benefits. The cost-benefit analysis that pharmacoeconomics provides can assist decision-makers in selecting treatment strategies that allow optimum allocation of resources.

The older method of selecting a medication based on lowest price per dose is obsolete, because it doesn’t take into account costs such as added treatments needed to align outcomes to those gained from a newer drug, any added necessary costs for monitoring and lab tests, or costs for extra treatment for adverse effects.

The first priority of pharmacoeconomics is assessing the comparative effectiveness of the treatment options – this requires clinicians to stay up to date with the results of current research. It is also important to keep in mind the different endpoints the research evaluates. Research into efficacy assesses whether a drug works (usually compared with a placebo); research into effectiveness looks at how a drug works in actual practice (often compared with other treatments).  

Recent developments in pharmacoeconomics demonstrate how comparative effectiveness research (CER) will play an increasingly prominent role in healthcare. In the future, CER will impact the day-to-day practice of medicine by providing clinicians with a better idea of which medication to select based on patient-specific criteria. For example, we are starting to see data that suggests the use of a moderate or high efficacy treatment that initially seems to be more costly can actually be cost-effective because of the way it changes the outcome.

The Bottom Line

Incorporating the use of economic analyses in the practice of medicine has become increasingly commonplace in recent years. Driven by a combination of factors including changes to reimbursement incentives and to the clinical practice of medicine, pharmacoeconomic analysis has the potential to answer questions related to the delivery of healthcare in a fiscally responsible manner.

Staying Current

So where can a clinician acquire the necessary information to remain current? A great place to start is with the MDBriefCase programs. Join thousands of medical professionals around the world who trust MDBriefCase for their continuing medical education and professional development. 

Explore a full range of pharmacoeconomics courses including on-demand webinars, expert exchange videos, and continuing medical education modules here

[QUIZ] Want to test your pharmacoeconomics knowledge? Take a 3-minute quiz now. 

For healthcare professionals in the Middle East – access the quiz

For healthcare professionals in Canada – access the quiz.