HEALTH TECHNOLOGY ASSESSMENT

TOPIC:
PHARMACOECONOMICS
AS APPLIED TO VARIOUS
PHARMACY
SETTING:
Pharmacists in real world setting applications and impact of HTA: Hospital Setting

OBJECTIVE:
Applying HTA-integrated Pharmacoeconomics in real world pharmacy settings

GROUP 2 MEMBERS: Cayabyab, Krisha Mae

De Guzman, Benjamin

Dela Cruz, Jessica

Fernandez, Joyce Camille

Lumayna, Jaya Lyn

Mendoza, Clark

Paras, Maryelle Ann

Ramos, Pevilyn

Repato, Leylu
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INSTRUCTOR: Ms. Jennybelle A. Bugayong RPh, MPH

TOPIC OUTLINE:

What is Pharmacoeconomics

Types of Pharmacoeconomics in Hospital Setting

Challenges in Applying Pharmacoeconomics at the Hospital Level (barriers

and potential action)

Principles of Pharmacoeconomics in Hospital Practice

Applications of Pharmacoeconomic Principles to Hospital Pharmacy

Practice (Examples)

Application of Pharmacoeconomics in Hospital Pharmacy

Impact of Health Technology Assessment in a hospital setting

Impact of HTA to Hospital Pharmacy

What is Pharmacoeconomics
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Pharmacoeconomics (PE) is an established discipline of Health
Economics. It is a scientific discipline that compares the value of one
pharmaceutical agent, service or program to another in an attempt to make
conclusion about the preferred choice from payer, society or an individual
perspective.

It is a branch of health economics which deals with identifying, measuring,

and comparing the costs and consequences of pharmaceutical products and
services.

It helps in forming an economic relationship which combines the drug

research, its production and distribution, storage, pricing, and further use by the
people.

Pharmacoeconomics can be of tremendous help in decision-making when

evaluating the affordability of and access to the right medication to the right
patient at the right time when comparing two drugs in the same therapeutic class
of drugs.

It uses cost-benefit, cost-effectiveness, cost-minimization, cost-of-illness

and cost-utility analyses to compare pharmaceutical products and treatment
strategies.

This helps in establishing accountability that the claims by a manufacturer

regarding a drug are justified. Proper application of pharmacoeconomics will
allow the pharmacy practitioners and administrators to make better and more
informed decisions regarding products and services they provide.

Types of Pharmacoeconomics in Hospital Setting

COST-MINIMIZATION ANALYSIS (CMA)

● Analysis to identify the most economical option when efficacy of

comparison is similar.
● In another definition, CMA or cost-minimization analysis is used when the
benefits of two or more interventions being compared are assumed to be
equivalent or similar. Meaning, this analysis deals or it focuses only on the
cost alone.
● One of its advantages is that it is easy to conduct.

COST-EFFECTIVENESS ANALYSIS (CEA)

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● Analysis to identify the most economical option when efficacy of
comparison is not similar. Outcomes are measured as increased
effectiveness delivered for each money invested.
● This type of analysis is used to compare health interventions that have
different outcomes. It examines both the cost and health outcomes of one
or more interventions.
● CEA can be useful for understanding how much an intervention may cost
compared to an alternative intervention. And the results of this analysisn
are usually presented in thw form of ratio.

COST-BENEFIT ANALYSIS (CBA)

● Analysis to identify the most economical option when efficacy is not

similar like CEA.
● It seeks monetary value on both the inputs and outputs.
● It is used to measure the benefits of a decision such as in determination of
budget which will be given to a certain project or program in the hospital.

COST-UTILITY ANALYSIS (CUA)

● Analysis to identify the particular option that will deliver the best utilization
of existing resources. Outcomes are measured in terms of utility measures
such as Quality Adjusted Life Years for each money invested.
● It is a method of choice when quality of life is an important outcome.
● It is also the ideal method when interventions affect both morbidity and
mortality
● It measures effectiveness as life-years saved.
● It is usually based on QALY
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Challenges in Applying Pharmacoeconomics at the Hospital Level

(barriers and potential action)

● Healthcare outcomes are multidimensional that include economic, humanistic

and clinical outcomes. Hospitals administrators, decision makers and third-party
payers focus mostly on the economic outcome
● Patients on the other hand focus on the humanistic outcomes of treatment,
whereas clinicians are concerned the most with clinical outcomes of therapy.
● Any healthcare facility/organization should consider and measure the three most
important elements of a successful healthcare system: cost, access and quality
of care and health services provided to each single patient to ensure prime
patient care.

PE evaluations, develop a cost effective guidelines for a particular disease and

identify the cost per quality adjusted year of life extended by a drug

[1]. PE introduces various strategies to ensure the continued provision of

innovative and affordable drugs to gain greater value of money from
pharmaceutical expenditure

[2]. It analyzes costs and benefits of improving patterns of resource allocation

[3]. Efficiency is the key concept of PE.

POSSIBLE CHALLENGES IN APPLYING PE AT A HOSPITAL LEVEL

1. Lack of nationally recognized body responsible for commissioning and

funding of pharmacoeconomic.
2. Lack of national guidelines on Health Technology Assessment (HTA).
3. Lack of local PE guidelines and clearly defined set of criteria and
standards to guide decision-making.
4. PE discipline is relatively new compared to other concepts and sciences.
5. PE is a new concept to most healthcare providers and interprets the
results of the analysis (CEA).
6. Absence of national/local registry containing patient demographics,
clinical data, and socioeconomic status. This significantly negatively
impacts the number of local pharmacoeconomics studies.
7. Absence of national detailed cost database/claims.
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8. Lack of funding for PE research and resources used to perform and
build economic models.
9. Lack of applicability of pharmacoeconomic analysis at hospitals
10. Barriers to use economic evaluations:

BARRIERS USE TO ECONOMIC EVALUATION

a. It is assumed in economic evaluation to use resources from the

substituted alternatives to pay for the new technology. Still, financial
budgets in health care are fixed, and it is difficult to shift from one
alternative to another or between different health care sectors. Short term
savings were only a fraction of the anticipated savings in the long run
b. National policies can restrict the use of economic evaluation
c. Amongst clinicians and pharmacists, evidence of effectiveness has been
found to be more critical than cost-effectiveness. Clinicians are mainly
interested in the effect of a new treatment than how much it costs.
d. Ethical and moral issues in rationing care based on economic evaluation.
Clinicians typically base their decisions on the individual patient and
hesitate to take the population perspective employed in economic
evaluation.
e. Decisions often need to be made quickly in reaction to immediate
problems, while economic evaluations required some time to become
available..

STAKEHOLDERS AND THEIR POTENTIAL ACTION

Hospital leadership: Hospital leadership strategy should optimize the allocation

of resources and budget management. Their aim should be to provide the best
care to patients while saving money.

Pharmacy and therapeutic committee: The pharmacy and therapeutics

committee (P&T) is responsible for many tasks including:

● HOSPITAL FORMULARY
○ Careful evaluation of new drugs prior to addition to the hospital
formulary.
○ Proper selection of therapy compared to drugs available.
○ Consider biosimilar and generics.
○ Regular formulary review for possible delisting
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○ Sub-committees may be needed to evaluate high-tech or
expensive specialty drugs
● EDUCATION
○ Conduct awareness programs for healthcare professionals and
executives
○ More training and education to decision-makers should be
conducted to facilitate the use of pharmacoeconomics
● GUIDELINES
○ Development/approval of pharmacoeconomic guidelines that
provide guidance on the key concepts to consider or use when
conducting pharmacoeconomic analysis as part of the evaluation
process for listing / delisting a drug in/out of the hospital
formulary.
○ Development/approval of disease management guidelines.
○ Ensure guidelines and policy implementation.
○
● PE APPLICATION
○ Ensure involvement of qualified and experienced staff in PE
application.
○ Identify consumers of PE.
● VALUE VERSUS COST
○ Establish/approve the concept of value versus cost concept

Pharmacy/pharmacoeconomic center:

PE is a pharmacy subspecialty

Either working under the umbrella of the pharmacy department or drug policy
and economic center if available.

The key points to enhance the application of PE are:

1- Awareness:

● Create an awareness plan about PE to practitioners and executives

● Conduct workshops, seminars, conferences.

2- Qualifications & experience:

● Recruitment of healthcare professionals with pharmacoeconomics

expertise
● Encourage/support pharmacists to enroll in PE programs/degrees.
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● Ensure qualification and experience of staff applying PE while
evaluating therapy.
● Apply the “train the trainers” concept.

3- Research:

● Conduct PE research funded by institutions to avoid bias.

● Request for research fund from hospital leaders.
● More investments in the collection of epidemiological and demographic
data, plus data on clinical practice patterns, resource use, costs, and
health state evaluation is required.

4- Drug evaluation:

● Incorporate PE concept to clinical evaluation of medicines

● Apply pharmacoeconomics to new drugs evaluation
● Create guidelines for proper drug evaluation.

5- Drug utilization monitoring:

● Implement and adhere to clinical guidelines.

● Ensure staff access to policies and guidelines.
● Capture and report deviation to leadership.
● Implement quality projects to minimize waste.

Principles of Pharmacoeconomics
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The ever-expanding technology base and escalating expenditures for health
care have led to the question of whether quality health care is being delivered
efficiently and effectively. The issue of quality has led health care
professionals and institutions to search for new means of delivering care and
improved methods of measuring the impact and outcomes of care.
Pharmacoeconomics is one such means that has gained significant attention
from payors and providers.

Pharmacoeconomics, as a discipline, should not be used solely for the

justification of positions and services.

The principles of pharmacoeconomics should be used to truly measure the value

and outcomes of services to both the systems in which they are applied and
ultimately its patients.

Many pharmacoeconomic analyses have focused on the costs and benefits of

pharmaceuticalproducts, but studies of the outcomes of pharmaceutical services
are rare. Such studies, evaluating outcomes of services, are rare because of
many reasons:

(1) they are more costly,

(2) such studies are time-consuming,

(3) there are no established standards of application, and

(4) many providers focus on cost rather than outcomes.

Presumably hospital pharmacists can use the principles of pharmacoeconomics

to transcend acquisition costs and benefits and traditional product-oriented
information by focusing on pharmacy services as product of a department.

Applications of Pharmacoeconomic Principles to Hospital Pharmacy

Practice (Examples)

EXAMPLE 1: FORMULARY SYSTEM

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PURPOSES: The formulary is defined as a system in which consensus by medical
and pharmacy staff for approved drug therapies for use in the institution is achieved
through a formal medical staff committee

PE EVALUATION: Pharmacy and Therapeutics Committee (P & T). The Committee’s

deliberations include a spectrum of economic analysis and relative therapeutic merit
considerations

EXAMPLE 2: HOSPITAL PHARMACY DEPARTMENT EVALIATING THE VALUE OF ITS

DRUG INFORMATION SERVICE TO THE HOSPITAL

PURPOSES: To determine those values in terms of the strategic plan for the Drug
Information program and to provide feedback regarding the outcomes of formulary
decisions.

PE EVALUATION: (1) the consumers of the service or the target customers, and (2) the
point of view from which the analysis is being performed.

EXAMPLE 3: EVALUATING THE SERVICE PERFORMED BY THE DRUG INFORMATION

SERVICE

PE EVALUATION: A cost-benefit analysis could be performed with the outcome being

the impact of the service on formulary decisions. The impact might include whether
materials provided to the committee making formulary decisions (usually the PTC) are
used effectively, whether services are performed in a timely manner, etc The analysis
might show that it is only necessary to have a limited number of pharmacists perform
the primary literature analysis and evaluation for the P & T committee as opposed to a
multitude of pharmacists, or the analysis might show that indeed the reports generated
for the committee are necessary and effective.
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Application of Pharmacoeconomics in the Development of Hospital Pharmacy
Services

* One means of applying pharmacoeconomics is by means of using some of the

guidelines for conducting pharmacoeconomic research.

Example: Eisenberg - described the dimensions of clinical economics from

which a list of questions is generated to help guide the economic evaluation.

* One more way of applications is that borrowing the concepts of marketing

Marketing - the analysis, planning, implementation, and control of carefully

formulated programs designed to bring about voluntary exchange of values with the
target market for the purpose of achieving organizational objectives.

Marketing Audit -a systematic, unbiased, evaluative overview of an

organization's marketing situations and activities. These are the purpose (1) Identify
and anticipate problems of the department and it’s services, (2) discover opportunities
for expansion services and/or determine which services can be deleted, (3) reevaluate
the goals and objectives of the department, (4) aid in developing strategic plan, and (5)
suggest new or different ways to organize and implement department programs and
services.

APPLICATION OF PHARMACOECONOMIC IN HOSPITAL PHARMACY

RESEARCH USING THE FOUR TYPES OF ANALYSIS

COST - MINIMISATION ANALYSIS (CMA)

● Unique practical applications

● Choosing generics of the same medicine; selecting medicine from the same
class; selecting dispensing software for pharmacy.

COST - EFFECTIVENESS ANALYSIS (CEA) OR COST - BENEFIT ANALYSIS (CBA)

● Unique practical applications

● Choosing a model of care such as hospital admissions versus day care
admissions.
● Choosing of medicine with same outcome: Atorvastatin versus Rosuvastatin
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COST - UTILITY ANALYSIS (CUA)

● Unique practical applications

● Allocation of resources across various clinical areas such as funding a smoking
cessation program or allocating resources for staff lounge.
● Choosing an antiemetic for hospital formulary or new analgesic for chronic pain.

Applying Pharmacoeconomics in Hospital Pharmacy

Poor compliance to antibiotic prescribing guidelines at your hospital is a chronic

problem. As such, there is a plan to implement an electronic decision support system
to streamline restricted antibiotics approval prior to prescribing in an attempt to
improve physician’s compliance to the prescribing guidelines. You are the project
pharmacist and the hospital administrator wants to know if the cost of implementing
an electronic decision support is justifiable?

- Using the hospital case study presented, the overall aim of the intervention is to
improve a physician’s concordance to the prescribing guidelines and therefore
the scope is focused on concordance rather than clinical outcomes.
- The specific aim of the electronic decision support is reasonably narrow and a societal
perspective may not be suitable for this evaluation regardless of whether the hospital
is funded from public or from private resources. However, if the same system is
found to be economically feasible and there is a will to expand the system to a
number of public hospitals, then a societal perspective will be worth exploring.
- Considering the example of electronic decision support from the presented case, CEA
as well as CBA are equally applicable in this scenario. Nevertheless, CBA will simply
provide the net benefit ratio of the intervention and will not be able to summarize
the relative increase in guideline adoption. Conversely, CEA will be able to provide
the relative increase in guideline adoption as an incremental cost-effectiveness ratio
with varying degrees of physicians’ concordance with the guidelines, and hence this
would be more applicable.
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Relevance of Pharmacoeconomics to Pharmacy Practice Research

Economic analysis of medicines prior to inclusion in hospital formulary,

evaluation of unique pharmacy services, estimating willingness to pay for
pharmacy services by consumers and cost consequences of various pharmacy
models are few examples in this area. The most frequent application of
Pharmacoeconomics methodology in the pharmacy discipline is the evaluation
of medicines to determine their relative cost-effectiveness to similar agents that
are already available in the market.

Impact of Health Technology Assessment in hospital setting

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Health technology assessment (HTA) uses a multidisciplinary approach to answer
relevant questions regarding the safety, efficacy, effectiveness and cost-
effectiveness of health technologies. There is growing interest in implementing HTA
methods at the hospital level because it could facilitate decision-making regarding
acquisition, implementation or discontinuation of technologies or interventions within
the hospital.

Hospital based HTA approach allows a better measurement of the real impact of health
technology in the organizational context in which it is or will be used, which comes from
the encounter with the clinical engineering activities, through their actions of healthcare
technology management, that call for best solutions for the technology element in
health.

In 2007, the Interest Sub-Group Hospital Based HTA of Health Technology

Assessment International (HTAi) focused on hospital based HTA, agreed to adopt
a conceptual model in order to reduce the variability of organizational solutions
about HTA in hospitals.

Four different approaches/initiatives were described:

1) ambassador model,

2) mini-HTA,

3) internal committee, and

4) HTA unit.

The ambassador model

Ambassador model is a special program in which physicians recognized as opinion

leaders act as "ambassadors" of the HTA message focused only on clinical practice. It
seeks to promote changes in practice through a specific HTA dissemination approach.
In this approach, interested clinicians who are recognized as opinion leaders play the
role of ambassadors of the HTA message within healthcare organizations at regional
and local levels.

Mini-HTA
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Mini HTA is a dynamic and flexible tool to support decision making by hospital
administrators locally and regionally, in contemplating the introduction of new
technology. It is a management and decision support tool that consists of questions
about the technology, the patient, the organization, and the financial aspects. The mini-
HTA is usually done by a single professional who often participates in the assessment
process, collecting data at the hospital level in order to inform decision-makers.

The internal committee

Internal committees are multidisciplinary groups, representing different perspectives

that perform the assessment of evidence generating useful recommendations for
the entire hospital structure. There is no single model in terms of composition
and functions, however, trends are observed: as the strategic committees and ad
hoc committees. The ad hoc committee is appointed by the strategic committee
and organized to do the HTA work. This committee will be dissolved as soon as the
finalization of the HTA report for the technology in question.

In the case of strategic committees, their members usually include representatives

of the medical staff, nursing, finance, planning, procurement, infrastructure,
bioengineering, ethics committee, quality and patient representatives. Obviously, the
composition in terms of number, type of profile and decision-level varies between
hospitals.When it comes to ad hoc committees, their composition includes possibly
the professional who requested the technology and others with training in research
techniques and clinical and economic analysis.

The HTA unit

HTA units are formal in-house structures compound for professionals with expertise in
HTA, working fully in health technology assessments within the hospital. Because they
are integrated into the local organizational context, HTA units are in a better position to
transfer scientific evidence for clinical and managerial practice, providing inputs for
decision making in hospitals. The function a HTA unit is to help in the development of
management political answers to local issues using a process that is transparent, fair
and consistent.

Hospitals as providers of healthcare are the main buyers of equipment and they
provide the bulk of costly, high-technology services, thus they are the most
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important users. Also, ‘HTA can be used by hospitals for guiding difficult choices,
especially in balancing organizational and community needs.The key issues
governing decisions regarding the appropriate adoption of health technologies
are the cost-effectiveness and efficacy of the technologies; this is where decision and
policy makers turn to Health Technology Assessment (HTA)/ Hospital-based HTA or
“mini-HTA” has been recognised as one strategy to incorporate HTA into the decision
making process at hospital level. Mini-HTA is a management and decision support tool
based on the reasoning involved in HTAs.

Perceptions of Health Technology Assessment (HTA): At the public hospital, HTA is

a requirement for new health technology decision making. Queensland Health has
produced a policy stating that decision making for health technology must follow
HTA guidelines, however it is still very new and the implementation stage is still in
its infancy. In private practice/hospital, the HTA is not a requirement for new health
technology decision making, though participants agreed that HTA could be a valuable
tool for decision making. Decision makers from both types of hospitals were unfamiliar
with the HTA and mini-HTA; both the term and the guidelines. However, the decision
makers have searched for good guidelines or forms that they can adapt in order to have
a more structured decision making process. They believe it would be a good idea to
make HTA a formal requirement in the decision-making process for introducing new
health technologies in their hospitals.

The impact of HTA as a support tool for decision makers at institutional level is still
relatively minimal. Most decision makers, private and public, are not aware that there
are independent bodies, such as HTA agencies worldwide where they can get unbiased
information on health technologies.

Impact of Health Technology Assessment to Hospital Pharmacist

International Journal of Technology Assessment in Health Care (2013)

Studies have described the role of hospital pharmacists in local HTA, particularly in the
assessment of medical devices.Four HTA unit models were identified (two regional
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units and two units within university hospitals), to which they added their own
exclusive mini-HTA model.

One of the regional HTA units consisted almost entirely of hospital pharmacists.
Consultants from various medical specialities and health economics experts seemed to
make regular contributions to assessments, but were not among the permanent staff
members. The unit was initially set up to assess drug efficacy, but its function was
subsequently extended to include the assessment of innovative medical devices.

This illustrates the feasibility of the experience of hospital pharmacists in of the

assessment of scientific evidence relating to drugs being transferred to the assessment
of medical devices . The hospital pharmacists do not use a specific methodology for the
collection and analysis of scientific evidence. Instead, literature reviews are conducted,
on the basis of medical databases with regards to the HTA.

Roles of Hospital Pharmacist in HTA

1.Promoting the HTA culture by publishing information bulletins, reports, and

decisions on the Internet.

● In this regional unit, the diffusion of hospital-based HTA reports within the
organization seems to be essential, making professionals aware of the process
and promoting a culture of cost-consciousness.

2.Act as Consultant

● Providing expertise relating to medical devices and the medical device market.

● Hospital Pharmacist must have the skills in health economics and is heavily
involved in assessment of the financial impact of new devices.

3.Provide information reflecting local priorities.

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● This local priorities or local knowledge is a major asset in the successful
implementation of new medical devices in hospitals. Thus, the hospital
pharmacist, by considering the practical details of new device implementation,
helps to minimize the risk of failure.

In European hospitals, physicians often initially approach hospital pharmacists when

they wish to obtain new medical devices. Thus, hospital pharmacists can provide
feedback to HTA units, improving the definition of local needs.This implies that hospital
pharmacists interact closely with other health professionals, playing a key role in these
processes.In terms of organization, the hospital pharmacist is a key which go between
who interacts with all the stakeholders, not only physicians and hospital managers, but
also biomedical engineers.

For example, some innovative medical devices require workstations for which technical
details can be obtained only from biomedical engineers.In many European hospitals,
sterile medical devices are purchased and managed by hospital pharmacists. Thus,
hospital pharmacists need to discuss matters with biomedical engineers, to ensure that
they purchase appropriate devices. This ability to interact with other disciplines is a
major asset in hospital-based HTA activities.

Steps in the process of mini-HTA model

1. The form is completed by the physician, who provides a short description of the new
technology and the comparator and provides a first selection of references.

2. The form is transmitted to hospital pharmacists who check legal aspects.

3. Hospital pharmacists conduct a more systematic review of the literature. The level of
evidence of each publication is checked to determine whether the article is acceptable
or not.

4. Based on the comparator proposed by the physician, pharmacists check the safety of
the new device.
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5. Hospital pharmacists assess the total additional cost or savings associated with
the proposed technology with respect to the existing device used for the same
indication.

6. Finally, the form is submitted to the hospital executive manager, who decides
whether to purchase the device.

Conclusion:

Hospital pharmacists could make a major contribution to the development of local HTA
in university hospitals. They already promote safety, efficacy, and costeffectiveness for
medicines and could extend these functions to medical devices. Nevertheless, hospital
pharmacists would need to attend courses and training programs on HTA and health
economics, to be effective. As stated above, they could act as “HTA focal points,”
developing and supporting hospital-based HTA activities.

REFERENCE/S:

● https://www.sciencedirect.com/topics/nursing-and-health-professions/
pharmacoeconomics
● https://www.inbit.gr/wp-content/uploads/2019/06/2013-Hospital-based-HTA-for-
innovative-medical-devices-in-university-hospitals-and-the-role-of-hospital-
pharmacists.pdf
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● https://systematicreviewsjournal.biomedcentral.com/articles/10.1186/2046-
4053-3-129
● https://www.researchgate.net/publication/
275026160_The_Impact_of_Health_Technology_Assessment_on_Decision-
Making_Processes_in_Public_Versus_Not-for-Profit_Private_Hospitals
● https://www.researchgate.net/publication/
266630265_Hospital_based_HTA_Model_by_Structuring_the_Decision_Making_Pr
ocess_Regarding_the_Medical_Device_Incorporation
● https://www.gjmt.net/2019-vol1-issue-1pe-full-article
● https://www.researchgate.net/publication/
283797219_Applying_Pharmacoeconomics_in_Community_and_Hospital_Pharma
cy_Research