20. Pharmacoeconomics: Definition. Types of pharmacoeconomic analyses.
Explains how pharmacoeconomics compares the costs and consequences of treatments, and how the chosen analysis depends on how outcomes are measured. Covers cost-minimisation, cost-effectiveness, cost-utility and cost-benefit analyses in a comparison table, with a worked cost-effectiveness example, the incremental cost-effectiveness ratio and a dominance grid. Also describes the QALY, its utility weighting and willingness-to-pay thresholds, and a table of cost categories.
Inside: 5 sections · 3 tables · 1 formula · 16 flashcards · 2 min
Topic 20 of 30 in the MU Sofia syllabus for Clinical Pharmacology (Medicine, Year 5). The free AceMed note covers it in 5 sections, about 164 words (2 min of reading), with 16 flashcards.
In this note
Introduction
The four types
Cost-effectiveness
Cost-utility and the QALY
Costs
Introduction
Pharmacoeconomics compares the costs and consequences of alternative treatments. The type of analysis depends on how the outcomes are measured; costs are always in money.
Cost-effectiveness
Example: option A costs 1,000 and gains 8 life-years (125 per life-year); option B costs 700 and gains 5 life-years (140 per life-year). A is more cost-effective even though it costs more.
The key figure is the incremental cost-effectiveness ratio (ICER): the extra cost of one option per extra unit of effect over the other:
Cost-utility and the QALY
A quality-adjusted life year combines length and quality of life: each year is weighted by a utility from 0 (death) to 1 (perfect health). One QALY is 1 year in full health, or 2 years at 0.5, or 4 years at 0.25. Utilities are measured with rating scales, standard gamble, time trade-off or questionnaires such as EQ-5D. Many countries use a willingness-to-pay threshold per QALY (e.g. £20,000–30,000 in the UK).
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