Pharmacoeconomics: a Review

‘Pharmacoeconomics’ is a new (and not altogether elegant) word; but economic interest in drug and other treatments of health problems is much older. Pharmacoeconomics is a sub-discipline of the field of health economics, which itself is a relatively new sub-discipline of economics, only formerly appearing in the economics scientific literature since the 1960s. Pharmacoeconomics is the description and analysis of the costs of drug therapy to healthcare systems and society. Pharmacoeconomic studies weigh the cost of alternative drugs and drug regimens against the outcomes they achieve to guide decisions and policies about which drugs should be used in general, which drugs should be paid for by the government or other third party payers, etc. The importance of pharmacoeconomic information to healthcare decision makers will depend upon the viewpoint from which the analysis is conducted. Pharmacoeconomics is needful in pharmaceutical industry, government, and in the private sector for comparing various cost consequences. The two fundamental components of pharmacoeconomic studies are measures of costs and measures of outcomes that are combined into a quantitative measure or ratio. It can be done using various methods like Cost-minimization analysis (CMA), Cost-effectiveness analysis (CEA), Cost-utility analysis (CUA), and Cost-benefit analysis (CBA). Cost involves all the resources that are used to produce and deliver a particular drug therapy. Outcomes may be positive or negative. Positive outcomes are a measure of the drug’s efficacy; negative outcomes include side effects, treatment failure, and the development of drug resistance. The measures of costs and outcomes which costs to include and how outcomes are measured and valued depends on the perspective of the study. The results of pharmaceutical studies give a quantitative measure (cost/outcome achieved) that shows the most efficient allocation of limited resources among two or more competing alternative medications and services or where you can get the most improvement in outcomes for the money that is available to spend on drugs. Many problems limit our use of health economics in practice. The whole process may be open to bias, in the choice of comparator drug, in the assumptions made, or in the selective reporting of results.