Economic and Quality of Life Outcomes: The Four-Step Pharmacoeconomic Research Model

Economic and Quality of Life Outcomes: The Four-Step Pharmacoeconomic Research Model

ABSTRACT: Increasingly, economic data are being considered in formulary decisions. In oncology, pharmacoeconomic evaluations are essential to help decision makers weigh the associated costs and outcomes of competing chemotherapeutic interventions. In this article, we present a four-step pharmacoeconomic research model that can be customized for specific provider or payer systems. The model encompasses problem identification, clinical management analysis, three pharmacoeconomic analyses (cost consequence, expected cost, and cost effectiveness), and a sensitivity analysis-the rank order stability analysis (ROSA)-to validate the findings. [ONCOLOGY 9(Suppl):33-36, 1995]


Health care professionals, policymakers, and formulary committee
members are increasingly asked to augment formulary consideration
of drug efficacy and safety with economic information. In this
era of dwindling health care budgets, pharmacoeconomic analysis
facilitates choices, in terms of overall outcomes between therapies
competing for the same health care resources. This method of economic
evaluation informs the programmatic medical decision maker of
the appropriateness and value of health care procedures, including
drugs [1]. In no other field has the necessity and relative value
of such analyses proved to be more applicable than in oncology.

Comparisons of competing new chemotherapeutic interventions warrant
a pharmacoeconomic evaluation to weigh associated costs and outcomes
and compare these "offsets" with those of traditional
therapy. Our four-step research approach described in this article
is a flexible economic model for evaluating costs and consequences
will accommodate provider-specific parameters.

One very useful analytic component of such a model, discussed
below, is cost-effectiveness analysis, which compares the health
effects of a treatment strategy with the resources that must be
invested to adopt the strategy [2]. Comparison of effectiveness
in cancer is particularly difficult, since the criteria for diagnosis
vary with pathologists, and the criteria for prognosis vary with
the extent of disease [3]. The ability to customize the economic
model for specific provider or payer systems is essential in generating
valid and generalizable pharmacoeconomic data.

Authoritative pharmacoeconomic research requires a coherent data
set to ensure an effective valuation of costs and outcomes. Often,
assumptions and biases are immersed within a data set, thereby
compromising the integrity of an analysis. To compensate for this
intrinsic uncertainty, the four-step model incorporates a comprehensive
sensitivity analysis, described below, to identify "cost
drivers" and specific points of model instability.

It should be emphasized that pharmacoeconomics is a prescriptive
science, employed to facilitate choices in allocating scarce resources.
When properly executed and validated, economic research studies
provide essential information as input into the decision-making
process [1]. Traditional considerations, such as safety, efficacy,
equity, and access, should continue to serve as inputs into medical

Importance of Pharmacoeconomics to Oncology

Worldwide inflation of health care budgets has prompted many cost
investigations, predominantly emphasizing drug therapy. New chemotherapeutic
interventions have provided monumental improvements in patient
care, but not without associated increases in drug therapy costs.
Clinically significant outcomes (which may be curative, palliative,
or preventive) require a pharmacoeconomic analysis to quantify
cost-effectiveness of therapy. Desired outcomes attributed to
new therapies may be appreciated by the provider, patient, and
payer alike. An effective comparison of competing therapies warrants
a valuation of desired and undesired outcomes of therapy, to ensure
that a marginal outcome merits incremental cost.

Chemotherapy has resulted in improved palliation of symptoms,
higher response rates, and extended time to treatment failures.
These successful clinical results are allied with financial benefits
that may be realized by the provider (eg, hospital), third-party
payer (eg, Medicare), or patient. From the perspective of a provider
or third-party payer, the cost savings generated by chemotherapy
are partially derived from patients who have failed on primary
therapy. The decreased follow-up care costs associated with treating
failed therapy patients may be directly quantified as cost avoidance.
Successful treatment, or successful period of care, may also be
evaluated from the patient perspective as represented by quality
of life. Cost effectiveness, possibly measured in terms of cost
per event-free days, may provide a retrospective proxy for patient
quality of life.

A longer-term research objective is to prospectively examine the
economic implications of competing therapeutic interventions.
Better efficacy and longer effective treatment periods translate
into optimal resource utilization and improved patient quality
of life. Validated survey instruments are employed to evaluate
physical, social, and emotional aspects of a patient's well-being
that are relevant and important to the patient [1]. This prospective
technique will allow for a determination and financial quantification
of patient disease-free periods, further demonstrating cost-effective
or cost-utility benefits.


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