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Pharmacoeconomics is the description and analysis of the costs of drug therapy to health care systems and society. Pharmacoeconomic studies identify, measure, and compare the costs and consequences of pharmaceutical products and services. Decision-makers use these methods to evaluate and compare the total costs of treatment options and the outcomes associated with these options. To show this graphically, think of two sides of an equation: (1) the inputs (costs) used to obtain and use the drug and (2) the health-related outcomes (Figure 70-1). The center of the equation, the drug product, is symbolized by Rx. If only the left-hand side of the equation is measured without regard for outcomes, this is a cost analysis. If only the right-hand side of the equation is measured without regard to costs, this is a clinical or outcome study. A pharmacoeconomic analysis measures both sides of the equation. Outcomes research is defined as an attempt to identify, measure, and evaluate the end results of health care services. It may include not only clinical and economic consequences, but also outcomes, such as patient health status and satisfaction with their health care. Pharmacoeconomics is a type of outcomes research, but not all outcomes research is pharmacoeconomic research.


Pharmacoeconomic studies description. Reproduced with permission from Malone PM, Kier KL, Stanovich JE: Drug Information: A Guide for Pharmacists, 4th ed. New York, NY: McGraw-Hill; 2012.

Models of Pharmacoeconomic Analysis

The four types of pharmacoeconomic analyses measure costs or inputs in dollars and assess the outcomes associated with these costs (Table 70-1). Pharmacoeconomic analyses are categorized by the method used to assess outcomes and include:

  1. Cost-minimization analysis (CMA): outcomes are assumed to be equivalent;

  2. Cost-benefit analysis (CBA): outcomes are measured in dollars;

  3. Cost-effectiveness analysis (CEA): the costs are measured in natural units (eg, cures, years of life, blood pressure); and

  4. Cost-utility analysis (CUA): outcomes take into account patient preferences (or utilities).

TABLE 70-1Types of Pharmacoeconomic Analysis

Assessment of Costs

The assessment of costs is the left-hand side of the equation in Figure 70-1. Costs are calculated to estimate the resources that are used in the production of an outcome. Pharmacoeconomic studies ...

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