Health Economic Exercises
CulbertHealth Economic Exercises
Virtucon Pharmaceuticals recently received approval for a new pharmaceutical Agent (StrokeLyte) NoClot TM with an indication for the treatment of acute stroke. It’s efficiacy is similar to Heparin but it is believed to have unique pharmacologic properties that support a dosing and administration advantage.
Dosing & Administration:
· StokeLyte: 1 Gm IV infusion every 8 hrs for 48 hrs
· Heparin: 1 Gm IV initial loading dose and then infusion every 6 hrs for 48 hours
Efficacy: Defined as rate for return of motor function is approximately 80 % and for survival of a first time stroke is 90% for both agents
The P&T Committee for Kwality Care, a new managed care organization, is potentially interested in considering this new agent for addition to the formulary. They are concerned about the impact on the pharmacy budget and have decided that a formal economic analysis should be done before it is added. Your Health Economics team has been asked to help assess the potential impact of this agent on the Health Plans Pharmacy Budget.
Cost Minimization Exercise:
The following table provides information about Strokolyte and heparin regarding dosing and adminstration (cost to treat) options consistent with approved product labels
Cost Variable | Heparin: 1Gm IV initial loading infusion then every 6 hrs for 48 hours | StrokeLyte: 1 Gm IV Infusion every 8 hrs for 48 hours |
Drug acquistion cost/dose
| $100 | $125 |
Administrative supply - cost/dose
| $10 | $10 |
Pharmacist prep time - cost/dose
| $25 | $25 |
Nursing infusion time - cost/dose
| $50 | $50 |
Total Laboratory montoring per course of therapy (all doses) | $60 | $60 |
Please conduct a cost minimization analysis as it relates to cost to treat consistent with the (hypothethical) label for both drugs relative to their respective regimens.
Cost of Therapy / Cost to Treat | Heparin 1Gm initial IV infusion then an IV infusion every 6 hr for 48 hours | Strokelyte 1 GmIV Infusion every 8 hr for 48 hours |
Total number of doses/regimen < Hint: count the # of doses well > |
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Total Drug acquistion costs
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Total Administrative supply costs
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Total Pharmacist time costs
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Total Nursing time costs
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Total Laboratory montoring costs
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Total Regimen Costs per Pt |
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Expected # of Strokes (N = 184 /yr): Calculate the yearly economic impact for treating this population using the regimen costs for each of the agents |
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Cost Delta between agents |
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Which agent would you recommend to the P&T Committee as the primary agent for use within the plan and why ?
Cost Effectiveness Exercise:
A new competitive agent ClotLyte has just launched. This product is being positioned as a less costly within class alternative to StokeLyte. The company Cheap BioSimilars Inc. has been very aggressive with institutional pricing. Their outcomes data, however is not as compelling as the outcomes evidence generated from the StokeLyte studies despite the lower acquisition price.
The information below is provided from their product label (hypothetical). Note: Recent long term safety data has revealed that additional monitoring will be necessary with both agents as it relates to risk of liver toxicity. ClotLyte has a slightly different label regarding monitoring which translates to slightly lower monitoring costs in addition to their lower acquisition costs.
Dosing and administration costs:
ClotLyte: $1000 per patient per regimen.
StokeLyte: $1320 as calculated in the cost minimization exercise
The chart below provides the differences between the agents for the various costs and outcomes of interest.
Cost Effectiveness Exercise Inputs:
Cost Variable | Strokelyte 1Gm IV Bolus q 6hr x 8 doses | ClotLyte 1 Gm IV bolus q6 hr X 8 doses |
Drug cost/patient/regimen
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$1320 |
$1000 |
Hospitalization Costs
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$28,405 |
$22,000 |
Additional Monitoring Costs
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$275 |
$100 |
Recurrent Stroke Avoidance (surrogate endpoint) |
80% (.8) |
50% (.5) |
Increased Life Expectancy
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3.5 yrs |
2.0 yrs |
Utility Score
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0.75
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0.5
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Using the information provided above complete the following cost effectiveness analysis for the various outcomes of interest
Cost Variable
| StrokeLyte Regimen | ClotLyte Regimen |
Total Drug Costs per regimen
Additional Monitoring Costs
Hospitalizaton costs |
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Total cost of Care per patient per regimen
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Calculate ICR Cost / Stroke Avoided
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Calculate ICR Cost / years of life gained
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Calculate Cost-Utility Ratio Cost / QALY
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What would your recomment to the P&T regarding these two agents and why ?
Economic Research Methods:
Method | ABR | Formula | Input | Output | Results Expressed | Pro / Cons |
Cost of Illness
| COI | (DC1+IC2) + (DC2+IC2) | $$ | N/A | Total cost of illness | Does not look at TXs separately |
Cost Minimization Analysis
| CMA | (DC1-DC2) or (DC1+IC1)-DC2+IC2)* | $$ | Assume Comparable Effectiveness | Net cost savings | Assume both TXs have same effectiveness |
Cost Effectiveness Analysis
| CEA
| (DC1-DC2) / (E1-E2) or (DC1+IC1) – (DC2+IC2) / (E1-E2)* | $$ | Health Effect | Incremental cost versus change in unit of outcome | Compare TXs that have the same tupe of effect units |
Cost Benefit Analysis
| CBA
| (B1-B2) / (DC1+IC1)- (DC2+IC2) or (B1-B2) / (DC1+IC1)-(DC2+IC2)* | $$ | $ | New benefit or ratio of incremental benefits to incremental costs | TXs can have different effects, but everything must be dollarized |
Cost Utility Analysis
| CUA
| (DC1-DC2) / (U1-U2) or (DC1+IC1) – (DC2+IC2) /(U1-U2)* | $$ | Patient Preferences & QoL | Incremental cost against change in unit of outcomes adjusted by Pt preference/QoL | Preferences are difficult to measure |
Legend:
DC = Direct Costs
IC = Indirect Costs
B = Benefit
U = Utility
E = Health Effect
* = Preferred Formula
12 years ago
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solution_h_c_exercise.docx
