Pharmacoeconomics (MarkovModel)

This exercise is adopted from your textbook: Rascati, K. (2013). Essentials of

pharmacoeconomics. Lippincott Williams & Wilkins.

You are interested in comparing the costs and outcomes over 1-year time period of preventive

strategies for postmenopausal women with osteoporosis. You plan to compare three options:

1) Oral Cal-More, 10 mg/day

2) Nasal Cal-More, 200 IU/day

3) Long-acting Cal-More, 70 mg once a week. (Note: These are not real product names.).

The main outcome measured is incidence of bone fracture and the effect on QALYs. Each year,

about 5% of the patients taking once-a-day oral Cal-More have a fracture (95% do not), about

10% of those taking nasal Cal-More experience a fracture (90% do not), and 5% of those taking

long-acting Cal-More experience a fracture (95% do not). The cost of treating a fracture is

$3,000, and a fracture decrease a person’s QALY by 0.5 QALYs. Once-a-day oral Cal-More

causes gastrointestinal (GI) complications in 5% pf the patients. Nasal Cal-More causes nasal

irritation or bleeding in 10% of the cases. Once-a-week oral Cal-More causes GI complications

in 2% of the patients.

The average cost of treating GI complications is $200, and QALYs are decreased by 0.2. the

average cost of treating nasal problems is $100, and QALYs are decreased by 0.1.

The costs per year of the three medications are:

• Once-a-day oral Cal-More = $600

• Once-a-day Nasal Cal-More = $800

• Once-a-week oral Cal-More = $1,000

1) Draw a decision tree (3 points)

2) Calculate path probabilities (1 Point)

3) Calculate the average QALYs for each treatment (1 Point)

4) Calculate the average cost for each treatment (1 Point)

5) Calculate the average cost per QALYs for each treatment (1 Point)

6) Calculate the ICER between treatment options oral once a day and nasal once a day (1

Point)

7) Calculate the ICER between treatment options oral once a day and oral once a week (1

Point)

8) Provide your conclusion (1 Point)

Hint: individual has perfect health has 1 QALY

Effectiveness Adverse events Cost Path

probability

(p)

Expected cost

(p*cost)

Expected

QALY

(p*QALY)

Once-a-day Cal-More

Fracture GI

Fracture No GI

No fracture GI

No fracture No GI

Nasal Cal-More

Fracture Nasal problems

Fracture No nasal problems

No fracture Nasal problems

No fracture No nasal problems

Once-a-week oral Cal-More

Fracture GI

Fracture No GI

No fracture GI

No fracture No GI