1. Economic Evaluation in Health & Medicine
Nermeen Ashoush
Head of Health Economics Unit, (CDRD)
Lecturer in Clinical Pharmacy & Pharmacy Practice Department
The British University in Egypt

2. Objectives Definition of Health Economics & Pharmacoeconomics
Applications of Economic Analysis
The importance and clinical relevancy of pharmacoeconomics
Types of Pharmacoeconomics studies
Health Technology Assessment (HTA)
HTA Concept for Off-patent Pharmaceuticals (OPP) in emerging markets
Differentiated OPP Categories & Multiple Criteria Decision Analysis

3. Health Economics

4. Health Economics
Economics is the science of scarcity. It analyses how choices are structured and prioritized to maximize welfare within constrained resources. Health economics is a branch of economics concerned with the formal analysis of costs, benefits, and consequences of health care.

5. Application of Economic Analyses
Clinical Decision Making
Program Justification
Making cost-effective choices when resources are limited (for provider, third party payer, or patient)
To justify investment and reimbursement in a clinical service or program
Formulary Management
Drug Policy decisions, treatment guidelines
Purchasing negotiation
Pricing in the Pharmaceutical Industry

6. Pharmacoeconomics

7. Pharmacoeconomics
Pharmacoeconomics has been defined as the description and the analysis of the costs of drug therapy to health care system and the society. It identifies, measure and compares the costs and consequences of pharmaceutical products and services.
Cost ($) Rx
Outcomes

8. Why is Pharmacoeconomics important?
To understand how limited resources can be used most efficiently and effectively.
Clinicians want their patients to receive the best care and outcomes available, and payers want to manage rising costs.

9. Types of Pharmacoeconomics Studies

10. Outcome Measurement Unit
Table 1: The four basic types of pharmacoeconomics analysis
Methodology
Cost Measurement Unit
Outcome Measurement Unit
Cost-minimization analysis
Dollars or monetary units
Assumed to be equivalent in comparable groups
Cost-effectiveness analysis
Natural units (life year gained, mm Hg blood pressure, mMol/L blood glucose)
Cost-benefit analysis
Cost-utility analysis
Quality-adjusted life year (QALY) or other utilities

11. Health Technology Assessment
(HTA)

12. Technology Assessment
The application of scientific or other organized knowledge including any tool, technique, product, process, method, organization or system to practical task.
In healthcare technology includes drugs; diagnostics, indicators and reagents; devices, equipment and supplies; medical and surgical procedures used in prevention, screening, diagnosis and treatment.

13. Health Technology Assessment
The systematic evaluation of properties, effects, and/or impacts of health care technology.
HTA is conducted by interdisciplinary groups using explicit analytical framework drawing from a variety of methods.

14. HTA Concept for Off-patent Pharmaceuticals
in Emerging Markets (EM)

15. Emerging Markets Are on The Move to Universal Coverage
Source: Shen, J., ISPOR Singapore, 2016

16. 81%
58%
As majority patients are treated by OPP (~60-80%) , a robust HTA for pharmaceuticals can have critical impact on population health outcome and efficient utilization of health budget.
Source: Shen, J., ISPOR Singapore, 2016

17. Evidence-based HTA for OPP in EM
Delivering effective, universal and efficient health care is an important policy goal in many emerging markets.
Health Technology assessment (HTA) has been established to evaluate patent pharmaceuticals in many health care systems, but not yet for Off- Patent Pharmaceuticals (OPP).

18. Evidence-based HTA for OPP in EM (Cont.)
A group of public health and health economics experts have undertaken an initiative to develop an evidence-based HTA methodology for pharmaceuticals in emerging markets. The initial concept has been presented at the 2015 ISPOR Conference, 2016 HTA international conference, & 2016 ISPOR Singapore Conference
Concept 1: Differentiated OPP Categories
Concept 2: MCDA Simple Scoring
Source: Shen, J., ISPOR Singapore, 2016

19. Differentiated OPP Categories
Concept 1

20. How This Could Be Applied in Pricing & Reimbursement?
Differentiated OPP Categories
Price
Reimbursement Rate
Originator
+++++
Gx showing real life patient outcome benefit
++++
Gx fulfilling PIC/S EU GMP standard
+++
Gx with BE/BA data
Gx with WHO GMP standard ++
Gx without above +
BA: Bioavailability; BE: Bioequivalent; GMP: Good Manufacturing Practices; OPP: Off-Patent Pharmaceuticals; PIC/S: Pharmaceutical Inspection Convention; WHO: World Health Organization.
Source: Brixner, D., ISPOR Singapore, 2016

21. Multiple Criteria Decision Analysis (MCDA)
Concept 2

22. Multiple Criteria Decision Analysis
Multiple Criteria Decision Analysis (MCDA) is a set of methods and approaches to aid-decision making, where decisions are based on more than one criterion, which make explicit the impact on the decision of all the criteria applied and the relative importance attached to them.
Source: Brixner, D., ISPOR Singapore, 2016

23. MCDA Simple Scoring: (Applicable for all countries)
Adapt MCDA Simple Scoring to reflect HCS development status and priorities.
Involve key stakeholders in defining criteria and scoring to achieve policy acceptance and long-term sustainability.
A set of criteria were developed based on interactive workshop (electronic voting system) with 57 experts from 15 emerging markets.

24. The criteria are further grouped and specified as below
Product
Manufacturer
Service
Cost Effectiveness
Pharmaceutical equivalence vs originator
Bio-equivalence vs originator
Specify SKU
Manufacturing site qualification
Supply track record
Pharmacovigilance
Continued Medical Education Program
Real life patient outcomes
Direct and indirect costs
Source: Brixner, D., ISPOR Singapore, 2016

25. Table 2: Steps in a value measurement MCDA process
Description
Defining the decision problem
Identify objectives, alternatives, stakeholders, and output required
Selecting and Structuring criteria
Identify criteria relevant for evaluating alternatives
Measuring performance
Gather data about the alternatives’ performance on the criteria
Scoring alternatives
Elicit stakeholders’ preferences for changes within criteria
Weighting criteria
Elicit stakeholders’ preferences between criteria
Calculating aggregate scores
Use the alternatives’ scores on the criteria and the weights for the criteria to get total value by which the alternatives are ranked
Dealing with uncertainty
Perform uncertainty analysis to understand the level of robustness of the MCDA results
Reporting and examination of findings
Interpret the MCDA outputs, including uncertainty analysis, to support decision making
Source: Kalo, K., ISPOR Singapore, 2016

26. Example of MCDA Process

27. Promote optimal Health Outcome
Criteria
Criteria Weight
Drug A
Drug B
Drug C
Promote optimal Health Outcome
Improve clinical outcomes
0.2
Aclin
Score= 1
Bclin
Score= 0
Cclin
Improve quality of life
0.4
AQOL
Score= 0.2
BQOL
CQOL
Score= 0.5
Improve productivity
Aprod
Bprod
Cprod
Reduce total cost of care
Acost
Bcost
Ccost
Expected Value
0.7
0.1
0.5
Drug A total value = (0.2)(1) + (0.4) (0.2) + (0.2)(1) + (0.2) (1) = 0.7
Drug B total value = (0.2) (0)+ (0.4) (0)+ (0.2) (0.5) + (0.2) (0) = 0.1
Drug C total value = (0.2) (0) + (0.4) (0.5) + (0.2) (0.5) + (0.2) (1) = 0.5
Source: Maniadakis, M, ISPOR Milan, 2015

28. MCDA
VACSERA Egypt

29. No Criteria Criteria Weight1
Prequalification (WHO, EMA, FDA, TGA, MHLW)
[1=3, 2=6, 3=9, >3= 12] 12 2
Country of origin is one of reference country
[each country = 3] 3
Strain used/registered in 3 reference country
[each country=3] 9 4
History of previous delivery within the last 5 yrs
[1 year=2, 2 years=4, 3 years=6, 4 years=8, >5 years=10] 10 5
Compliance with all technical aspects in previous delivery
[50 to <60%=3, 60 to <80%=5, >80%=8] 8 6
Timeliness in previous delivery
[50 to <60%=3, 60 to <80%=7, >80%=11] 11 7
Lengthy Shelf-life
# of doses/vial (single dose/vial preferred)
[6 doses=10]
Vaccine is composed of best strain available [best strain= 10]
No change in vaccine physical appearance (become unusable) in previous delivery [change= 0, No change = 8]
Availability of Vaccine Vial Monitor (heat sensor) [Available= 4, unavailable= 0]
Total
100

30. Advantages of MCDA Process

31. It is open and explicit.
The choice of objectives and criteria that any decision making group may make are open to analysis and to change if they are felt to be inappropriate.
Scores and weights are also explicit and amended if necessary.
Performance measurement can be sub-contracted to experts, so need not necessarily be left in the hands of the decision making body itself.

32. Conclusion MCDA can support decision making in healthcare.
It improves transparency and consistency in decisions and potentially the accountability of public sector decision makers.
It doesn’t replace judgment but rather identifies, collects, and structures the information required by those making judgment to support the deliberative process.

33. Thank You