1. 1 Drug and Therapeutics Committee

2. Objectives  Discuss the use of aggregate data including defined daily dose in analyzing the consumption of medicines Perform ABC analysis and explain how it can be used to identify medicine use problems, reduce cost, and improve efficiency in the pharmaceutical supply system Discuss how VEN system for setting priorities will assist the DTC in medicine selection, purchasing, and inventory management

3. Outline—Part B  Introduction  Aggregate data  DDD  VEN ABC Analysis  Activities 3–5  Summary

4. Methods to Investigate Medicine Use  Indicator study methods  Use data collected at the individual level—patient, health facility  Data insufficient to make judgments about appropriateness of a medicine for a specific diagnosis  Aggregate data methods  Use routine data (e.g., stock records) not collected at the individual patient level  Gives overview of medicine use and can highlight problem areas  In-depth investigation of medicine use  Prescription audit, patient record review  Drug use evaluation (DUE) (discussed in session 11)  Qualitative methods to understand causes of a medicine use problem (discussed in session 8)

5. Aggregate Data (1)  Medicine use aggregate data sources  Procurement records  Warehouse medicine records  Pharmacy stock and dispensing records  Adverse drug reaction (ADR) and medication error reports  Patient medical records

6. Aggregate Data (2)  Data that can be retrieved  Medicine consumption  Medicine availability  Medicine cost data  Frequency of use  Per capita use of specific product  Prevalence of ADRs  Prevalence of medication errors

7. Defined Daily Dose (1)  The DDD methodology converts and standardizes readily available product quantity data, such as packages, tablets, injection vials, bottles, into crude estimates of clinical exposure to medicines, such as the number of daily doses  A methodology that allows comparison of consumption of pharmaceutical products across hospitals, regions, and countries  Combines different medicine strengths and doses to provide one unit of consumption for each medicine for comparison of use

8. Defined Daily Dose (2)  Defined globally by the WHO Collaborating Center for Drug Statistics Methodology, Oslo, Norway http://www.whocc.no/atcddd/  Typically expressed as follows  DDD per 1,000 inhabitant per day for total medicine consumption  DDD per 100 beds per day (100 bed-days), for hospital use

9. Defined Daily Dose Example 1: Captopril District hospital and clinics use of captopril with 2,700,000 population –22,500,000 tablets yearly of captopril 25 mg –3,000,000 tablets yearly of captopril 50 mg Quantity of medicine used in 1 year multiplied by strength of the product = (22,500,000 × 25 mg) + (3,000,000 × 50 mg) = 712,500,000 mg Divide total quantity by assigned DDD for that medicine (captopril = 50 mg ) = 712,500,000 / 50 mg = 14,250,000 DDDs Divide total quantity by 2,700,000 population and multiply by 1,000 (this is the population denominator for this method) = (14,250,000 / 2,700,000 ) x 1,000 inhabitants = 5,278 DDD / 1,000 inhabitants / year 5,278 / 365 = 14.5 DDD / 1,000 inhabitants / day

10. Defined Daily Dose Example 2: Carbamazepine Use in South Africa, 2001  Annual consumption= 100 million x 200 mg tablets = 20,000,000,000 mg = 20,000,000 g  Assigned DDD for carbamazepine = 1 g  No. DDDs consumed= 20,000,000/1 = 20,000,000 per year= 20,000,000/365 = 54,795 per day for population of 48,000,000 = 54,795 / 48,000,000= 0.0011 per person per day = 1.1 DDD per 1,000 population per day

11. VEN Analysis  Method to prioritize for medicine purchase and stock  V–Vital  Potentially lifesaving  Crucial to providing basic health services  E–Essential  Effective against less severe but significant illness, but not vital  N–Nonessential  For minor illnesses  High cost and low therapeutic advantage

12. Conducting a VEN Analysis  Step 1. Classify all medicine on the list as V, E, or N.  Step 2. Analyze the “N” items. Where possible, reduce quantities to purchase or eliminate them.  Step 3. Identify and limit therapeutic duplications.  Step 4. Reconsider proposed purchase quantities.  Step 5. Find additional funds if needed or possible.

13. VEN Applications for DTC  Identifies high-priority medicines for procurement  Identifies low-priority medicines that the DTC should analyze carefully for deletion from the formulary

14. VEN Analysis, Activity, and Discussion

15. ABC Analysis  Method for determining and comparing pharmaceutical costs within the formulary system  “Separating the vital few from the trivial many”— Pareto principle  Tool for identifying many medicine use problems  Utilizes computer and appropriate software to run analysis

16. ABC Analysis: A, B, and C Medicines (1) Category Percentage of Budget Percentage of Medicines Ordered A medicines70–80%10–20% B medicines15–20%10–20% C medicines 5–10%60–80%

17. ABC Analysis: A, B, and C Medicines (2)  A medicines—High percentage of funds spent on large-volume or high-cost items  Greatest potential for savings  Greatest potential for identifying expensive medicines that are overused  B medicines—Moderate cost and moderate number of items; important items  C medicines—Small amount of funds spent on the majority of the inventory

18. Applications of ABC Analysis for a DTC  Measures the degree to which actual consumption reflects public health needs and morbidity  Reduces inventory levels and costs by arranging for more frequent purchase or delivery of smaller quantities of class A items  Seeks major cost reductions by finding lower prices on class A items  Reduces inventory of items that have limited use in the system, but costs the system large amounts of money  Provides information for choosing the most cost-effective alternatives and finding opportunities for therapeutic substitution  Gathers information for pharmacoeconomic analysis

19. Steps in Performing ABC Analysis  Step 1. List all items purchased and enter the unit cost.  Step 2. Enter consumption quantities for each item.  Step 3. Calculate the value of consumption for each item.  Step 4. Sort the list in descending order by total value.  Step 5. Calculate the percentage of total value represented by each item.  Step 6. Calculate the cumulative percentage of total value for each item.  Step 7. Choose cutoff points for A, B, and C.

20. ABC Step 1. List items and unit costs.

21. ABC Steps 2 and 3. Calculate consumption quantities and values—sort list by descending values.

22. ABC Step 4. Calculate the percentage of total value represented by each item.

23. ABC Step 5. Rank items in descending order.

24. ABC Step 6. Calculate the cumulative percentage of total value for each item.

25. ABC Step 7. Choose cut-off points for ABC analysis chart. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0%5% 10%15%20%25%30%35%40%45%50%55%60%65%70%75%80%85%90%95% Cumulative No. of Items (%) Cumulative Items Value (%)

26. Activities 3, 4, and 5  Activity 3. VEN Analysis—Performing a VEN analysis  Activity 4. Performing an ABC analysis— Identifying high-cost medicines using an ABC analysis  Activity 5. Performing an ABC/VEN analysis using participants’ data

27. Summary  A major function of a DTC is to identify medicine use problems and to implement corrective measures  Aggregate methods are a useful way to gain an overview of medicine use problems using routine data not collected at the individual patient level.  Examples of a aggregate data methods include—  DDD  VEN analysis  ABC analysis