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How to Apply Pharmacoeconomic Principles to Local Settings

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Disease Management & Health Outcomes

Summary

Application of pharmacoeconomic principles to local settings requires an understanding of the subject matter of pharmacoeconomics. Pharmacoeconomics is the application of economics to the evaluation of healthcare interventions. It seeks to broaden the rational scientific basis for making choices between alternative forms of healthcare interventions by capturing and relating their costs and outcomes. Capturing costs requires addressing each form of cost and where they fall. An outcome of treatment implies a change in health status which can be identified and measured using health outcome instruments. Combining costs and outcomes in an analysis will indicate whether a particular healthcare intervention represents good value for money. The type of analysis used to relate costs and outcomes (e.g. cost-minimisation, cost-effectiveness, cost-benefit, cost-utility) will depend on the number, magnitude and distribution of the outcomes.

Pharmacoeconomic analysis can, and should, form part of clinical trials comparing different forms of treatment intervention, considering that the efficiency of a healthcare intervention in practice may differ from its apparent efficacy in the clinical trial. Pharmacoeconomic principles can also be applied to clinical dilemmas using modelling techniques that do not involve studying patients directly. Future costs and benefits can be brought to present-day values using the method of discounting. Sensitivity analysis allows the ‘crystal ball’ to be applied to a variety of local settings.

This paper enables those who are faced with pharmacoeconomic assessments to be more vigilant and critical of the techniques used and the assumptions made. This paper also leads to a wider recognition of the importance of economics in clinical decision-making and encourages the incorporation of pharmacoeconomic analysis into the options available.

Throughout the paper, emphasis is placed on offering insight and inspiration to the tools, tips and traps of applying pharmacoeconomics to local settings. Examples from the published literature are used to signal the relevance and importance of pharmacoeconomics.

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Authors and Affiliations

  1. Department of Medicines Management, Keele University, Keele, Staffordshire, ST5 5BG, England

    Alan S. M. Earl-Slater & James N. R. Bashford

  2. North Staffordshire Hospital NHS Trust, Stoke on Trent, Staffordshire, England

    Jonathan R. B. Green

Authors
  1. Alan S. M. Earl-Slater
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  2. John C. Mucklow
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  3. James N. R. Bashford
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  4. Jonathan R. B. Green
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Corresponding author

Correspondence to Alan S. M. Earl-Slater.

Additional information

About the Authors: Alan S.M. Earl-Slater is Senior Lecturer in Health Economics in the Department of Medicines Management at Keele University, Staffordshire, UK. He previously worked at Birmingham and Oxford. His main research interest is the application of economics to the pharmaceutical environment including government policy, business strategy and value for money studies.

John C. Mucklow is Consultant Physician and Clinical Pharmacologist at North Staffordshire Hospital NHS Trust, Stoke-on-Trent, and Senior Lecturer in Clinical Pharmacology and Therapeutics in the Department of Medicines Management, Keele University, Staffordshire, UK. His main interest is postgraduate education in therapeutics for health professionals in primary and secondary care.

James N.R. Bashford is a senior partner in General Practice in Trent Vale, Stoke-on-Trent, and Lecturer in Primary Care Research in the Department of Medicines Management, Keele University, Staffordshire, UK. His main interests are the management of asthma and the development of a network of general practitioner researchers.

Jonathan R.B. Green is Consultant Physician and Gastroenterologist at North Staffordshire Hospital NHS Trust, Stoke-on-Trent, and Senior Clinical Lecturer in the Department of Medicine, Keele University, Staffordshire, UK.

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Earl-Slater, A.S.M., Mucklow, J.C., Bashford, J.N.R. et al. How to Apply Pharmacoeconomic Principles to Local Settings. Dis-Manage-Health-Outcomes 2, 65–76 (1997). https://doi.org/10.2165/00115677-199702020-00002

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