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Presentation prepared by Omar Hasan Kasule Sr MB ChB (MUK), MPH (Harvard), DrPH (Harvard) Professor of Epidemiology and Bioethics
· Economic evaluation is an indispensable component of clinical trials: we need to know whether the new treatments offer economic advantages in view of very high health expenditures in developed countries
· Health itself is not an economic good but health care resources such as drugs and hospitals are treated like economic goods and they follow the rules of demand and supply
· Pharmacoeconomics uses health economic principles and economic evaluation methods to make decisions about demand and supply of medicines
· Economic evaluation is increasingly becoming part of phase 3 clinical trials
THE CONCEPT OF VALUE
· The concept of value is difficult to appreciate in health because health is not a commodity with a price
· A willingness to pay approach can be used to determine price but it discriminates against the poor
· The laws of supply and demand do not work well in health and pareto optimality is not easy to achieve
THE CONCEPT OF ALLOCATIVE EFFICIENCY
· Evidence from economic evaluation is used to determine how to allocate treatment resources
· The technique of cost utility analysis is used to guide allocative efficiency
THE CONCEPT OF TECHNICAL EFFICIENCY
· Technical efficiency is using the least resource to achieve a given outcome
· Technical efficiency is assessed using cost-effectiveness analysis
THE CONCEPT OF OPPORTUNITY COST
· Opportunity cost is about an alternative way of using the resource
· Do you use USD1000 to treat 10 and increase survival by 10 days or you use it to treat 50 people and increase survival by 2 days?
DISCOUNTING
· How do costs today relate to benefits later?
EFFICACY, EFFECTIVENESS and EFFICIENCY
· Efficacy is measured in the ‘artificial’ conditions of a clinical trial
· Effectiveness is measured by testing a drug in real life conditions
· Efficiency includes assessing costs
HYPOTHESES
· Superiority
· Non inferiority