Pharmacoeconomics and Drug Selection

Course code EPID6520Units 10Level 6000Faculty of Health and MedicineSchool of Medicine and Public Health

Explains pharmacoeconomics, which is the study of the cost-effectiveness of medicinal drugs. Combines the principles of evidence-based medicine, clinical economics and decision analysis to aid the selection of drugs for listing in national formularies. Pharmacoeconomics is becoming an essential management tool for drug subsidisation programs throughout the world, and has important applications in both developed and developing countries.

Not available in 2015

Objectives1. Identify and describe the kind of choices facing national/state/provincial governments or organisations in making choices about purchasing medicines.
2. Provide a conceptual and analytical framework (both economic and clinical) in which drug selection problems can be analysed.
3. Appreciate the relevance of fundamental economic concepts, such as ' opportunity cost' and 'the margin' to drug purchasing decisions.
4. Appreciate the usefulness of an evidence-based approach to economic evaluation.
5. Develop practical skills which will enable the participant to appraise critically economic evaluations of pharmaceuticals.
6. Develop an understanding of how the results of economic evaluations are dependent on the value judgements made.
7. Develop an understanding of the relationship between evaluation and health policy.
ContentThe course content can be summarised as follows:
1. Principles of evidence-based medicine. Dimensions of evidence (level, quality, size of effect, and relevance of outcome measures). Analysis and biostatistical issues.
Measures of effect, size - relative and absolute differences, number needing to be treated (NNT). Methods of systematic review and meta-analysis.
2. Basic procedures for performing simple cost-effectiveness analyses. Incremental costs and benefits, incremental cost-effectiveness ratios, cost offsets. Basic approaches to economic analysis of drugs - cost minimisation, cost benefit analysis, cost-effectiveness analysis, and cost utility analysis.
3. Principles of economic analysis - scarcity, opportunity costs, 'cost-effective' versus 'affordable'. Decision-making at the margin; importance of rational drug use in maintaining cost-effectiveness in real life.
4. Measuring utilities and quality of life during drug therapy.
5. Problem-based pharmacoeconomics - applying the principles and techniques to a wide range of drug interventions relevant to developing and developed countries.
6. The use of pharmacoeconomic analysis in pricing decisions and formulary decision-making.
7. Advanced modeling techniques - the use of decision analytic techniques and cohort simulation models (Markov process and Markov chain). The importance of simple models and transparency. Sources of common errors in pharmacoeconomic analysis and their impact on decision-making.
8. The world drug situation. The evolving essential drug program. Where pharmaco-economics 'fits' in achieving cost-effective use of resources in developing, developed and transitional countries.
Replacing Course(s)n/a
Industrial Experience0
Assumed KnowledgeMost students will have a background in medicine or pharmacy and an Epidemiology and Biostatistics background. Experience in drug selection decisions at a local institutional, regional, national or international level would be desirable.
Modes of DeliveryDistance Learning : Paper Based
External Mode
Internal Mode
Teaching MethodsEmail Discussion Group
Assessment Items
Essays / Written Assignments4 Progress Assignments worth 10% each and 2 Marked Assignments worth 30% worth.
Contact HoursEmail Discussion Group: for 2 hour(s) per Week for Full Term
Tutorial: for 2 hour(s) per Week for Full Term