Brief Points on Health Economics and
Pharmacoeconomics
Health Economics and Pharmacoeconomics
Prof. Albert I. Wertheimer Temple University, U.S.A.
Ankara, Turkey 24 May 2005
What is Pharmacoeconomics?
Economics
– Theories to study behavior in allocating scarce resources.
Health Economics
– Application of same theories to health and healthcare issues
Pharmacoeconomics
– Determination of efficiency in therapeutic purchase and utilization.
Pharmacoeconomics Cont’d
Economics- allocation of scarce resources “ guns or butter” Health economics - Techniques same - Focus on healthcare delivery systems Pharmacoeconomics - Focus drug therapy [management]
Pharmacoeconomics
Balancing the cost and consequence (outcomes) of therapies & interventions Assessment of the most efficient use of available resources , defined in terms of patient outcomes and cost
Origins of Pharmacoeconomics
Since the mid-1980s:
– Supply of drugs exceeds demand. – It is assumed that a product approved by F.D.A. is satisfactory and equivalent. – Development of sophisticated large buyers. – Emergence of large databases enables observational studies comparing drugs head:head.
Origins Cont’d
– Widely available computer power at low cost. – Worldwide profit pressures requiring efficient purchasing and operations – New methodologies and emphasis on evaluation and outcomes.
Why Know Pharmacoeconomics?
Understand and critically appraise economic arguments proposed to support healthcare interventions, e.g. new drugs, or professional services. Participate in economic evaluation treatments and services to be a key player in national and local debates on resource allocation. Initiate economic evaluations of services and products. Participate in the debate on and address wider policy issues, such as:
– Staff remuneration structures – Need for, demand for and utilization of services – Reimbursement levels for healthcare.
Supply and Demand Curves
Demand Curve
A graph showing how the quantity demanded for some product during
Prof. Albert I. Wertheimer Temple University, U.S.A.
Ankara, Turkey 24 May 2005
What is Pharmacoeconomics?
Economics
– Theories to study behavior in allocating scarce resources.
Health Economics
– Application of same theories to health and healthcare issues
Pharmacoeconomics
– Determination of efficiency in therapeutic purchase and utilization.
Pharmacoeconomics Cont’d
Economics- allocation of scarce resources “ guns or butter” Health economics - Techniques same - Focus on healthcare delivery systems Pharmacoeconomics - Focus drug therapy [management]
Pharmacoeconomics
Balancing the cost and consequence (outcomes) of therapies & interventions Assessment of the most efficient use of available resources , defined in terms of patient outcomes and cost
Origins of Pharmacoeconomics
Since the mid-1980s:
– Supply of drugs exceeds demand. – It is assumed that a product approved by F.D.A. is satisfactory and equivalent. – Development of sophisticated large buyers. – Emergence of large databases enables observational studies comparing drugs head:head.
Origins Cont’d
– Widely available computer power at low cost. – Worldwide profit pressures requiring efficient purchasing and operations – New methodologies and emphasis on evaluation and outcomes.
Why Know Pharmacoeconomics?
Understand and critically appraise economic arguments proposed to support healthcare interventions, e.g. new drugs, or professional services. Participate in economic evaluation treatments and services to be a key player in national and local debates on resource allocation. Initiate economic evaluations of services and products. Participate in the debate on and address wider policy issues, such as:
– Staff remuneration structures – Need for, demand for and utilization of services – Reimbursement levels for healthcare.
Supply and Demand Curves
Demand Curve
A graph showing how the quantity demanded for some product during