Welcome, to the class I'm Jan Hirsch. I teach at the University of California San Diego. Skaggs School of Pharmacy and Pharmaceutical Sciences, very long name. there I am responsible for a class in pharmacoeconomics and also I teach in the area of health policy and healthcare systems. Prior to my academic life I have been involved for many years in the pharmaceutical industry. So I have worked both on the developmental side you know the clinical research side. R and D side and also in the commercial side and all of my experiences have been related to, pharmaco-economics or open I'm going to talk about today, outcomes research. Eh, and I have been, I have, I've done that for the U.S. markets, then I've also done that for the Eur, mainly European, Australian, Canadian markets. Haven't done a lot in, haven't done anything basically in Asia so I can't answer questions about that. So, okay. So, alright. Let's get started. Okay. So the objectives of what we want to cover today is, I want to tell you about, what is pharmacoeconomics. And give you some ideas of the types of pharmocoeconomic analyses that are done, within the drug development process. And I'm going to show you some examples and you can actually see some pictures. And I'm not going to show you all of the research methodology behind all of these examples, I'm just going to sort of show you the results. So you can get an idea of what the pharmacoeconomic analyses are like. And then at the end, I want to leave time to go through actually how to how the pharmacoeconomic process, research process is folded into the drug development process. Because you've been studying about that drug development process already. Okay. So first of all what is pharmacoeconomics? pharmacoeconomics is a field or a discipline that is used by health care payers to really compare the cost versus the benefit of alternative drugs. It could also be alternative devices or alternative services but I'm going to be referring to it as with drugs since we're talking about drug developments. a definition, another definition is really looking at your balancing the costs of an intervention with the costs of an intervention. Those consequences are also called outcomes. In this whole field of pharmacoeconomics the terminology there's several terms utilized to describe certain things. So you'll hear people use different terms and that's why I've given a couple of terms throughout the lecture. As I said, it could be comparing the cost and consequences of products. Or it could also be of services. So this could applied to I, I apply at my research to evaluating the value of pharmacists services. But it could certainly be physicians services, nurses services. It could be dieticians services. All the methodologies are the same. It's just picking what the out, the outcomes are, which we'll talk about. And picking what the interventions are you want to look at. The cost equals the cost over some outcome equals the value, you guys can see that from here. the cost always stays the same. And we're going to talk about that. But the way that we measure the outcomes changes over the types of pharmacoeconomic analyses and I'll walk you through that. But all the value is, it's always some sort of expression of what am I paying. And what am I buying for that what am I getting for the money I'm paying. This is a a form for economic grid a cost effective plane there are lots of other types of grids like this that you'll see in the literature. But this one I think is the easiest one to understand so the question is when do you even need to do a pharmacoeconomic analysis. So in the center we have a, a comparator. And let's say this is a drug that's already on the market. And you're coming to market with a new drug. So what's your most likely comparator? We've put this in the center. And then you decide all right where's my product in relation to this comparator? Or where is it likely to be because we may not have eve, developed it yet? All right. So, is it in the, top left hand corner here, on top of here we have effectiveness and we have cost. Okay. As we go up the the cost increases, as we go to the right the effectiveness increases. So, if you're over here in this top left hand corner, you've got your drug is more costly and it's less effective. Do you want that drug? You really don't want to develop that drug to begin with, right? But you could end up, because you don't know how you're going to end up, right, in your clinical trials but this is not where you want to be. Okay. But if you do, then if I'm the payer, you're less costly, you're less, I'm sorry you're more costly you're less effective if I'm the payer do I even care about doing any kind of analysis? No I'm not going to do a pharmacoeconomic analysis I'm not going to do anything. If I'm down here in this bottom right corner and your new drug is less costly but is more effective. What am I going to do as a payer will I like that I say sure bring it on you know less cost more effective I'm I'm buying that you might want your drug to be there. Where we normally see new drugs is in the top right corner. You know, you you've gone to the trouble in your company to develop a drug you hopefully are going to develop a drug that is more effective. And you're reducing a charge a premium price. So from the payer's perspective, your drug is more costly and more effective. So what I've got to be able to do, as a payer is I want to be able to trade off how much more costly and how much more benefit am I getting from the greater cost. And that's the trade-off. And that's where I would want to do our pharmacoeconomic analyses. There's some reason to trade off cost and effectiveness. If your drug is down here on the bottom left hand corner, you're less costly and you're less effective, what do I think of that as a payer? You cost me less but you're less effective. [BLANK_AUDIO]. >> Do I want to buy your drug? >> Maybe. >> Maybe, why when might I want to? >> Might give an alternative to the less costly more effective because other options might be more costly. >> Right. I might have other choices and that's a good point. In all of these I'm usually looking at one versus another. There may be other choices I want to put in here too, okay? Just to simplify it. But I also might think how much less effective is it? Maybe it's just a little bit less effective for reducing the symptoms of Rinitis, runny nose. Just a little bit less effective, okay. Or maybe it's just a little bit less effective for reducing mortality rates. That's a big thing, right? It sort of depends on what your outcome is on whether that little less effective, how important that is. All right. So, you don't normally end up in this bottom left hand corner but you could. Most of what you're going to see you're going to see pharmacoeconomic analysis between two drugs. One's more costly than the other but it's more effective than the other. And you're trying to balance, what am I buying with that extra money. How much benefit am I getting? Alright. There are just to put this in a big global perspective from a drug development standpoint, there are pharmacoeconomic PE requirements across most countries now. And so, there are countries that have published recommendations, there are countries that have guidelines. This on the submission guidelines. They call them different things. But all it is, is really if you are a drug company and you have a new drug. You have to submit a docier to the decision makers in the country. And the docier has to include pharmacoeconomic data. It has to be able to say, alright you're asking this price, what are you giving me for this price? What's the value of your product? You know, what is better than the other product? So it's beyond just the clinical data, clinical safety and efficacy. It's economic and quality of life data. And that's what I'm going to show you some examples of. So it's not just an exercise, an academic exercise. This is absolutely required to get your drug marketed and to be reimbursed. You can get your drug approved in certain countries to be marketed but the country will not pay for it. It's not reimbursed yet until you submit a pharmacoeconomic, dossier and it's accepted and your price is accepted. Okay, so here's a model. This is called the ECHO model, on the bottom here. ECHO model is the Economic, Clinical and Humanistic Impact model. And it sort of sums up the whole thing with drug development and what we're trying to do with pharmaeconomics. So every clinical trial starts with a disease state. And it combines a group of patients with the disease state with a drug and we observe some clinical effect. And the clinical effect we observe is safety first, were there any huge adverse events, you know, are we doing any harm to the patients first? And then if we're not then the next thing to look at is efficacy. Does the drug actually work? Is it producing a reduced symptoms or improved mortality, improved morbidity? So this is where your typical clinical trial ends, all right. But then the pharmacoeconomic part comes next and says, okay. Because of those safety and efficacy effects that I observed, what happens? So what? And the so what is so what happened to the humanistic outcomes? This is health related quality of life. Yeah, what happened to the patient's quality of life because of the improved safety and efficacy? What happened to their satisfaction? You know, and economic outcomes. Because of this improved safety and efficacy, what happened to economic outcomes? Direct costs, we divide this up into direct costs and indirect cost. Now I'll show you some examples of these. But the whole point is this clinical safety efficacy is driving the humanistic and economic outcomes.
