PopHealthcare Exam 1

Standard Gamble advantages

"Gold standard"; foundations in economic theory

Rating Scale (NOT USED MUCH)

"Thermometer" rated 0 (Death) to 1 (Perfect Health) that respondents mark with their utility for a given disease

what does the utility range represent?

0-1 (death-perfect health)

Discounting Sensitivity analysis range

0-10% (0= no time preference, 10= steep time preference)

Need to discount if follow patient for more than

1 year

Steps in Calculating QALYs

1. Develop scenario of the disease state of interest 2. Choose a method for determining utilities 3. Choose subjects for utility assessment 4. Multiply length of life for each option by the appropriate utility to obtain QALYs

CUA Step 3: Choose Subjects

1. General population: Perspective of society; fits economic theory, Can they really comprehend choices with which they have no training or experience through a scenario? 2. Caregivers (e.g., of dementia patients and very young children): Unknown 3. Health care providers: Most commonly used in published studies Yet, their utilities shown to diverge from patients; Often times providers rate disease states lower than patients. 4. Patients with the disease state: Tend to rate their state more highly than society, low levels of knowledge about other health states with which to balance ratings of their own disease state.

Standard Gamble: Forced choice between 2 alternatives

1. Treatment with a risk of either immediate (1) return to normal health (p) or immediate (2) death (1-p), such that p + (1-p) = 100% 2. Certain outcome of a chronic disease state for life based on the person's life expectancy Probabilities are varied until the respondent is indifferent between the 2 choices (either is OK).

Discount factor =

1/(1+r)^t r = discount rate t = number of years in the future that the cost or savings occur

In the US, anything less than or equal to $_____ is cost-effective

150,000

Medical intervention rates are typically

3 - 5 %

A new drug extends life but with greater toxicity that causes symptoms such as nausea, muscle weakness and fatigue. You work for the manufacturer of the drug product and have been asked to design a pharmacoeconomic analysis to make the new drug look as favorable as possible. Assuming that the journal editors will publish any method you use, which one of the one of the following will make the drug look the best? A. Average cost-effectiveness ratio using life years gained B. Average cost-utility ratio C. Incremental cost-effectiveness ratio using life years gained D. Incremental cost-utility ratio

A

Aspinall and colleagues (2013) study of pharmacist-managed ESA clinics found that costs and effectiveness per patient over 5 years was $13,412 and 2.096 QALYs per year in pharmacist-managed ESA clinics and $16,173 and 2.093 QALYs per year in standard care. Should you calculate the incremental cost-utility ratio for this study? Choose the single best answer. A. No, because the pharmacist-managed ESA clinic is dominant. B. No, because that is the wrong method to use. The right method is the average cost-utility ratio. C. Yes, because this is a cost-utility analysis and the data for the incremental cost utility ratio are provided. D. No, we do not have enough information to calculate the ratio.

A

Does cost-utility analysis incorporate all side effects and potential adverse events associated with drug therapies? A. Yes, for example by asking patients to choose between life in perfect health for a short time or life with a carefully defined disease state for a shorter period, we incorporate all aspects of life and a disease-treatment pair. B. No, cost-effectiveness is the only type of analysis that will incorporate each effect and a new equation is required for each one. C. No, we exclude side effects because they vary greatly by patient and often reflect inappropriate medication use. D. Yes, it requires us to use the societal perspective, so all outcomes and costs are included.

A

Given the following information and a discount rate of 5%, what is the present value of costs occurring over a 3-year period with costs assessed at the beginning of each year? Year 1 Costs = $5,000 Year 2 Costs = $3,000 Year 3 Costs = $4,000 Total Costs = $12,000 A. $11,485 B. $11,400 C. $11,004 D. $12,350

A

Let us assume that the new flu vaccine is available in a more expensive nasal spray as well as an injection. The mean costs of the vaccines are: Nasal spray: $ A, and Injection: $ B The mean present values of the QALYs associated with the vaccines are: Nasal spray: C, and Injection: D What is the incremental cost utility ratio for nasal spray versus injection? Give the single best answer. A. $A - $B / C -D B. $C -B/ $B -D C. C - D/$A - $B

A

On rotation, your preceptor asks you to co-author a pharmacoeoconomic analysis of trial of medication therapy management in patients with serious mental illness and cardiovascular disease. She plans to present outcomes from the 6-month trial at the next ASHP Mid-Year meeting. Your job is to assign costs to the resources used during the trial. You notice that the costs are from different years: 2017, 2016, 2015 and 2014. Which one of the following should you do? A. Choose a year in which to express the costs (e.g., 2017) and then calculate the value of each year's costs in 2017 dollars. B. Discount all of the costs because they occur over more than one year. C. Discount all of the outcomes because they occur over more than one year. D. None of these.

A

On rotation, your preceptor asks you to work on a pharmacoeoconomic analysis of a pragmatic trial of Collaborative Drug Therapy Management (CDTM) compared to standard care alone in patients with serious mental illness and cardiovascular disease over a 6-month period. She provides you with a list of costs and the source for each. You notice that the costs are from different years: 2017, 2016 and 2014. What must you do first? Choose the single best answer. A. Standardize the costs. B. Discount the costs. C. All of these. D. None of these.

A

Patients with diffuse large B cell lymphoma may enter remission after getting CAR-Ts only to relapse later. A study presented at the American Society of Clinical Oncology meeting in San Diego in December, 2018 found that only 39% of patients with diffuse large B cell lymphoma who entered remission after receiving CAR-T (Yescarta) therapy remained cancer free after 2 years. The cost of CAR-T (Yescarta) is $373,000 per course of treatment per patient. To improve these odds there are 2 choices that can be added to CAR-T (Yescarta): (1) Immediately after successful treatment with CAR-T (Yescarta), a stem cell transplant at a cost of about $1 million per patient may forever prevent recurrence. Patients typically have a normal life expectancy afterwards with mean utilities of 0.80 for future years. (2) When and if the cancer returns, an infusion, Keytruda (which removes the cloak used by tumor cells to hide from the immune system), can be used at a cost of $150,000 per year. It isn't approved for lymphoma, but insurance companies sometimes agree to pay for it. Patients typically survive on Keytruda but must continue with regular infusions until in remission again which reduces mean utilities to 0.70. What is the incremental cost-utility ratio for Yescarta + stem cell transplant compared to Yescarta + Keytruda in a 53 year-old black American male with a life expectancy of 22 years? Assume a discount rate of 5% and a standardization rate of 2%. A. [($373,000 + $1,000,0000) - ($373,000 + ($150,000 * (1/1+0.05)21)] / [(0.80 * 22 * (1/1+0.05)21) - (0.70 * 22 * 1/1+0.05)21)] B. [($373,000 + $1,000,0000) - ($373,000 + ($150,000 * (1/1+0.05)21)] / [(0.80 * 22) - (0.70 * 22)] C. [($373,000 + $1,000,0000) - ($373,000 + ($150,000 * (1/1+0.02)21)] / [(0.80 * 22) - (0.70 * 22)] D. [($373,000 + $1,000,0000) - ($373,000 + ($150,000 * (1/1+0.05)21)]

A

The "gold standard" perspective in pharmacoeconomics is which one of the following? A. Societal B. Payer C. Provider D. Patient and Family

A

The Excelsior Drug Company has developed a new antibiotic that is effective against c difficile infections. This drug, ZapCDiff, has a mean cost per cure of $2,000 compared to standard therapy which has a mean cost per cure of $500. ZapCDiff has a cure rate of 98%, while standard therapy has a cure rate of only 65%. What is the incremental cost effectiveness ratio of ZapCDiff compared to standard therapy? A. ($2,000-$500)/(0.98-0.65) = $4,546 per additional cure. ZapCDiff costs $4,546 more per additional cure compared to standard therapy. B. ($2,000/0.98) - ($500/0.65) = $1272 per additional cure. ZapCDiff costs $1,272 more per additional cure than standard therapy. C. (0.98 - 0.65)/($2,000 - $500)= 0.001 additional cures per $1 spent. D. ZapDiff is dominant.

A

When we adjust costs for inflation in pharmacoeconomics, what is our source for the correct rate? Choose the single best answer. A. Medical Consumer Price Index (MCPI) B. Gross Domestic Product (GDP) C. Bank interest rate D. Debt ratio (national)

A

Which of the following ranges of CUA thresholds per QALY is routinely used by ICER? A. $50,000 - $200,000 B, $0- $100,000 C. $0- $50,000 D. $100,000 - $200,000

A

Which pharmacoeconomic study design is most often used to estimate the burden of disease in populations? A. Cost of illness B. Cost effectiveness analysis C. Cost analysis D. Cost benefit analysis

A

Cost-Utility Analysis of a Pharmacotherapy Follow-Up for Elderly Nursing Home Abstract:Objectives To compare the cost-effectiveness of a pharmacotherapy follow-up for elderly nursing home (NH) residents with that of usual care. Design Prospective observational study with a concurrent control group conducted over 12 months. Setting Fifteen NHs in Andalusia assigned to control (n = 6) or intervention (n = 9). Participants Residents aged 65 and older. InterventionPharmacotherapy follow-up. Measurements Negative outcomes associated with medication, health-related quality of life, cost, QALY, and incremental cost-effectiveness ratio (ICER). Results 332 elderly residents were enrolled: 122 in the control group and 210 in the intervention group. The general practitioner accepted 88.7% (274/309) of pharmacist recommendations. Pharmacist interventions reduced the average number of prescribed medication by 0.47 drugs ( p < .001), whereas the average prescribed medication increased by 0.94 drugs in the control group ( p < .001). Both groups reported a lower average EuroQol-5D utility score after 12 months (intervention, −0.0576, P = .002; control, −0.0999, P = .003). Usual care dominated pharmacotherapy follow-up basd on a threshold of €30,000/ QALY ($38,487/ QALY). Conclusion Pharmacotherapy follow-up is considered cost-effective for elderly NH residents in Spain. Based on your knowledge of the Rascati questions for reviewing the pharmacoeconomic literature, which of the following are problems with this abstract? SATA. A. The title does not specify that the study was conducted in Spain (rather than the US). B. The conclusion (pharmacotherapy follow-up is cost-effective in Spain) is not supported by the results and threshold. C. Costs do not appear to have been discounted or standardized, which was required based on the study design. D. The title says this is cost-utility but the abstract describes only a cost-effectiveness analysis.

A, B

A teenager who previously had good grades begins performing poorly at his public high school and has been disciplined several times for inappropriate and threatening behavior. He is now facing summer school (provided free of charge by the public school system) and may be held back a year. He has not seen a doctor or received any health care since his last required physical for school 13 months ago. For the purposes of this test, let us assume that in this case this behavior is due to an undiagnosed and untreated mental health condition(s). Let us also assume that there have been no costs incurred other than those listed in this description. Which of the following best describes the pharmacoeconomic costs for this case for the past 12 months? Select all that apply. A. Productivity costs B. Direct Medical Care Costs C. Patient and Family Costs D. Other sector costs

A, D

What is aduhelm used to treat?

Alzheimer's disease

Cost Minimization Analysis (CMA)

Assumes that 2 interventions produce identical health outcomes. So, only costs are measured and compared

A pharmacist wants to assess the utility associated with being paralyzed from the waist down. She finds that, on average, her subjects report being indifferent between living for 20 more years in perfect health or 30 years in a wheelchair. What type of utility assessment method must she have used? A. Standard Gamble B. Time Trade Off C. Rating Scale D. SF6D

B

Which of the following is the most common perspective seen in articles about pharmacoeconomics and cost-effectiveness and why is that? A. Societal, because it is required by Medicare. B. Health system, because academics publish and most clinical faculty have the greatest access to data in this setting. C. Health insurance company, because they invest in these studies to provide evidence that supports their formulary decisions. D. Employer, because they pay for most commercial health benefits and are interested in the value they get.

B

Which of the following price benchmarks per QALY is routinely used by ICER? A. $50,000 B. $150,000 C. $200,000 D. $300,000

B

Which one of the following is the "gold standard" method for assessing utility? A. Time Trade-off B. Standard Gamble C. Rating Scales D. Mapping Short Form 36 using SF6D

B

Imagine that there are 2 treatments available for middle age. "Newbie" is a 6-month treatment costing $10,000 per month that is effective in 40% of cases and reduces physical age by a mean of 10 years. "Rejuvie" is a 3-month treatment costing $5,000 per month that is effective in 25% of cases and reduces physical age by a mean of 5 years. Which one of the following is the expression for the incremental cost effectiveness ratio (ICER)? A. Newbie is dominant so we would not calculate the ICER B. ($10,000/0.40 * 10 years) - ($5,000/0.25 * 5 years) C. [(6 months * $10,000) - (3 months* $5,000)] / (0.40 - 0.25) D. (6 months * $10,000/0.40) - (3 months * $5,000/0.25)

C

what type of method would hypertension control be?

CEA

_____ only appropriate if comparing generically available product and just trying to compare 2 manufacturers producing the same product

CMA

Considered the gold standard in economics.

CUA

if QAL is mentioned in a study, the method is always ____ regardless of the title

CUA

Standard Gamble disadvantages

Cognitively demanding for subjects Few treatments are "cures" (but the method assumes a cure) Difficult to assess more than 1 condition at once Best done face-to-face (i.e., expensive)

Which studies not are considered pharmacoeconomic methods?

Cost of illness and CMA: they either assume health outcomes (including adverse effects and effectiveness) are identical across therapies or they do not attempt to measure and include health outcomes

4 Methods of Analyses

Cost-minimization analysis (CMA) Cost-effectiveness analysis (CEA) Cost-benefit analysis (CBA) Cost-utility analysis (CUA)

As Director of Pharmacy for the Best Health System, you are wondering if the new IV cancer drug, Excelsior, is a good value compared to standard treatments already on the hospital formulary. Which one of the following methods would best answer that question? Select the single best choice. A. cost-minimization analysis B. cost of illness analysis C. cost-consequence analysis D. cost-utility analysis

D

Let us assume that a vaccine for whooping cough is expected to save the lives of 4 of every 100 infants at age 10. The discount rate is 3%. Which one of the following formulas represents the present value of the lives saved by the vaccine? A. 4 B. 4/100 C. 4/ 100 * (1 + 0.03)4 D. 4/ (1 + 0.03)10 E. None of the above. Present value only applies to costs not lives saved.

D

Perspective

Determines whose costs are relevant. Choice of perspective is determined by the purpose of the study.

Rating Scales disadvantages

Difficult to incorporate time explicitly (but time can influence ratings) Known bias: avoidance of the end of the scales.

Cost: Traditional Categories

Direct medical costs Direct non-medical costs Indirect costs Intangible costs

Cost of Illness Studies types of costs

Direct: Costs associated with prevention/treatment (medical costs) Indirect: Productivity costs (e.g., from reduced or unemployment of the patient)

A method for adjusting future costs to present values to account for the time preference of money. Medical intervention rates are typically 3 - 6 % Sensitivity analysis is required

Discounting

The value of money is related to time, beyond the rate of inflation.

Discounting

_____ is required for any future cost/benefit streams.

Discounting

Time Trade-Off (TTO) 2 alternatives

Disease state until death for life expectancy (t) Perfect health for x (where x< t) Vary time x until respondent is indifferent Utility = x/t

CEA advantages

Easily measured Clinically relevant

Time Trade-Off (TTO) disadvantages

Face-to-face administration recommended

Present Value =

Future Cost * Discount Factor (1/(1+r)^t) r = discount rate t = number of years in the future that the cost or savings occur

Cost: Alternative Categories

Health care sector costs Other sector costs Patient and family costs Productivity costs

Cost-Utility Analysis

Health outcomes are measured in incremental quality-adjusted life years gained (QALYs).

Incremental Cost Effectiveness Ratio (ICER)

ICER = (Cost A - Cost B)/(Outcomes A - Outcomes B)

Cost of ____ and Cost _____ studies may use the same methods as pharmacoeconomics to estimate costs, but they are not considered pharmacoeconomic methods because they either assume health outcomes (including adverse effects and effectiveness) are identical across therapies or they do not attempt to measure and include health outcomes.

Illness, Minimization

CBA advantages

Immediately clear whether or not benefits > costs Diverse programs and benefits can be compared No subjective decision-making

Alternative Categorization of Costs: Rationale

Inconsistent use of traditional cost categories in the literature Confusion with accounting costs Accounting: Indirect costs = overhead costs Economics: Indirect costs = productivity costs

Rating Scales advantages

Many disease states assessed simultaneously No face-t0-face interaction (i.e., less expensive) Less cognitively demanding method (for subjects) Patients generally find it acceptable

Timing Adjustments for Costs: Rationale

Many studies draw cost data from more than one data source, and often from different years. Even if all costs were drawn from the same data source and year, authors will likely need to adjust costs to current values in papers/reports.

the cost of producing one extra unit

Marginal Cost

Methods of Standardization

Method A: Step 1: Measure units (e.g., doses). Step 2: Assign costs from a single year. OR Method B: If units are unavailable, then multiply all costs by the medical inflation rate for the year specific to each data point. Medical Consumer Price Index (CPI) inflation rates Medical CPI typically 4 -5 % per year

CBA disadvantages

Monetizing outcomes (i.e., life and health) is difficult More than 1 method for monetizing life and health exists, and each method may give somewhat different results.

Time Trade-Off (TTO) advantages

More adaptable to disease states than Standard Gamble Incorporates time in the state more readily than Rating Scales

Why is the Payer/Hospital Perspective Most Commonly Used?

Most studies of 2 or more drug treatments expect the only significant cost differences to occur in direct medical costs Other costs are likely much smaller (i.e., relatively insignificant) and are often very difficult to measure Timeliness matters, yet societal costs take considerable time to estimate and require everyone to agree on estimation prior to report or publication approval/acceptance

CUA advantages

Multiple diseases or outcomes can be compared No need to monetize outcomes: CBA requires Best for comparing treatments for a single disease when the choice of treatment affects only quality of life

Calculating QALYs

Multiply Utilities by the Length of Life for Each Option to Obtain QALYs

Cost of Illness Studies disadvantages

No consensus re: methods for measuring costs Studies have found results with multifold differences

Cost Utility Analysis (CUA)

Outcome = quality adjusted life years (QALYs) gained QALYs = years of life * utility ("happiness") Where utility ranges from 0 (death) to 1 (perfect health)

Cost Effectiveness Analysis (CEA)

Outcomes = 1 natural unit only (mmHg or adherence or symptom-free days or years of life saved, etc.)

Cost Benefit Analysis (CBA)

Outcomes: Monetized (e.g., US $)

Standard Gamble: p =

P(normal health) = utility

Other sector costs

Prisons Housing Schools Public assistance Homemaker services Etc.

Cost of Illness Studies

Purpose: To show the burden of disease 1 disease across populations (HIV in US vs. Zimbabwe) 2 diseases in same population (obesity vs. migraine in US workers)

CUA advantage

QALYs reflect mortality and quality of life

what does the outcome measure for ICUR?

QALYs, NOT UTILITIES

Standardization (Adjustment) of Costs

Required for any cost from a data source more than 1 year old All costs in a study should be valued at the same point in time (i.e., year).

Which perspective is the gold standard? Which is seen most in articles?

Societal, Health System

CEA disadvantages

Some interventions affect more than 1 clinical outcome. How can we make decisions about allocating limited resources across hypertension versus cancer medications (for example)? We have to use opinion (but we'd rather use equivalent units and math).

Give respondents 2 choices a certain risk of death versus a guaranteed long life with disease. At what point are they indifferent?

Standard Gamble

How much reduction in total life are you willing to give up in order to live in perfect health?

TTO

Give respondents 2 choices regarding a specific duration shorter life in perfect health versus a specific long life with disease. At what point are they indifferent?

Time Trade-off

Cost of Illness Studies applications

To determine market potential (US pharma) To inform payer priorities for reimbursement

CUA disadvantages

Utility is difficult to ascertain Most providers and decision makers do not yet understand and accept utility assessment

Indirect costs = overhead costs

accounting

CPI =

adjust for inflation = standardization

ICUR of new drug compared to Aduhelm is $400,000 for QALY: a. this is cost-effective b. this is not cost-effective c. this is DEFINITELY not cost-effective c. not enough information

c

Direct medical costs

co-pays, deductibles, OTC, etc.

Patient perspective costs

copays, deductibles, travel, productivity costs, etc.

For drugs, the discounted average wholesale price is sometimes used to estimate "____" of a drug (dispensing may be estimated separately)

cost

Societal Perspective costs

cost to produce the care + patient out of pocket payment + patient costs

Hospital perspective costs

cost to produce the care provided

The gold-standard metric for value in pharmacoeconomics is _____ which balances opportunity cost (not price) adjusted for time preferences from the societal perspective against health outcomes, specifically adjusted years of life (gained from one treatment compared to the next best treatment) and the quality of those years.

cost-utility analysis

When bringing future costs to the present, ______ is needed

discounting

If one drug is cheaper and works better, it is ____. You do not need to calculate anything (negative number).

dominant

Indirect costs = productivity costs

economics

Are PE studies more interested in efficacy or effectiveness

effectiveness

"Utility" is a term for "______" in economics

happiness

Understand diseases, but estimate lower utility scores Most commonly used

healthcare professionals

Cost is usually ____ than the price or "charges"

less

cost to a hospital of caring for a patient is typically ____ than the amount paid, and much lower than that charged to those who must pay cash (i.e., the uninsured).

lower

New treatment is DOMINANT if it is either:

more effective and less costly, more effective at same price, or safe effectiveness at lower price

Adacanumab accelerated approval pathway

only drug of it's type available for alzheimer's disease

"Intangible costs" are not costs, but rather measures of patient ____.

outcomes

standard gamble utility=

p= success 1-p= death 80% chance of surviving kidney transplant (p=0.8=utility) chance of death (1-p -> 1-0.8=20% chance of death)

Usually biased and estimate higher utility scores than general public

patients

Payer perspective costs

reimbursement to hospitals + patient out-of-pocket

Gold-standard perspective

societal

gold standard perspective is always ____

societal (everything included)

May not be familiar with specifics of disease states

society

Live rest of life in current health state; or "take a pill (with risks) to be restored to perfect health"

standard gamble

alternative 1 is the treatment with 2 possible outcomes: the return to normal health or immediate death; alternative 2 is the certain outcome of a chronic disease state for life

standard gamble

needed when cost are estimated from info collected >1 year before the study (even when using retrospective data) Uses MCPI (medical consumer price index) = 3-5%

standardization

Incremental Cost

the difference in cost between competing treatment options (e.g., Drug A & Drug B)

Cost = Opportunity Cost =

the value of the best-forgone option or the "next best option"

alternative 1 is a certain disease state for a specific length of time (t) and then death; alternative 2 is being health for x time (<t)

time trade off

Direct non-medical costs

travel, meals out, etc.

Quality of life is represented by "____"

utility

Time Trade-Off (TTO): Utility =

x/t x= perfect health t= disease state until death for life expectancy