A Brief Description of Pharmacoeconomics

Pharmacoeconomics is a young science that will improve with application. Its need is undeniable, especially in developing countries. Pharmacoeconomics is a sub-discipline of the field of health economics, which itself is a relatively new sub-discipline of economics, only formerly appearing in the economics scientific literature since the 1960s. Accuracy of cost-effectiveness estimates depends on the quality of input variables; validity of surrogate end points; and appropriateness of modelling assumptions, including model structure, time horizon and sophistication of the model to differentiate clinically and economically meaningful outcomes. Economic analysis alongside pivotal clinical trials are often inconclusive due to the suboptimal collection of economic data and protocol-driven costs. The two fundamental components of pharmacoeconomic studies are measures of costs and measures of outcomes that are combined into a quantitative measure or ratio. It can be done using various methods like Cost-minimization analysis (CMA), Cost-effectiveness analysis (CEA), Cost-utility analysis (CUA), and Cost-benefit analysis (CBA). Cost involves all the resources that are used to produce and deliver a particular drug therapy.The need for pharmacoeconomic evidence has fundamentally changed the strategic imperatives of research and development (R&D). Therefore, professionals in pharmaceutical R&D have to be familiar with the principles of pharmacoeconomics, including the selection of health policy-relevant comparators, analytical techniques, measurement of health gain by quality adjusted life-years and strategic pricing of pharmaceuticals.