24 MIKEE MELAD 2F PHARMACY

PHARMACOECONOMICS

Costs are calculated to estimate the resources (or inputs) that are used in the production of an outcome. Pharmacoeconomic studies categorize costs into four types. Direct medical costs are the most obvious costs to measure. These are the medically-related inputs used directly in providing the treatment. Examples of direct medical costs would include costs associated with pharmaceutical products, physician visits, emergency room visits, and hospitalizations. Direct nonmedical costs are costs directly associated with treatment, but are not medical in nature. Examples include the cost of traveling to and from the physician's office or hospital, babysitting for the children of a patient, and food and lodging required for patients and their families during out-of-town treatment. Indirect costs involve costs that result from the loss of productivity due to illness or death. Please note that the accounting term indirect costs, which is used to assign overhead, is different from the economic term, which refers to a loss of productivity of the patient or the patient's family due to illness. Intangible costs include the costs of pain, suffering, anxiety, or fatigue that occur because of an illness or the treatment of an illness. It is difficult to measure or assign values to intangible costs. Treatment of an illness may include all four types of costs. For example, the cost of surgery would include the direct medical costs of the surgery (medication, room charges, laboratory tests, and physician services), direct nonmedical costs (travel and lodging for the preoperative day), indirect costs (cost due to the patient missing work during the surgery and recuperative period), and intangible costs (due to pain and anxiety). Most studies only report the direct medical costs. This may be appropriate depending on the objective of the study or the perspective of the study. For example, if the objective is to measure the costs to the hospital for two surgical procedures that differ in direct medical costs (e.g., using high-dose versus low-dose aprotinin in cardiac bypass surgery), but that are expected to have similar nonmedical, indirect, and intangible costs, measuring all four types of costs may not be warranted.

In order to determine what costs are important to measure, the perspective of the study must be determined. Perspective is a pharmacoeconomic term that describes whose costs are relevant based on the purpose of the study. Economic theory suggests that the most appropriate perspective is that of society. Societal costs would include costs to the insurance company, costs to the patient, and indirect costs due to the loss of productivity. Although this may be the most appropriate perspective according to economic theory, it is rarely seen in the pharmacoeconomic literature. The most common perspectives used in pharmacoeconomic studies are the perspective of the institution or the perspective of the payer. The payer perspective may include the costs to the third-party plan, the patient, or a combination of the patient copay and the thirdparty plan costs.