Pharmacoeconomics & Future Expectations

Mar 12th, 2011 | By admin | Category: Farmaskop Yazıları

While the reimbursement of health expenses from goverment budgets appear to be extremely tough, limited funding sources get scarcer day by day. The efficacy & safety claims are now replaced by cost effectiveness approach. Briefly; “better care at better cost” is the future vision.

No one could bias the importance of health but everyone will agree that it has a cost. When we look at the economic profiles of developed countries, we notice that health expenditures accelerate more than any other item. The situation is roughly the same for developing and OECD countries. As the aging population increases, patients’ quality of life expectations rise and newly introduced molecular technologies boost healthcare budgets; the decision makers and payers try to find a way of allocating the funds efficiently1.

Current Situation

If you examine the lifelong interactions of healthcare professionals and pharmaceutical industry we recognize that a different pattern has been growing recently. Almost one decade ago, the efficacy and safety of a drug was the discussion area. However in daily circumstances it is questioned by the real life effectiveness. The discovery of innovative and valuable new products has opened a window of opportunity for many diseases. This has also led to a more sophisticated reimbursement system where cost effectiveness and thresholds are the major players. However, the authorities and payers reached a decision question or an assertive verdict: “Can I – should I reimburse this medication on behalf of public benefit?” Briefly, cost effectiveness and budget impact way of thinking, has become the comprehensive dominant strategy, where many unmet needs remain unclear beyond 2000s1.


After introducing the true story I want to describe pharmacoeconomics and its components. The term pharmacoeconomics can be defined as: measuring or evaluating the utility of limited resources (by prioritizing accessibility and equity principles) in order to maximize health services and investments while increasing quality of life2. The first studies on pharmacoeconomics has began in US at seventies (1970) and rapidly absorbed by a wide range of decision makers in Australia, Canada and European Union. Soon after the ethical and clinical benefits of these methodoligies are proved; Canada, Portugal, Netherlands and Finland executed mandatory guidelines, followed by voluntary procedures in US, Denmark, Ireland, Iceland, Switzerland and Sweden3.

Pharmacoeconomics does not aim – deal with reducing healthcare costs or saving allocated funds. It analyses the therapeutic costs to the society2.

Pharmacoeconomics derives the methodology of describing, measuring and comparing expenses in universal values. In order to make a scientific decision whether a health related procedure is cost effective and productive to other alternative interventons, we need evidence based statistical analysis. It also indicates that instead of spending resources to a certain disease, any different prophylactic or therapeutic area may be more beneficial to the economy and society as a whole2.

One of the most sriking mistakes while calculating the cost of a medicine is taking the unit value and evaluating by multiplication tables. In fact only the global cost gives an idea, the other way does not make any sense.

Pharmacoeconomical Perspective:

The cost of a drug should be evaluated as the economical burden or benefit that it creates in a certain therapeutic area4. For example Drug A may have a 60% lower unit price than Drug B but when we consider; physician visits, hospital admissions, laboratory and imaging tests, and surgery probabilities Drug B may require less of these items thus leading to a lower cost. In addition to these, Drug B may provide a better quality of life by ease of use, reducing pain scores and adverse event rates5. We need to emphasize once again that; one of the most sriking mistakes while calculating the cost of a medicine is taking the unit value and evaluating by multiplication tables. In fact the global cost gives an idea, the other way does not make any sense. This is how it Works in developed countries with sophisticated health services5.

The QALY Concept:

There is another very important but unresolved issue regarding to our country: The QALY.

Many health care professionals, primarily oncologists seek an answer to the famous question: “What must the threshold be for any medicine that I will prescribe for the treatment of a certain disease?” On the other hand goverments must decide to what extend they will compansate…

At that point we face the concept “Quality Adjusted Life Year” abbreviated as QALY”. QALY is a unique component that indicates both the mortality (time) and morbidity (quality) of a health state in one standart measure. It is a universal value to illuminate health related outcomes4. Many of the countries have established QALY values so they can carry out more scientific – statistical and deontologic ways to treat their patients.

The estimated values for some countries are: US 50.000 $, Canada 25.000 – 75.000 Canadian $ (ranging acoording to the severity of the disease), United Kindom 30.000 £. However for catastrophic diseases like cancer the threshold can be modulated (for example: in US approximately 100.000 US $). Although Netherlands designated a value of 20.000 € per year, a discussion is being conducted about catastrophic diseases to be reimbursed up to 100.000 €. Briefly, many of the colleaques in different countries have clear cut guidelines prepared by goverment and scientific associations. One of the most emerging situation for us, is to create such a functional infrastructure6.

In some platforms health professionals discuss the threshold value for Turkish QALY. Unfortunately the suggestions could not pass away from wishfull thinkings that are not based on any economical evidence. There has been a proposal that it should be twice or three fold of gross domestic product (GDP) per capita. In these circumstances there appears different values year by year which are highly affected by Turkish economical fluctuations. For example the GDP per capita was 2.368 $ in 2002. If we take the three fold of this amount we face 7.104 $ which derives an impossible consequence for most of the chronic treatments. GDP per capita was 5.216 $ in 2006 that generates a QALY of 15.648 $. We recognize that the threshold dublicates itself in 4 years of Turkish history7.

Years GDP per Capita (US $)
2002 2368
2003 3396
2004 4240
2005 4964
2006 5216

The term QALY is originated from US. Actualy it is the exact annual sum of expenses of a dialysis patients. As it would be fatal not to treat a dialysis patient, this amount has been established as the threshold of reimbursement. According to Turkish Ministry of Health data (2006); the annual cost of a dialysis patient is 23.000 US $. Consequently the monetary value of Turkish QALY is not hard to predict. However, once again we want to emphasize that the designated threshold is to be rearranged for catastrophic diseases like cancer.


I have mentioned that healthcare spendings should at least be 5% of the whole GDP as recommended by WHO8. The drug expenditures is a major column and rational usage must be taken into account. National and international guidelines should be taken as reference and pharmacoeconomic analyses should be carried out in a multidisciplinary manner. During the pricing and reiumbursement steps, pharmacoeconomical analysis bring a broader view not only for the payer but also for the society, customers and end users. Cost effectiveness concept must be one of the main discussion points amongst physicians.

Instead of using multiplication tables derived from unit prices; pharmacoeconomic models that simulate the global therapeutic effect, prevalence of a certain disease, economical developments, real life effectiveness and adverse event rates should be taken into consideration.

Turkey is landed in 779.454 square meters, almost double size of Germany and Netherlands9. Approximately 73 million people occupy this peninsula. When we diversify people, we see that 66% or them live in urban areas where the ratio is 77% for EU. Compared to EU Turkey has a very young population, people under the age of 14 is about 37% (EU average is 14%). Most importantly aging population is quite lower than EU (16%), only 5%9. What we can interprete from these numbers is that: Turkey has a young, potential population where idle ratio is low and can be perceived as a country prone to productivity. However there some deficiencies coming from our historical bacground. Turkey has not undertaken the industrial reforms and Reuneissance period of European countries. Our current situation has been provided without these technological, social and cultural steps. As a result of this we need time to establish our infrastructure not only in health but in many other industrial sectors also.

In terms of health care expenditures I would like to emphasize three major topics:

As a consequence of economical sciences budgets are set as targets and these targets can be exceeded. Whatever strategies goverments try to implement health related expenses will increase due to innovative technologies and societies’ rising expectations. Briefly; “better care at beter cost” is the future vision6.

Pharmacoeconomical approach is the key driver of building the bricks of this mission. Models evaluating the cost effectiveness of any medication via analysing different variables should be put into practice as soon as possible. The only role does not belong to decision makers and goverment unless the pharmaceutical industry participate. As Roche; we have been the pioneer by implementing some global models and conducting pharmacoeconomy symposia. Our projects will accelerate in 2007.

While deciding on any treatment, physicians are expected to consider pharmacoeconomic evaluations. This will reduce health related expenses while increasing the quality of outcomes. It will not be a wishfull desire to foresee that a new era is being added to our environment while many patients stil seek cure continuously.


1. Menke TJ, VA Health Economics Seminar, 2000
2. Türk Farmakoloji Derneği
3. Prof. Dr. Nurettin Abacıoğlu, 2005
4. ISPOR Book of Terms, 2003
5. Giseal Kobelt, Health Economics Textbook, 2002
6. JJ Zambrowski 2006
7. Devlet Planlama Teşkilatı İstatistikleri, 2006
8. WHO, Genova, 2004
9., 26.09.2006

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