Individuals lead intricate lives, where a multitude of elements determine their ability to afford necessary medication for treating illnesses. Similarly, our markets are equally complex entities, shaped by various factors. Globally, patients struggle with the medication’s exorbitant costs. In developing countries such as India, a surprising 85% of the overall expenses in health is covered by out-of-pocket household expenses. This signifies a major load on families and individuals. For many deprived individuals, there is a dilemma ongoing of prioritizing between the purchase of necessary medications or funds allocation towards food and other essential needs. The scarcity of resources combined with the steep prices of drugs forces them into difficult choices. Thus, the pricing of medicines holds immense significance.
The term “Pharmacoeconomics” was first introduced to the public in 1986 during a pharmacist meeting in Toronto, Canada. Ray Townsend from the Upjohn company used this term in his presentation. Prior to this, Ray and a few others had been conducting studies using the term “pharmacoeconomics” within the pharmaceutical industry since the early 1980s. Today, pharmacoeconomics research is a thriving field with numerous practitioners, an extensive research and application agenda, several dedicated journals, and active professional societies such as the International Society for Pharmacoeconomics and Outcomes Research.
Pharmacoeconomics (PE) is the thorough examination and evaluation of the expenses associated with drug therapy within healthcare systems and society. Specifically, pharmacoeconomic research involves the identification, measurement, and comparison of costs, risks, and benefits of various programs, services, or therapies. It aims to determine which option delivers the best health outcome for the resources invested. This means that for pharmacists the cost assessment of delivering a pharmacy service or product in relation to the achieved results, in determining the most favorable result for each dollar spent. This understanding can assist clinical decision-makers in the selection of the most cost-effective options of treatment.
Commonly utilized terms in pharmacoeconomics include pharmaceutical care and outcome research:
- Pharmaceutical care involves providing responsible drug therapy to achieve specific outcomes.
- Outcomes research can be broadly defined as investigations aimed at identifying, measuring, and evaluating the ultimate effects or results of healthcare services overall.
Global clinical trials are vital for pharmacoeconomics, offering crucial data for cost-benefit analyses, guiding healthcare resource allocation decisions in countries that are governed by government medical reimbursement policies and social securities. Global clinical trials are essential for demonstrating the value of new treatments, provide benefit-risk analysis and facilitate market access for innovative novel medicinal products. Pharmacoeconomic data generated from these trials are crucial for obtaining the right price for the medicinal product and the reimbursement decisions from the national authorities that are governed by reimbursement policies. Therefore, for a successful adoption in the market global clinical trials must consider both clinical endpoints and parameters of pharmacoeconomics.
Pharmaceutical manufacturers are involved in strategies of pricing under the influence of pharmacoeconomic considerations. Guidance is provided to pharmaceutical manufacturers by pharmacoeconomics in efficient resource allocation during the development of a drug. By the assessment of a new drug’s potential benefits economically relative to its costs, R&D efforts can be prioritized by pharmaceutical manufacturers on drugs that offer systems of healthcare and patients the greatest value.
Pharmacoeconomics’s concept understanding is critical not only for managers of health, policymakers, and administrators of health but also for primary care providers. In today’s India, there is an excess of new drugs, frequently belonging to the same class of old drugs with similar properties. This situation presents a challenge for physicians in deciding class and which brand can be prescribed. Before the initiation of a new drug therapy, addressing of three necessary questions must be done:
- Is the new drug’s effectiveness the same as or more than the universal treatment for the given ailment?
- What is the safety profile of the new drug and has a reputed organisation manufactured it?
- Does the new drug offer any economic benefits compared to existing options?
In inference, a crucial role is played by pharmacoeconomics in the decision making of healthcare by the evaluation of the treatment’s cost-effectiveness. Costs and results analysis allows pharmacoeconomics to provide significant insights into the optimization of allocation of resources and patient care improvement. By retaining the principles of pharmacoeconomics, informed choices can be made by systems of healthcare in achieving the dual goals of improving clinical consequences while efficiently managing costs.
