RESEARCH NOTE
INTRODUCTION
This is the third Research Note addressing pharmacoeconomics in prescribing research, reflecting
the increasing use of economic evaluation in drug
purchasing decisions in a variety of settings. In
this segment we provide an overview of the theoretical basis, practical application and methodological limitations of cost-effectiveness
analysis (CEA).
Box 1.
Key message box
Cost-effectiveness analysis is a technique to aid
decision-making at the margin.
Cost-effectiveness analysis is most readily applicable to
questions of technical efficiency questions of
allocative efficiency can only be addressed where
there is a common outcome measure.
Difficulties of interpretation can occur when
cost-effectiveness ratios are presented in terms of
surrogate or intermediate endpoints.
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R. Lopert et al.
Example
Appropriate technique
Allocative efficiency
Technical efficiency
Outcomes
Measure
Cost minimization
analysis
Cost effectiveness
analysis
Equivalent
None
Unidimensional
Natural units
(life-years gained)
Multidimensional
Health index
(quality adjusted
life years QALYs)
Multidimensional
Commensurate
($, 2, )
Cost utility
analysis
Cost benefit
analysis
2003 Blackwell Publishing Ltd, Journal of Clinical Pharmacy and Therapeutics, 28, 243249
Cost-effectiveness analysis
245
compared with some alternative, such as the treatment most likely to be replaced by the intervention.
A marginal CER refers to the change in costs and
health benefits from a one-unit expansion or contraction of service from a particular health care
intervention (2).
CostnA Costn1A
Marginal CER
EffectnA Effectn1A
A well-known example of marginal CEA is Neuhauser and Lewickis analysis of the sixth stool
guaiac test for screening of colon cancer (4). The
analysis demonstrated (see Table 3) that the cost of
detecting cancer with each subsequent test rises
exponentially so that the marginal CER of the sixth
test compared with the fifth test ($471 million per
addition cancer detected) may be 20 000 times the
average CER ($2451 per cancer detected).
An incremental CER represents the change in costs
and health benefits when one health care intervention is compared with an alternative one (2) (Table 4).
Incremental CER
CostA CostB
EffectA EffectB
Table 3. Average vs. marginal CERS the sixth stool guaiac test*
Cancers detected
Costs
Cost-effectiveness ratios
Tests
Number of
cases (A)
Marginal
cases (B)
Total
costs (C)
Marginal
costs (D)
Average
CER (C A)
Marginal
CER (D B)
1
2
3
4
5
6
659469
714424
719004
719385
719417
719420
649469
54956
04580
00382
00032
00003
$77 511
$107 690
$130 199
$148 116
$163 141
$176 331
$77
$30
$22
$17
$15
$13
$1175
$1507
$1810
$2059
$2268
$2451
$1175
$5492
$49 140
$469 150
$4 724 695
$47 107 214
511
179
509
917
024
190
Question
Intervention
Comparator
Cost-effectiveness
ratio
2003 Blackwell Publishing Ltd, Journal of Clinical Pharmacy and Therapeutics, 28, 243249
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R. Lopert et al.
Table 5. An incremental cost-effectiveness ratio using data from the GUSTO trial
t-PA
Streptokinase
Difference
One-year survival
910%
899%
$27 740
$24 895
1541 years
1527 years
11%
95% CI (046174%)
P 0006
$2845
$2845 0011 $258 636
014 years
$20 321
$32 678
In the Global Utilization of Streptokinase and Tissue Plasminogen Activator for Occluded Coronary Arteries (GUSTO) trial patients with
acute myocardial infarction who were treated with accelerated tissue plasminogen activator (t-PA) had a 30-day mortality that was 15%
lower than that of patients treated with streptokinase. This was equivalent to an absolute decrease of 1% in 30-day mortality. One year after
enrolment, patients who received t-PA had both higher costs ($2845) and a higher survival rate (an increase of 11%, or 11 per 1000 patients
treated) than streptokinase-treated patients. On the basis of the projected life expectancy of each treatment group, the incremental costeffectiveness ratio with both future costs and benefits discounted at 5% per year was $32 678 per year of life saved (21).
2003 Blackwell Publishing Ltd, Journal of Clinical Pharmacy and Therapeutics, 28, 243249
Cost-effectiveness analysis
247
Outcome
Combined risk of death,
AMI or unstable angina
Low molecular
weight heparin
Unfractionated
heparin
Relative risk
Absolute risk
difference
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R. Lopert et al.
2003 Blackwell Publishing Ltd, Journal of Clinical Pharmacy and Therapeutics, 28, 243249
Cost-effectiveness analysis
11.
12.
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2003 Blackwell Publishing Ltd, Journal of Clinical Pharmacy and Therapeutics, 28, 243249