Applied Pharmacoeconomics: Putting Theory into Practice

1. Applied Pharmacoeconomics: Putting Theory into Practice Lisa A. Sanchez, Pharm.D. President PE Applications Good Afternoon! It�s a pleasure to be here today to speak with you about ...PE and its applications in the Real world. (Introduce self and give background) - PE Applications is a research, education and consulting company specializing in the practical application of PE - Prior to PE Apps, I was the Director of PE research at the BWH in Boston. Here I spent a lot of time in the area of oncology and especially evaluating antiemetic therapy. Thank you Liz for giving me the opportunity to speak with you today. Given today�s dynamic and cost-conscious HC environment, we as HC professionals should be familiar with PE and it�s P, M and Apps. WHY? The reason is clear�PE provides the means (tools) to quantify the VALUE of our profession�.a task that many of us are faced with daily. In my opinion, the biggest challenge facing pharmacy today, is how to take the principles and theoretical concepts of PE and put them into practice�..HOPEFULLY to make a difference!�.to MAXIMIZE the QUALITY of CARE delivered, per DOLLAR spent. We pharmacists are/should be attempting to meet this challenge We will covering the WHAT, WHERE, AND HOWs of Applied PE. Good Afternoon! It�s a pleasure to be here today to speak with you about ...PE and its applications in the Real world. (Introduce self and give background) - PE Applications is a research, education and consulting company specializing in the practical application of PE - Prior to PE Apps, I was the Director of PE research at the BWH in Boston. Here I spent a lot of time in the area of oncology and especially evaluating antiemetic therapy. Thank you Liz for giving me the opportunity to speak with you today. Given today�s dynamic and cost-conscious HC environment, we as HC professionals should be familiar with PE and it�s P, M and Apps. WHY? The reason is clear�PE provides the means (tools) to quantify the VALUE of our profession�.a task that many of us are faced with daily. In my opinion, the biggest challenge facing pharmacy today, is how to take the principles and theoretical concepts of PE and put them into practice�..HOPEFULLY to make a difference!�.to MAXIMIZE the QUALITY of CARE delivered, per DOLLAR spent. We pharmacists are/should be attempting to meet this challenge We will covering the WHAT, WHERE, AND HOWs of Applied PE.

2. Learning Objectives Describe basic PE principles and methods commonly used in hospital pharmacy practice Define �applied pharmacoeconomics� and it�s role in pharmacy today Discuss the application of PE to inform pharmacy decision-making Compare and contrast common strategies for applying PE to daily pharmacy practice Review an example of how PE can be applied to solve a �real-world� problem

3. PE Applications � Mission and Summary of Services Mission - To provide pharmacoeconomics and outcomes research, education, and consulting services to assess the value of pharmaceutical products and services in today�s healthcare systems. Summary of Services: Research services customized PE and OR studies site or population-specific economic models partnerships with HC organizations Educational services PE lectures and workshops PE educational materials Consulting services protocol design and strategic PE plans PE Applications is my own company that specializes in the PRACTICAL applications of PE in today�s practice settings. PE Applications was started about 5 years ago following my tenure with the BWH At BWH I was the director of PE research within the dept of pharmacy. I was also a voting member of P & T and responsible for guiding the department regarding the selection of pharmacy products and services at a departmental and organizational level. Various clients include pharmaceutical manufacturers, MCOs, hospitals and professional societies. My mission is basically to: Very brief summary of services for PE Apps. I have a brochure with more detail if you are interested. In general the services I provide fall into 3 categories: Research, Education and Consulting Research - primarily I partner with HC providers to conduct local PE/OR research using their patients data. Often this is prospectively done or using modeling with local retrospective databases. Education: This is primarily the development of workshops, lectures and other educational materials to assist practitioners in understanding PE data sources available to them and also how to use these data to make decisions. Ultimately to create sophisticated consumers of PE data. Consulting - this is the catch all category that encompasses everything else! PE Applications is my own company that specializes in the PRACTICAL applications of PE in today�s practice settings. PE Applications was started about 5 years ago following my tenure with the BWH At BWH I was the director of PE research within the dept of pharmacy. I was also a voting member of P & T and responsible for guiding the department regarding the selection of pharmacy products and services at a departmental and organizational level. Various clients include pharmaceutical manufacturers, MCOs, hospitals and professional societies. My mission is basically to: Very brief summary of services for PE Apps. I have a brochure with more detail if you are interested. In general the services I provide fall into 3 categories: Research, Education and Consulting Research - primarily I partner with HC providers to conduct local PE/OR research using their patients data. Often this is prospectively done or using modeling with local retrospective databases. Education: This is primarily the development of workshops, lectures and other educational materials to assist practitioners in understanding PE data sources available to them and also how to use these data to make decisions. Ultimately to create sophisticated consumers of PE data. Consulting - this is the catch all category that encompasses everything else!

4. Usually I get a few groans from the audience when I put this slide up�. However, to be sure we are all starting on the same page I want to review just a few basic concepts of PE and it�s application and also it�s evolution to date. Usually I get a few groans from the audience when I put this slide up�. However, to be sure we are all starting on the same page I want to review just a few basic concepts of PE and it�s application and also it�s evolution to date.

5. Basic PE Definitions Pharmacoeconomics: The description and analysis of the costs and consequences of pharmaceutical products and services and their impact on individuals, health care systems and society. (Bootman JL, 1995) Pharmaceutical care: The responsible provision of drug therapy for the purposes of achieving definite outcomes. (Hepler and Strand, 1990) Outcomes research: Broadly defined as studies that attempt to identify, measure and evaluate the end result of health care services in general. (Bootman JL, 1995) Let�s lay a foundation and define a few basic terms: Pharmacoeconomics is defined as�.. Essentially PE is the discipline of placing a value on drug therapy. Pharmaceutical care is defined as��. Basically this is the paradigm that pharmacy has opening accepted for our profession. Outcomes Research is defined as��. The term �outcomes� is so overused these days and used to describe just about everything these days, so important to know what outcomes really are and how we measure them.Let�s lay a foundation and define a few basic terms: Pharmacoeconomics is defined as�.. Essentially PE is the discipline of placing a value on drug therapy. Pharmaceutical care is defined as��. Basically this is the paradigm that pharmacy has opening accepted for our profession. Outcomes Research is defined as��. The term �outcomes� is so overused these days and used to describe just about everything these days, so important to know what outcomes really are and how we measure them.

6. The outcomes of healthcare can be characterized in a number of different ways One way is to divide them into clinical, economic and humanistic - Clinical are the medical events that occur as a result of a disease and treatment of that disease (safety, efficacy) - Economic are the direct, indirect and intangible costs associated with a disease and it�s treatment. - Humanistic is defined as the impact of disease of treatment on patients QOL, functional status.The outcomes of healthcare can be characterized in a number of different ways One way is to divide them into clinical, economic and humanistic - Clinical are the medical events that occur as a result of a disease and treatment of that disease (safety, efficacy) - Economic are the direct, indirect and intangible costs associated with a disease and it�s treatment. - Humanistic is defined as the impact of disease of treatment on patients QOL, functional status.

7. From a pharmacist perspective, there is a distinct relationship between outcomes, PE and pharm.care. I have tried to put this into a pictorial. - OR broadly attempts to measure the end results of HC services in general���..and PE is a division of OR - PE can be used to quantify the value of pharmacy products and pharmaceutical care services. - Pharmaceutical care is outcome oriented, intended to manage patient therapy so that positive outcomes are produced (and hopefully measured using OR!).From a pharmacist perspective, there is a distinct relationship between outcomes, PE and pharm.care. I have tried to put this into a pictorial. - OR broadly attempts to measure the end results of HC services in general���..and PE is a division of OR - PE can be used to quantify the value of pharmacy products and pharmaceutical care services. - Pharmaceutical care is outcome oriented, intended to manage patient therapy so that positive outcomes are produced (and hopefully measured using OR!).

8. PE as a discipline has evolved over the years. This slide offers a glimpse over the past 40 years. In the 1960s, PK helped pharmacy evolve from a primarily distributive to a more clinical discipline 1970�s was really the birth of PE and the first publications appeared in the mid 70�s 1980�s is when the cost containment mentality emerged and dominated much of the literature. Lot�s of misuse of terms, especially �CE� and �cost-savings� 1990 is when a more outcomes based approach to PE emerged and Applied PE takes off 2000 PE as a discipline has evolved over the years. This slide offers a glimpse over the past 40 years. In the 1960s, PK helped pharmacy evolve from a primarily distributive to a more clinical discipline 1970�s was really the birth of PE and the first publications appeared in the mid 70�s 1980�s is when the cost containment mentality emerged and dominated much of the literature. Lot�s of misuse of terms, especially �CE� and �cost-savings� 1990 is when a more outcomes based approach to PE emerged and Applied PE takes off 2000

9. This slide illustrates the various tools used in PE to quantify or place a value on drugs.This slide illustrates the various tools used in PE to quantify or place a value on drugs.

10. These are all methods used to quantify value and used to compare competing treatment alternatives CMA is Goal is primarily to determine the least expensive alternative, given that they are therapeutically equivalent. Commonly used for formulary mgmt of new agents in a class of drug. CBA is Goal is to be able to translate benefits of a treatment or service into $$ for means of comparison. Commonly used to justify value of pharmacy services. Results are expressed as a BC ratio or net costs CEA is Goal is to determine the cost per unit of effectiveness. Most common PE analysis today. CUA is Goal is to assess utility from patients perspective. Good for treatments that are life extending with serious side effects (e.g. Cancer chemo, arthritis etc.) CCA is also referred to as cost-offset analyses and is an informal type of PE analysis. These do not involve calculating a ratio; instead the total costs are summed and are reported separately from the outcome measures. These are conduced almost exclusively by providers and MCOs to understand how the use of a new drug impacts the use of other health care services. The purpose of a CCA is to determine whether the use of a drug produces an outcome that decreases costs and offsets the purchase price of the new therapy.These are all methods used to quantify value and used to compare competing treatment alternatives CMA is Goal is primarily to determine the least expensive alternative, given that they are therapeutically equivalent. Commonly used for formulary mgmt of new agents in a class of drug. CBA is Goal is to be able to translate benefits of a treatment or service into $$ for means of comparison. Commonly used to justify value of pharmacy services. Results are expressed as a BC ratio or net costs CEA is Goal is to determine the cost per unit of effectiveness. Most common PE analysis today. CUA is Goal is to assess utility from patients perspective. Good for treatments that are life extending with serious side effects (e.g. Cancer chemo, arthritis etc.) CCA is also referred to as cost-offset analyses and is an informal type of PE analysis. These do not involve calculating a ratio; instead the total costs are summed and are reported separately from the outcome measures. These are conduced almost exclusively by providers and MCOs to understand how the use of a new drug impacts the use of other health care services. The purpose of a CCA is to determine whether the use of a drug produces an outcome that decreases costs and offsets the purchase price of the new therapy.

11. Let�s talk about the Application of Pharmacoeconomics� Let�s talk about the Application of Pharmacoeconomics�

12. From my perspective, the real utility of PE lies in its application, especially by today�s pharmacy practitioners and decision-makers�.. To date, this has been the missing piece of the PE puzzle�.the missing link that pulls together all the concepts into a �user-friendly� discipline We have spent a lot of time developing the theory, methods and defining the principles, but not as much on how can we can take these principles, methods and theories to work for us in the real world. However, customers are asking for PE data and manufacturers should The real magic and utility in PE and outcomes, lies in it�s applications. To date, a great deal of attention has been paid to defining terms and developing methods, principles and theories. Unfortunately, not much attention has been paid to how these principles methods and theories can be applied to the daily practice of pharmacy. However, customers are asking for PE data and manufacturers should be actively responsive From my perspective, the real utility of PE lies in its application, especially by today�s pharmacy practitioners and decision-makers�.. To date, this has been the missing piece of the PE puzzle�.the missing link that pulls together all the concepts into a �user-friendly� discipline We have spent a lot of time developing the theory, methods and defining the principles, but not as much on how can we can take these principles, methods and theories to work for us in the real world. However, customers are asking for PE data and manufacturers should The real magic and utility in PE and outcomes, lies in it�s applications. To date, a great deal of attention has been paid to defining terms and developing methods, principles and theories. Unfortunately, not much attention has been paid to how these principles methods and theories can be applied to the daily practice of pharmacy. However, customers are asking for PE data and manufacturers should be actively responsive

13. �Applied Pharmacoeconomics� Defined as : �Putting pharmacoeconomic principles, methods and theories into practice, to quantify the �value� of pharmacy products and pharmaceutical care services utilized in �real-world� environments� Sanchez LA, 1997 As a result of the increased application of PE in the real wold, a few years ago I attempted to define this term. AP is defined as�. Here�s where we as practitioners and decision-makers take these principles and methods and put them to good use.As a result of the increased application of PE in the real wold, a few years ago I attempted to define this term. AP is defined as�. Here�s where we as practitioners and decision-makers take these principles and methods and put them to good use.

14. Now lets talk more specifically about where, where PE can and is being applied in the real world, by your pharmacy practitioners.Now lets talk more specifically about where, where PE can and is being applied in the real world, by your pharmacy practitioners.

15. First and foremost, PE is primarily used to inform decision making at a number of different levels. From a pharmacy perspective, these decisions can be splint into two basic areas: 1. Drug therapy evaluations and 2. To justify pharmacy services. The literature reflects a shift over the years from mostly applying PE for drug therapy evaluations to using it for the justification of pharmacy servicesFirst and foremost, PE is primarily used to inform decision making at a number of different levels. From a pharmacy perspective, these decisions can be splint into two basic areas: 1. Drug therapy evaluations and 2. To justify pharmacy services. The literature reflects a shift over the years from mostly applying PE for drug therapy evaluations to using it for the justification of pharmacy services

16. Again, the most popular application of PE is to inform decision-making. To help DM make better, more informed, and more complete decisions regarding pharmaceuticals. In my opinion, complete clinical and pharmacy decisions should assessments of three primary outcomes: Clinical, Economic AND Humanistic whenever possible. Traditionally, most clinical decisions were based solely on the Clinical outcomes associated with a product or service (clinical outcomes are the medical events, that occur as a result of a disease or treatment) Over the past 10-15 years, it has become very in-vogue to assess the economic outcomes associated with a product or service (economic outcomes are the direct, indirect and intangible costs associated with a disease and it�s treatment) Most recently, the trend is to bring the patient back into this decision-making equation and assess the humanistic outcomes (humanistic outcomes are the impact of disease on patient functioning and QOL) Pharmacoeconomics provides us with the means of quantifying these outcomes and the tools to assess these outcomes to make a better, more complete decision. Again, the most popular application of PE is to inform decision-making. To help DM make better, more informed, and more complete decisions regarding pharmaceuticals. In my opinion, complete clinical and pharmacy decisions should assessments of three primary outcomes: Clinical, Economic AND Humanistic whenever possible. Traditionally, most clinical decisions were based solely on the Clinical outcomes associated with a product or service (clinical outcomes are the medical events, that occur as a result of a disease or treatment) Over the past 10-15 years, it has become very in-vogue to assess the economic outcomes associated with a product or service (economic outcomes are the direct, indirect and intangible costs associated with a disease and it�s treatment) Most recently, the trend is to bring the patient back into this decision-making equation and assess the humanistic outcomes (humanistic outcomes are the impact of disease on patient functioning and QOL) Pharmacoeconomics provides us with the means of quantifying these outcomes and the tools to assess these outcomes to make a better, more complete decision.

17. This slide illustrates some of the specific TYPES of decisions where PE has been successfully applied. (BRIEFLY describe each) There are numerous examples of each of these in the literature todayThis slide illustrates some of the specific TYPES of decisions where PE has been successfully applied. (BRIEFLY describe each) There are numerous examples of each of these in the literature today

19. Now lets talk about HOW��.HOW can YOU put pharmacoeconomics to work for you in the real world. Let�s face it�.from our perspective, that�s what it�s all about.Now lets talk about HOW��.HOW can YOU put pharmacoeconomics to work for you in the real world. Let�s face it�.from our perspective, that�s what it�s all about.

20. Strategies for Putting Theory into Practice Strategy 1: Interpret, critique, and use results from studies published in the literature Strategy 2: Utilize economic modeling Strategy 3: Conduct a local observational PE evaluation There are 3 common strategies that I used most in my practice at the BWH and currently. They are�.. We will discuss the advs and disadvs of each of these shortly. Important to note that these are all potential PE data sources.There are 3 common strategies that I used most in my practice at the BWH and currently. They are�.. We will discuss the advs and disadvs of each of these shortly. Important to note that these are all potential PE data sources.

21. When attempting to apply the findings from a published study to justify or implement a clinical pharmacy service you need to: 1) Become a �Sophisticated Consumer� of PE studies This can be accomplished by: Understanding the advantages and limitations of this data source and by being familiar with guidelines/recommendations 2) Assess the magnitude of decision on cost and quality 3) Critically evaluate study, using basic criteria or a checklist 4) Select appropriate method to apply study results (E.g., apply results at face value, utilize sensitivity analysis, replicate study on smaller scale, incorporate data into model, use meta analysis) When attempting to apply the findings from a published study to justify or implement a clinical pharmacy service you need to: 1) Become a �Sophisticated Consumer� of PE studies This can be accomplished by: Understanding the advantages and limitations of this data source and by being familiar with guidelines/recommendations 2) Assess the magnitude of decision on cost and quality 3) Critically evaluate study, using basic criteria or a checklist 4) Select appropriate method to apply study results (E.g., apply results at face value, utilize sensitivity analysis, replicate study on smaller scale, incorporate data into model, use meta analysis)

22. How do Rph assess the the value of a drug or service? HOW is PE applied to DM?? The answer is IT DEPENDS! There is quite a spectrum in terms of ways MDM assess value. They range from simple/remedial comparisons of acquisition costs�. The strategy that is selected varies based on the impact of the potential decision on cost of care and quality of care. For example, if it is expected that a decision will have little to no impact on quality of care or cost, then you can utilize a less rigorous method or technique such as lit. review or simple SA. However, if the decision will have moderate to severe impact on quality and cost, then a more rigorous method like retrospective database study or prospective PE evaluation, may be necessary.How do Rph assess the the value of a drug or service? HOW is PE applied to DM?? The answer is IT DEPENDS! There is quite a spectrum in terms of ways MDM assess value. They range from simple/remedial comparisons of acquisition costs�. The strategy that is selected varies based on the impact of the potential decision on cost of care and quality of care. For example, if it is expected that a decision will have little to no impact on quality of care or cost, then you can utilize a less rigorous method or technique such as lit. review or simple SA. However, if the decision will have moderate to severe impact on quality and cost, then a more rigorous method like retrospective database study or prospective PE evaluation, may be necessary.

23. Quantifying the value of pharmacy products and services using PE evaluations has greatly increased in popularity, as evidenced by the increasing number of publications. This leads us to our first strategy: Using the current published literature. The actual number of studies published has increased dramatically over the past 30 years, and in 1993 there were approximately 35,000 papers published on this topic. With a plethora of studies published and available to pharmacy practitioners, the literature can be a powerful source of PE data. However, prior to using these data to influence local decision-making, pharmacists must understand the limitations and benefits of the literature as a data source and application strategy.Quantifying the value of pharmacy products and services using PE evaluations has greatly increased in popularity, as evidenced by the increasing number of publications. This leads us to our first strategy: Using the current published literature. The actual number of studies published has increased dramatically over the past 30 years, and in 1993 there were approximately 35,000 papers published on this topic. With a plethora of studies published and available to pharmacy practitioners, the literature can be a powerful source of PE data. However, prior to using these data to influence local decision-making, pharmacists must understand the limitations and benefits of the literature as a data source and application strategy.

24. Strategy 1: Use the Literature ADVANTAGES Data often plentiful Quick Inexpensive Subject to peer-review Variety of results can be examined Results from RCT DISADVANTAGES Results from RCT (costs may be protocol driven) External validity Placebo-controlled Misuse of PE terms Variations in quality of studies published The literature can be a rich source of information when used appropriately. There are many advantages associated with the literature as PE data source. If any published studies exist (relevant to your setting and conducted rigorously) then this strategy can provide data quickly and inexpensively. Most often, studies that are published in reputable journals have been peer-reviewed (I.e. other experts in the field reviewed the paper and determined that the methodology employed and study contents are rigorous and potentially relevant for that journal�s readers.) Another advantage is that if more that one study exists, addressing your specific topic of interest, then a variety of results can be examined. This may give you increased confidence in the findings. Finally, quite often studies published in peer-reviewed journals are reports of RCT�s. These are usually large scale studies that employ rigorous study methods. These trials are usually powered to detect statistically significant differences, thus lending credibility to the findings. Disadvantages The first disadvantage is that data published may have been generated from an RCT. While, adequate sample sizes are ensured, PE data collected in this manner can be protocol driven (collected under �ideal� and �controlled� conditions) and may not be reflective of using a drug under �real-world� conditions. Also, results reported in these studies can be difficult to generalize to other practice settings due to deviations from the study protocol and differences in practice patterns, patient populations, and drug acquisition costs. The eagerness of many healthcare professionals to conduct PE evaluations, has at times outpaced the rigor by which many of these have been conducted. Thus, wide variations in quality and rigor of studies published, as well as rampant misuse of PE terms like �cost-effectiveness�, has been well documented in both the pharmacy and medical literature sources. You should be intimately familiar with these in order to appropriate apply these data to your local decisionsThe literature can be a rich source of information when used appropriately. There are many advantages associated with the literature as PE data source. If any published studies exist (relevant to your setting and conducted rigorously) then this strategy can provide data quickly and inexpensively. Most often, studies that are published in reputable journals have been peer-reviewed (I.e. other experts in the field reviewed the paper and determined that the methodology employed and study contents are rigorous and potentially relevant for that journal�s readers.) Another advantage is that if more that one study exists, addressing your specific topic of interest, then a variety of results can be examined. This may give you increased confidence in the findings. Finally, quite often studies published in peer-reviewed journals are reports of RCT�s. These are usually large scale studies that employ rigorous study methods. These trials are usually powered to detect statistically significant differences, thus lending credibility to the findings. Disadvantages The first disadvantage is that data published may have been generated from an RCT. While, adequate sample sizes are ensured, PE data collected in this manner can be protocol driven (collected under �ideal� and �controlled� conditions) and may not be reflective of using a drug under �real-world� conditions. Also, results reported in these studies can be difficult to generalize to other practice settings due to deviations from the study protocol and differences in practice patterns, patient populations, and drug acquisition costs. The eagerness of many healthcare professionals to conduct PE evaluations, has at times outpaced the rigor by which many of these have been conducted. Thus, wide variations in quality and rigor of studies published, as well as rampant misuse of PE terms like �cost-effectiveness�, has been well documented in both the pharmacy and medical literature sources. You should be intimately familiar with these in order to appropriate apply these data to your local decisions

25. Strategy 2: Use Economic Modeling ADVANTAGES Inexpensive Quick Yields organization-specific results Bridges efficacy to effectiveness Data collection is unobtrusive Increased ability to generalize results DISADVANTAGES Results dependent on assumptions Potential for researcher bias Controversial Reluctance of decision-makers to accept results May require a meta-analysis of the literature When the literature is not sufficient and perhaps you need not conduct a prospective study, modeling the impact of a pharmacy product or service can be useful. Economic modeling often employs decision analysis and can be relatively inexpensive to prepare. Use of models can provide support for various decisions, esp. those which are time-contingent. Models can use data from various sources available within (internal) and from outside (external) a specific hospital and generate results that are org-specific. Economic modeling can be used to bridge the gap between efficacy and effectiveness. Further, data collection is unobtrusive. Disadvantages include the potential for bias (researcher and others). Models are built using some assumptions so the results are dependent on these assumption. For this reason they can be controversial and there may be a reluctance of decision makers to accept findings at face value. Keys to successful models are 1) reasonable and defendable assumptions and 2) transparency of model.When the literature is not sufficient and perhaps you need not conduct a prospective study, modeling the impact of a pharmacy product or service can be useful. Economic modeling often employs decision analysis and can be relatively inexpensive to prepare. Use of models can provide support for various decisions, esp. those which are time-contingent. Models can use data from various sources available within (internal) and from outside (external) a specific hospital and generate results that are org-specific. Economic modeling can be used to bridge the gap between efficacy and effectiveness. Further, data collection is unobtrusive. Disadvantages include the potential for bias (researcher and others). Models are built using some assumptions so the results are dependent on these assumption. For this reason they can be controversial and there may be a reluctance of decision makers to accept findings at face value. Keys to successful models are 1) reasonable and defendable assumptions and 2) transparency of model.

26. Strategy 3: Conduct a Local Observational Study ADVANTAGES Flexible Yields provider-specific data Reflects �usual care� or effectiveness Usually offer comparative data Data from multiple sources can be used Are less expensive than RCT DISADVANTAGES Expensive (time and $) Difficult to control and randomize Potential for patient selection bias Small sample size May be difficult to generalize results to other patient populations and providers When there is not enough info in the literature or modeling is not appropriate,we may be challenged to conduct our own local PE evaluations. However, this decision should not be made lightly. Again, many advantages and disadvantages associated with this application strategy. Advs include the flexibility to decide what is compared and in which patient populations. The results will be specific to your org and more reflective of �usual care� or effectiveness. Also, you can incorporate data from multiple sources available within and outside a HC institution and these study�s are generally less expensive than RCT�s. However, there is still some expense to this strategy as compared to the previous two..in terms of time and money. In the real world, it can be difficutl to randomize subjects and tightly control�thus leading to the potential for patient selection bias. Also many of these studies are plagued with small sample sizes making it hard to detect statistically significant differences (ss vs. clinical relevance). Lastly, it can be difficult to generalize results to other institutions so choose your targets wisely. Save this strategy for decisions with potential for significant impact on org costs and quality of patient care. When there is not enough info in the literature or modeling is not appropriate,we may be challenged to conduct our own local PE evaluations. However, this decision should not be made lightly. Again, many advantages and disadvantages associated with this application strategy. Advs include the flexibility to decide what is compared and in which patient populations. The results will be specific to your org and more reflective of �usual care� or effectiveness. Also, you can incorporate data from multiple sources available within and outside a HC institution and these study�s are generally less expensive than RCT�s. However, there is still some expense to this strategy as compared to the previous two..in terms of time and money. In the real world, it can be difficutl to randomize subjects and tightly control�thus leading to the potential for patient selection bias. Also many of these studies are plagued with small sample sizes making it hard to detect statistically significant differences (ss vs. clinical relevance). Lastly, it can be difficult to generalize results to other institutions so choose your targets wisely. Save this strategy for decisions with potential for significant impact on org costs and quality of patient care.

27. This slide contains some additional PE data sources or application strategies you can use to solve PE problems and assist in local decision-making. (TIME PERMITTING�IF NOT, A GOOD REFERENCE)This slide contains some additional PE data sources or application strategies you can use to solve PE problems and assist in local decision-making. (TIME PERMITTING�IF NOT, A GOOD REFERENCE)

28. Let�s talk for a few minutes about some examples from the real-world�how do you take these strategies and use them in practice.Let�s talk for a few minutes about some examples from the real-world�how do you take these strategies and use them in practice.

29. Targets for Local PE Evaluations Biotechnology agents New expensive agents Newly marketed agents Controversial agents New �me-too� agents New and existing clinical pharmacy services There are many obvious targets for PE evaluations in our HC organizations today. This slides lists some of the major targets to date.There are many obvious targets for PE evaluations in our HC organizations today. This slides lists some of the major targets to date.

30. Example One: Drug Therapy Evaluation (literature review) A literature review of t-PA vs. streptokinase for AMI was conducted to assess to assist in formulary management A variety of studies were critically evaluated and interpreted using 11 basic criteria These data were input into an economic model (using decision analysis) and customized to better reflect �real world� care at a specific organization Results lead to acceptance of organizational policy and formulary management decision favoring the use of t-PA in the organization ($32,000 per life year saved) There are numerous examples of PE study�s in the literature. This is an example of one that was conducted while I was at the BWH using the 14 step process. The citation is Sanchez LA. There are numerous examples of PE study�s in the literature. This is an example of one that was conducted while I was at the BWH using the 14 step process. The citation is Sanchez LA.

31. Criteria for Evaluating the Quality of a PE Study Study objective Study perspective Study method (type of analysis) Study design Treatment interventions (comparators) Costs and consequences (outcomes) Study results Discounting (adjusting for differential timing) Sensitivity analysis Study conclusions Sponsorship

32. Example Two: Drug Therapy Evaluation (conduct local study) A local CEA of stratified doses of ondansetron for CIE was conducted from a provider�s perspective, using a 14-step process Demographic, clinical, economic and humanistic outcomes data were collected Stratified dosing regimens were cost-effective, yielding equivalent clinical and humanistic outcomes Results lead to acceptance of organizational policy and dosing guidelines, realizing an annual cost-savings >$300,000 There are numerous examples of PE study�s in the literature. This is an example of one that was conducted while I was at the BWH using the 14 step process. The citation is Sanchez LA. There are numerous examples of PE study�s in the literature. This is an example of one that was conducted while I was at the BWH using the 14 step process. The citation is Sanchez LA.

33. Process for Conducting a Local PE Evaluation Designed specifically for hospital pharmacy applications Adapted from Jolicoeur LM, et al. 1992 and Sanchez LA, 1995 Incorporates steps of decision analysis Process can be used to guide PE evaluations to assess the �value� of pharmacy products and services For example, lets assume you are interested in conducting your own local PE evaluation. A step-wise process can be of great use to you in providing guidance on how to conduct a study. The process I promote and use is really geared and designed for use in hospitals or MC settings and was adapted from two different publications�Jolicoeur et al 1992 and Sanchez 1995. This process consists of 14 steps and also incorporates the use of decision analysis, when appropriate. These steps are listed on the next two slides.For example, lets assume you are interested in conducting your own local PE evaluation. A step-wise process can be of great use to you in providing guidance on how to conduct a study. The process I promote and use is really geared and designed for use in hospitals or MC settings and was adapted from two different publications�Jolicoeur et al 1992 and Sanchez 1995. This process consists of 14 steps and also incorporates the use of decision analysis, when appropriate. These steps are listed on the next two slides.

34. I will briefly review these with you then during our next teleconference, we will go through each step, applying it to an IV to PO (or streamling) example. Step one. The PE problem must be clearly and concisely defined, as well as measurable. A well-defined problem is half-solved. Step two. Create a cross functional team to provide assistance with project and early �buy-in� by target individuals & groups. This team should be multidisciplinary and include professionals who may be impacted by study results (e.g. RPh, MD, RN, admin, etc.) Step three: Determine the study perspective. This is very important as the results of your study are highly dependent on the perspective taken. Various perspectives include patient, institution, payer or society. Step four: Determine the treatment alternatives being compared and their relevant outcomes to be measured. Step five: Once you�ve identified the treatment alternatives and outcomes being compared (in step 4) then you can select the appropriate PE method (CMA, CBA, CEA, CUA) Step six: Place a monetary value on outcomes. May need to include more than just acquisition drug costs and include various other costs such as supply costs. Lab costs, personnel costs and ALOS. Step seven: Identify the resources and data sources necessary to complete your study in a timely and efficient wayI will briefly review these with you then during our next teleconference, we will go through each step, applying it to an IV to PO (or streamling) example. Step one. The PE problem must be clearly and concisely defined, as well as measurable. A well-defined problem is half-solved. Step two. Create a cross functional team to provide assistance with project and early �buy-in� by target individuals & groups. This team should be multidisciplinary and include professionals who may be impacted by study results (e.g. RPh, MD, RN, admin, etc.) Step three: Determine the study perspective. This is very important as the results of your study are highly dependent on the perspective taken. Various perspectives include patient, institution, payer or society. Step four: Determine the treatment alternatives being compared and their relevant outcomes to be measured. Step five: Once you�ve identified the treatment alternatives and outcomes being compared (in step 4) then you can select the appropriate PE method (CMA, CBA, CEA, CUA) Step six: Place a monetary value on outcomes. May need to include more than just acquisition drug costs and include various other costs such as supply costs. Lab costs, personnel costs and ALOS. Step seven: Identify the resources and data sources necessary to complete your study in a timely and efficient way

35. Process for Conducting a Local PE Evaluation (continued) 8. Establish probabilities of outcomes 9. Use decision analysis (when appropriate) 10. Perform discounting and/or sensitivity analysis 11. Present the results to appropriate groups 12. Develop a policy or intervention 13. Implement and educate 14. Document �value� through follow-up Step 8: Identify the probabilities that the outcomes (from step 4) may actually occur in your study population. Step 9: DA can be used to structure a PE evaluation, thus use when appropriate. A decision tree can graphically display treatment alternatives, their outcomes and the probabilities of those outcomes occurring. Using �averaging out and folding back� all of these variables can be reduced into a ratio for ease of comparison. Step 10: Discount costs and/or perform a SA. For example, costs and consequences that occur in the future must be discounted back to their present value. SA tests the robustness of your study results by varying sensitive variables over a range of plausible values. Step 11: Results should be presented to the appropriate groups using appropriate medium. Step 12: Take the results and develop a policy or intervention that can maintain quality of care , possibly at a cost-savings. Step 13: Implement policy and educate other HC professionals using a variety of communication strategies. Step 14: After a policy or intervention has been implemented, collect some follow-up data.Step 8: Identify the probabilities that the outcomes (from step 4) may actually occur in your study population. Step 9: DA can be used to structure a PE evaluation, thus use when appropriate. A decision tree can graphically display treatment alternatives, their outcomes and the probabilities of those outcomes occurring. Using �averaging out and folding back� all of these variables can be reduced into a ratio for ease of comparison. Step 10: Discount costs and/or perform a SA. For example, costs and consequences that occur in the future must be discounted back to their present value. SA tests the robustness of your study results by varying sensitive variables over a range of plausible values. Step 11: Results should be presented to the appropriate groups using appropriate medium. Step 12: Take the results and develop a policy or intervention that can maintain quality of care , possibly at a cost-savings. Step 13: Implement policy and educate other HC professionals using a variety of communication strategies. Step 14: After a policy or intervention has been implemented, collect some follow-up data.

36. Example Three:Justify a Clinical Pharmacy Service Pharmacy wants to implement/justify an IV to PO program A CBA of a target drug program, using data from literature AND data collected locally, was conducted Results revealed a B/C ratio ranging from 12:1 - 20:1 Service was successfully implemented with an average compliance rate of 75% One FTE expected to be approved to manage service Data expected to be used to support PUD and CAP disease management efforts Here�s anther example of using PE to justify the value of pharmacy. However, this is a PE evaluation of a pharmacy service: IV to PO streamlining service. This is the example we will use in our next teleconference in Feb (I believe).Here�s anther example of using PE to justify the value of pharmacy. However, this is a PE evaluation of a pharmacy service: IV to PO streamlining service. This is the example we will use in our next teleconference in Feb (I believe).

37. Conclusions Applied PE has been the �missing link� in pharmacy PE principles and methods can be successfully applied in the �real world� to enhance decision-making PE can be applied to any therapeutic area, using a variety of application strategies Application of PE to the �real world� is a new dimension, challenge and opportunity for hospital pharmacy