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Looking beyond the formulary budget in cost-benefit analysis
1University of Oklahoma Colleges of Pharmacy and Medicine, Oklahoma City 73117, USA.
The American Journal of Managed Care
|January 7, 1997
Summary
Newer psychotropic medications may offer significant healthcare cost savings despite higher initial prices. Analyzing total treatment costs reveals pharmacoeconomic benefits, including reduced hospitalizations and fewer adjunctive prescriptions.
Area of Science:
- Pharmacoeconomics
- Psychiatry
- Health Economics
Background:
- Rising costs of newer psychotropic medications necessitate value assessment.
- Focusing solely on drug acquisition cost provides an incomplete economic picture.
- Comprehensive cost-benefit analysis is crucial for healthcare decision-making.
Purpose of the Study:
- To evaluate the overall cost-effectiveness of newer psychotropic medications.
- To determine if increased medication expenses are offset by reduced healthcare utilization.
- To provide data for healthcare providers and managed care administrators regarding drug value.
Main Methods:
- Review of pharmacoeconomic studies, including retrospective and prospective designs.
- Analysis of total treatment costs, encompassing medication, hospitalization, and other healthcare services.
- Case study examining the cost impact of risperidone in schizophrenia treatment.
Main Results:
- Increased medication costs for newer agents can lead to overall healthcare cost reductions.
- Significant savings observed in a risperidone study, despite higher drug expenses.
- Reduced hospitalizations, shorter lengths of stay, and decreased use of other services contribute to cost offsets.
Conclusions:
- Pharmacoeconomic evaluations are essential for understanding the true value of psychotropic medications.
- Considering all treatment costs provides a more accurate assessment of drug cost-effectiveness.
- Newer psychotropic drugs can be cost-effective when total healthcare expenditures are analyzed.