Cost-benefit and cost-effectiveness analysis of drug therapy

A model for cost-benefit analysis and cost-effectiveness analysis (CBA-CEA) of pharmaceutical intervention is presented, and CBA-CEA research methods reported in the literature are reviewed. The cost versus benefit and the cost effectiveness of drug therapy can be analyzed in societal as well as private terms. Since CBA measures costs and outcomes in monetary terms, it can be used to compare net benefits of all types of interventions. CEA, however, can be used only in comparing alternative interventions that can produce a similar health outcome. Research activities needed for identification of treatment protocols, alternative therapies and their respective outcomes, and resource use are described. Quantification of benefits and costs is discussed and inherent strengths and weaknesses of CBA-CEA are summarized. For the wide variety of research activities involved in CBA-CEA, the expertise of economists, physicians, clinical pharmacists and pharmacologists, epidemiologists, sociologists, and psychologists is needed. Inherent in CBA-CEA for drug therapy are judgments, either by analysts or by policy decision makers, about how to value life, pain, anxiety, and happiness and how to distribute health-care resources. When results of CBA-CEA are presented and interpreted with care, this analysis can be an important tool for policy decision makers.