Pharmacoeconomics

Pharmacoeconomics (pronounced: far-muh-koh-ee-kon-uh-miks) is a sub-discipline of Health Economics that focuses on the cost-effectiveness of pharmaceutical products and services. The term is derived from the words "pharmaco-" from the Greek "pharmakon" meaning "drug", and "-economics", from the Greek "oikonomia" meaning "management of household affairs".

Pharmacoeconomics is an important field of study in Healthcare as it helps in making informed decisions about the allocation of resources in the healthcare sector. It involves the comparison of two or more pharmaceutical interventions by comparing the cost (expressed in monetary terms) and the effects (expressed in terms of monetary value, efficacy or enhanced quality of life).

History

The field of Pharmacoeconomics developed in the late 20th century as a response to the need to control healthcare costs while maintaining the quality of care. The increasing costs of drug development and the need for effective healthcare delivery have made Pharmacoeconomics an integral part of health policy.

Methods

Pharmacoeconomic studies utilize several types of economic evaluations, including Cost-Minimization Analysis (CMA), Cost-Effectiveness Analysis (CEA), Cost-Utility Analysis (CUA), and Cost-Benefit Analysis (CBA).

Applications

Pharmacoeconomics is used in decisions about price setting, reimbursement and patients' access to medicines. It is also used in health technology assessment agencies, hospital formulary committees, and individual patient decisions.

Related Terms

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Pharmacoeconomics