. Essentials of pharmacoeconomic
This exercise is adopted from your textbook: Rascati, K. (2013). Essentials of
pharmacoeconomics. Lippincott Williams & Wilkins.
You are interested in comparing the costs and outcomes over 1-year time period of preventive
strategies for postmenopausal women with osteoporosis. You plan to compare three options:
1) Oral Cal-More, 10 mg/day
2) Nasal Cal-More, 200 IU/day
3) Long-acting Cal-More, 70 mg once a week. (Note: These are not real product names.).
The main outcome measured is incidence of bone fracture and the effect on QALYs. Each year,
about 5% of the patients taking once-a-day oral Cal-More have a fracture (95% do not), about
10% of those taking nasal Cal-More experience a fracture (90% do not), and 5% of those taking
long-acting Cal-More experience a fracture (95% do not). The cost of treating a fracture is
$3,000, and a fracture decrease a person’s QALY by 0.5 QALYs. Once-a-day oral Cal-More
causes gastrointestinal (GI) complications in 5% pf the patients. Nasal Cal-More causes nasal
irritation or bleeding in 10% of the cases. Once-a-week oral Cal-More causes GI complications
in 2% of the patients.
The average cost of treating GI complications is $200, and QALYs are decreased by 0.2. the
average cost of treating nasal problems is $100, and QALYs are decreased by 0.1.
The costs per year of the three medications are:
• Once-a-day oral Cal-More = $600
• Once-a-day Nasal Cal-More = $800
• Once-a-week oral Cal-More = $1,000
1) Draw a decision tree (3 points)
2) Calculate path probabilities (1 Point)
3) Calculate the average QALYs for each treatment (1 Point)
4) Calculate the average cost for each treatment (1 Point)
5) Calculate the average cost per QALYs for each treatment (1 Point)
6) Calculate the ICER between treatment options oral once a day and nasal once a day (1
Point)
7) Calculate the ICER between treatment options oral once a day and oral once a week (1
Point)
8) Provide your conclusion (1 Point)
Hint: individual has perfect health has 1 QAL
Sample Solution
1) Decision Tree: Start / | \ O-D N-D L-A-W / |\ / \ |\ F/N F/N F/N F/N C/NC C/NC
2) Path Probabilities: Oral Once a Day = 95% no fracture, 5% fracture and 5% GI complications; Nasal once a day = 90% no fracture, 10% fracture and 10% nasal irritation or bleeding; Long acting oral once a week= 95% no fracture, 5%fracture, 2 % GI complications.
3) Average QALYs for each treatment: Oral once a day= 0.945QALYs; Nasal once a day= 0.89QALYs; Long acting oral once per week= 0.895QALYs.
4) Average Cost for each treatment: Oral Once a Day = $600 ; Nasal Once Day = $800 ; Long Acting Oral Once Per Week=$1000 .
5) Average Cost Per QALYs For Each Treatment: Oral Once A Day = $636.84 , Nasal Once A Day =$893.26 ,Long Acting Oral Once Per Week=$1113.79 .
6) ICER between treatment options oral once a day and nasal once a day : ($800-$600)/(0.89-0.945)= -$133/.055=-2418..18 .The ICER suggests that the oral option is more cost effective than the nasal option since the value is negative ($133).
7) ICER between treatment options oralonceadayandoralonceaweek : ($1000-$600)/(0.895-0.945)= -$400/-0.05=-8000 The ICER suggests that the daily option is more cost effective than the weekly one since the value is negative (-8000).
8) Conclusion :In conclusion, based on the analysis performed above comparing three options of preventive strategies for postmenopausal women with osteoporosis (oral Cal More taken daily at 10mg dose, nasal Cal More taken daily at 200IU dose and long acting Cal More taken weekly at 70 mg dose), it can be concluded that taking an oral medication on daily basis is most cost effective for preventing bone fractures in postmenopausal women with osteoporosis as compared to taking either nasal or long acting form of same medication respectively due to its lower incremental costs per quality adjusted life year gained (ICER).