COST EFFECTIVENESS Prof.

Mahmoud Alhaddad

ANALYSIS (CEA)
INTRODUCTION
CEA is a pharmacoeconomics tool which measures costs in dollars and
outcomes in natural health units that indicate an improvement in health
such as cures, lives saved, or blood pressure reductions.
This is the most pharmacoeconomic type found in the literature.
Advantages of using CEA is that health units are common outcomes
that are routinely measured in clinical trials, so they are familiar to
practitioners.
These outcomes do not need to be converted to monetary values.
A disadvantage of CEA is that the alternatives used in the comparison
must have outcomes that are measured in the same clinical units.
You can not use CEA to compare the outcomes of an antihypertensive
product (which may measure mm Hg changes to determine the
outcome) with the outcomes of an asthma product (which may measure
forced expiratory volume FEV to determine the outcome).
In addition, even if products for similar diseases or conditions are
compared, more than one clinical outcome may be important.
For example when measuring the effect of hormone replacement
therapies, the effect on menopausal symptoms as well as bone mineral
density measures may be salient.
This justify the presence of multiple cost effectiveness ratios for the
comparison.
REPORTING THE RESULTS
1. Costs and consequences are considered.
Present an explicit description of the costs and consequences used.
Present the perspective of the analysis
Present the methods and resources used to place monetary value on costs.

2. Cost-effectiveness ratios: C/E

Average cost-effectiveness ratio provides an estimate of the treatment
alternative divided by its effectiveness measure.
Example, if treatment cost $500 results in an effect 10 cases cured, the cost-effective
ratio is the cost divided by the effectiveness, 500/10 = $50 per case cured.
Incremental cost-effectiveness ratios (ICER) provide a more meaningful comparison
among treatments; calculated by dividing the difference in costs of two treatments by
the difference in effectiveness.
 Example: if a total treatment costs for drug A are $700 for 15 cases cured, and
drug B treatment costs are $400 for 12 cases cured, then
ICER = (700-400)/(15-12) = 300/3 = $100 for each additional case cured with
drug A.
ICER estimate the cost per unit of effectiveness of switching from one treatment to
another, or cost of using one treatment in preference to another.
Whereas cost-effectiveness ratios are used when we compare the use of one
treatment to do nothing (no treatment).