7. Economic Evaluations

Economic evaluations are increasingly being conducted alongside clinical trials in an effort to better inform decision makers of the economic value (i.e., return on investment) of the clinical intervention(s).The International Society for Pharmacoeconomics and Outcomes Research (ISPOR) has developed Good Research Practices guidelines on cost-effectiveness analysis alongside clinical trials. Visit ISPOR website to learn more about the guidelines.

Cost of illness, cost-effectiveness/utility/benefit, and budget impact analysis are the main types of economic evaluation. Cost-effectiveness/utility analysis is particularly of interest to regulators, drug review committees, and drug/medical device companies as this type of data is increasingly used in decision-making.

7.1 Cost-Minimization Analysis

A study method to compare costs of alternative clinical interventions and is used if cost is the dominant determinant in a choice or if the health outcomes from each intervention are the same.

7.2 Cost-Effectiveness Analysis

A study method to compare the opportunity costs of various alternative clinical interventions in terms of obtaining desired clinical outcomes. Effectiveness is often measured specific to interventions (e.g., number of lives saved, number of re-admissions prevented).

7.3 Cost-Utility Analysis

A special type of cost-effectiveness analysis where generic outcome measures are used (e.g., quality of life [QOL] and quality-adjusted life-years [QALY]).

7.4 Cost-Benefit Analysis

A method to compare the opportunity costs of various alternative clinical interventions in terms of money-value benefit. Monetizing lives and health outcomes is often very challenging and controversial.

7.5 Budget Impact Analysis

An estimation of the budget impact of a change in clinical practice (e.g., use of a new drug or device). It is often conducted in accompaniment with cost-effectiveness/utility/benefit analysis and used for drug formulary or healthcare policy decision-making.