4) Pharmaco-economics
This section will explain what pharmacoeconomics are and why it is important for drug development. Pharmacoeconomics is a part of health economics and focusses on the economic evaluation of pharmaceutical drugs. An important component while performing this economic evaluation is the quality of an adjusted life year (QALY). This is the advantage offered by the drug of interest and is determined by the number of years added to the patient’s life in relation to the quality of life. QALY is expressed in incremental cost-effectiveness ratio (ICER).
Mueller, C; Shur, C.; O'Connell, J. (1997). "Prescription Drug Spending: The Impact of Age and Chronic Disease Status". American Journal of Public Health. 87 (10): 1626–29. doi:10.2105/ajph.87.10.1626. PMC 1381124. PMID 9357343.
Arnold, Renée J.G.; Ekins, Sean (2010). "Time for Cooperation in Health Economics among the Modelling Community". PharmacoEconomics. 28 (8): 609–613. doi:10.2165/11537580-000000000-00000. PMID 20513161.
https://www.pauljanssenfuturelab.eu/toolbox/qoc/
HTA assessment
According to the WHO, Health Technology Assessment (HTA) is the systematic assessment of properties, consequences and/or impacts of health technology. It is a multidisciplinary process for evaluating the social economic, organizational and ethical problems of a health-related intervention or technology. It aims to inform the decision-making of a policy.
A SWOT analysis is a strategic business model that is used for the identification of the strengths, weaknesses, opportunities, and the threads of a pharmaceutical drug. The strengths are the components that add value to the drug and therefore, give it an advantage compared to other alternatives. The weaknesses are the opposites of strengths and are the characteristics that are considered as disadvantages when compared to the alternative. The opportunities could be defined as the part between strengths and weaknesses. The components in this category are in need of improvement but could add value to the product after improvement. Threads are components that could cause problems and will be further explained in the example.
Example
Strengths: Patient-friendly dosage regimes, minimal adverse events, low in costs, being an orphan drug
Weaknesses: nonpatient-friendly dosage regimes, high risk for adverse events, high in costs
Opportunities: the chance of outcompeting drugs that are currently on the market due to several reasons e.g., easy to administer or because of the convenient dosage regime.
Threads: already existing drugs for a specific treatment
BATNA
The best alternative to a negotiated agreement (BATNA) also called a no deal option is the alternative with the most advantage when a negotiation fails or cannot result in an outcome. Setting up a BATNA is one of the most important parts of the negotiation itself since all the background research is implemented in this agreement. When making a BATNA you need to differentiate between the needs and the wants of the organization you are setting up a BATNA for. The opposite of a BATNA is a worst alternative to a negotiated agreement (WATNA) which is your worst-case scenario. In the section additional literature, there is an article about how the US failed in reducing the high costs of medical drugs by using a weak BATNA. If they would’ve applied a better BATNA, they maybe could have reduced the prices.
Additional literature
https://www.pon.harvard.edu/daily/business-negotiations/how-a-bad-batna-keeps-medicare-drug-prices-high/ à an interesting article about how a weak BATNA keeps the cost of drugs high in the US
