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Difficulty: MediumHealthcare Economics and Value-Based Care

A pharmacy and therapeutics (P&T) committee at a health maintenance organization is evaluating a newly approved oral anticoagulant for addition to the formulary. The new medication is being compared to the current standard of care, warfarin, for stroke prevention in patients with nonvalvular atrial fibrillation. The committee reviews the annual costs and health outcomes associated with both treatments.

The current standard of care (warfarin, including the cost of the drug, routine INR monitoring, and associated clinic visits) costs 800800 dollars per patient annually and provides an average of 0.750.75 Quality-Adjusted Life Years (QALYs) per year.

The new oral anticoagulant costs 4,8004,800 dollars per patient annually (including drug costs and minimal required monitoring) and provides an average of 0.800.80 QALYs per year due to a lower incidence of major bleeding events and improved patient adherence.

Based on this data, what is the incremental cost-effectiveness ratio (ICER) of the new oral anticoagulant compared to the standard of care? (Express your answer in dollars per QALY gained as a whole number).

Answer: 80000 $/QALY

Answer

80000 dollars per QALY gained
The Incremental Cost-Effectiveness Ratio (ICER) is a fundamental metric in healthcare economics used to determine the value of a new intervention compared to a standard intervention. It is calculated by dividing the difference in cost between two interventions by the difference in their effect (usually measured in QALYs). In this scenario, the incremental cost is 4,800−800=4,0004,800 - 800 = 4,000 dollars. The incremental effect is 0.80−0.75=0.050.80 - 0.75 = 0.05 QALYs. Dividing 4,0004,000 by 0.050.05 yields an ICER of 80,00080,000 dollars per QALY gained. This metric helps health systems decide if the additional clinical benefit of a new therapy justifies its additional cost.

Step-by-Step Solution

1
Calculate the incremental cost (difference in cost between the two interventions).
4,800−800=4,0004,800 - 800 = 4,000 dollars
ICER requires knowing how much extra the new intervention costs compared to the baseline standard of care.
2
Calculate the incremental effect (difference in QALYs between the two interventions).
0.80−0.75=0.050.80 - 0.75 = 0.05 QALYs
ICER requires knowing the additional clinical benefit provided by the new intervention compared to the baseline.
3
Divide the incremental cost by the incremental effect.
4,000/0.05=80,0004,000 / 0.05 = 80,000
This yields the cost per each additional QALY gained, which represents the formula for the Incremental Cost-Effectiveness Ratio.

Key Concept

Incremental Cost-Effectiveness Ratio (ICER)
Estimated Time:1m 30s
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Topics

Healthcare Economics and Value-Based Care

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