Lecture 2: Pharmacoeconomics, Pharmaceutical Pricing, Pushback and Policy

Lecture 2: Pharmacoeconomics, Pharmaceutical Pricing, Pushback and Policy
In the basic part of the lecture the common pharmacoeconomic measures, cost-benefit, cost-effectiveness and cost-utility will be defined and discussed. In the advanced part, how to conduct a pharmacoeconomic analysis will be presented using Sovaldi as one example. The role of pharmacoeconomics in business will be discussed. Health care-costs for developed countries will be compared from a policy viewpoint.
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Course Outline

Welcome - Lecture Objectives

Lecture 2: Pharmacoeconomics, Pharmaceutical Pricing, Pushback & Policy

  1. Lecture Intro
  2. Section 1 – The Cost of US Healthcare Compared to Other Developed Nations
  3. Section 2 – PhRMA's Defense Regarding Drug Prices
  4. Section 3 – The Two Basic Pharmacoeconomic Measures: Cost-Benefit And Cost-Effectiveness
  5. Section 4 – Cost Utility, The Pharmacoeconomic Measure That Accounts For Outcomes
  6. Section 5 – Pushback!
  7. Section 6 – Why Pharmacoeconomics?
  8. Section 7 – Explaining Clinical-pathway Or Clinical-states Diagrams
  9. Section 8 – A Pharmacoeconomic Analysis Of The New Drugs That Cure Hepatitis C Infections
  10. Section 9 – Pricing New Drugs

U.S. health-care compared to others

  1. How the Performance of the U.S. Health Care System Compares Internationally
  2. Graph of average life expectancy vs percent GDP
  3. BEST CARE AT LOWER COST The Path to Continuously Learning Health Care in America
  4. Best care for lower cost--Institute of Medicine of the National Academies

Push-back against high drug prices

  1. BIO2015 and 21st Century Cures - Why value matters more than ever
  2. Cover letter for Senate report on Gilead
  3. Express-scripts offers-low-cost-alternative-turing-drug
  4. Payers - Forget specialty drug costs - generic prices are crushing our budgets too

Conducting pharmacoeconomic analyses

  1. Spreadsheet analysis for Sovaldi pharmacoeconomics
  2. Why Is Everybody Picking on Sovaldi


  1. Lecture 2 Minitextbook

Pricing through pharmacoeconomics and other means

  1. ICER’s Value Assessment Framework
  2. Memorial Sloan Kettering DrugAbacus finding the value of a drug
  3. NCCN Unveils Evidence Blocks for CML and Multiple Myeloma
  4. The ICER Emerging Therapy Assessment and Pricing (ETAP) Program

Certificate of Completion Exam

  1. Completion Exam
  2. Certificate of Completion Exam

About the Course

With rapidly increasing health-care costs, increasing U.S. budget deficit and a weak economy, reducing health-care costs is a necessity.

The high price of the new highly effective Hepatitis C cure, Sovaldi, ignited a public outcry over drug prices. The U.S. is starting down the road to utilizing pharmacoeconomics, which will likely play a role in almost every aspect of the pharmaceutical business. For instance, pricing of new drugs based on cost benefit is becoming necessary for reimbursement by health-care payers. Also, setting a defendable price to calculate potential sales for a company’s business plan to raise financing is becoming more and more important.

In the basic materials in this lecture, health-care costs in the U. S. will be compared with other developed nations. We pay twice as much as other nations, and overall our health-care outcomes rank last. This is reason enough for pharmacoeconomic analysis.

Also in the basic materials, the various pharmacoeconomic measures cost benefit, cost effectiveness and cost utility will be defined.

The payer/reimburser and legislative pushback over high drug prices will be looked at. The concept of pricing drugs through pharmacoeconomic analysis as the way to defend against pushback over high drug prices will be explored mainly in the Advanced Materials in this lecture.

In the Advanced Materials, you will learn how to conduct a pharmacoeconomic analysis beginning with clinical states diagrams, which are flow charts that trace a patient’s journey and costs through the medical system. For instance, pharmacoeconomic analysis can find the total cost of treatment with and without your drug. In that way, the analysis finds the cost benefit and cost effectiveness of your drug.

Sovaldi is the first marketed small-molecule drug to cure Hepatitis C chronic infections. In the analysis example in the lecture, year after year treatment cost is traced for patients harboring Hep C infections, before Sovaldi and the other new Hep C drugs came on the scene. The analysis will show that the nearly $100,000 treatment price for these drugs has negative cost-benefit; that is, the drugs cost more than treatment without them. That is the reason health-care payers have balked at or “pushed-back” at paying for treatment.

Finally, drug pricing through pharmacoeconomics and other means will be discussed.

Each online lecture is equivalent to about 2-3 live classroom lectures.

Purchase of any lecture in this series provides several resources:

  • The lecture with dozens of visuals and audios
  • A mini-textbook of the lecture material, yours to download and keep
  • Several handouts to supplement both the lecture and mini-textbook
  • A Certificate of Completion for those who pass a simple exam on key points

The lectures feature both basic material and advanced material, depending on how deeply you wish to pursue a topic.

There are several ways to learn:

  • Look and listen to get a general overview of the topic
  • Study the material by stopping frequently as you go through the lecture
  • Read the mini-textbook to supplement the lecture and to keep as a future reference
  • Delve deeply into a topic by reading the handouts and accessing directly the Internet address references on your screen
  • Arrange for an Office Hours session with the lecturer as an earlier adopter

More feedback can be found here: https://biopharmadive.schoolkeep.com/feedback

About the Instructors

Lynn Klotz

Lynn Klotz, Co-Managing Director and Chief Science Officer

Lynn C. Klotz received a BA in mathematics from Princeton University (1965) and a PhD in chemistry from the University of California, San Diego (1971). He was formerly an Assistant and Associate Professor of Biochemistry and Molecular Biology at Harvard University (1971-1979) and a visiting Associate Professor at Princeton University (1979-1981). He was a founder and board member of BioTechnica International (1981-1988)-an agricultural and natural products company. Within BioTechnica, he founded BioTechnica Diagnostics, a periodontal-disease DNA-probe diagnostics company and BioTal a Wales-based environmental-remediation biotechnology company. He recently served as Research Scholar and Adjunct Professor at the Arizona State University’s Walter Cronkite School of Journalism and Mass Communication.

As a consultant, Dr. Klotz co-founded (1994) and served on the scientific advisory board of Codon, a biotechnology company focused on curing genetic diseases. More recently, he was interim chief executive officer of Precision Genetics (2001-2006), an unfunded company developing gene-repair methods based on Yale and Princeton University technologies.

Dr. Klotz was a recipient of the prestigious Dreyfus Teacher-Scholar grant for teaching excellence while at Harvard University. He was also nominated for a Pulitzer Prize by the publisher Charles Scribner’s Sons, along with co-author Edward Sylvester, for the 1983 book The Gene Age: Genetic Engineering and the Next Industrial Revolution.
In the fall of 2011 and 2012, Dr. Klotz taught a graduate-level Harvard Extension Course, BIOT E-210, Biotechnology and Drug Development: Tools for Business.

William Diehl

William Diehl, ​Co-Managing Director and Chief Technology Officer

William C. Diehl, Ph.D. is Coordinator of Online Graduate Programs in the Adult Education program and Assistant Professor at The Pennsylvania State University at University Park, PA. Dr. Diehl serves as Interviews Editor for The American Journal of Distance Education, and is an expert reviewer for other academic journals. He is the founder of the International Museum of Distance Education and Technology project.

Additionally, Diehl is a consultant in the corporate, higher education and government sectors. Professional experience also includes work as a K-12 teacher, web designer and developer, instructional designer, and multimedia specialist.

Dr. Diehl is author and co-author of numerous book chapters, articles in academic journals, including the Handbook of Distance Education and The Handbook of mLearning. His research interests include historical and research foundations of Open and distance education, course design, distance education theory, emerging technologies, virtual worlds, and intercultural communication.

Dr. Diehl earned his Ph.D. in Adult Education with a focus in Distance Education from The Pennsylvania State University. His undergraduate degree focused on Elementary Education.