Cost of Illness

Cost-of-illness (COI) analysis measures the economic burden of disease and illness on society. It is often called burden-of-illness (BOI). The components of a pharmacoeconomic or cost-effectiveness analysis include costs and consequences. Costs can be divided into direct and indirect costs. Direct medical costs are those related to providing medical services, such as a hospital stay, physician fees for outpatient visits, and drug costs (including the cost of the medication itself and any downstream adverse events that may arise as a result of drug administration). Direct nonmedical costs are those related to expenses, such as transportation costs, that are a direct result of the illness. Direct costs are most frequently included in a COI study, whereas indirect costs, those associated with changes of individual productivity, are often not included in a COI study, because they are difficult to obtain. Examples of indirect costs are lost time from work (absenteeism) and unpaid assistance from a family member. In addition, intangible costs, such as pain and suffering, may be included in the analysis. Analyses can be done from one or several perspectives, which will help in determining the distribution of disease costs across multiple stakeholders.1 The societal perspective typically includes indirect, as well as direct, medical costs because these are costs to society, that is, as previously mentioned, lost time from work. The payer perspective typically includes only direct costs (see Chapters 1 and 2 for more on perspective).