ABSTRACT
This chapter addresses the methods available to pharmacy and therapeutics committees to assess the costs and effectiveness of pharmaceuticals in order to inform the formulary decision-making process, including outcomes research and prospective modeling. The outcomes associated with health care interventions are often classified according to the ECHO model, describing economic, clinical, and Ziumanistic outcomes of health care interventions. Cost analyses consider the costs associated with treatment, without assessing the impact on outcomes. Two types of cost analyses are generally used: cost-of-care and cost-of-illness. Cost-benefit analysis compares the costs of alternative treatments with the dollar value of the outcome associated with those treatments. There are a number of methodologic and practical application issues that limit the usefulness of cost-outcomes analyses in making formulary decisions. The first and perhaps the most important issue to consider is the quality of the study. Decision analysis provides a tool for systematic evaluation of the relative value of competing health care interventions.
