ABSTRACT
Pharmacoeconomics is the application of methods of economic evaluation, developed by health economists, to the appraisal of pharmaceutical products. This chapter deals with an insight into the perspective, terminology and methodology of health economics and provides a first step towards such a common dialogue between doctors and economists. It introduces the interested reader to the purpose, scope and methods of economic evaluation and explores some definitions and further explanation of terms commonly appearing in published economic evaluation studies of drugs and in pharmaceutical advertising material. Economic evaluation covers only one aspect of the overall evaluation of preventative, diagnostic or therapeutic procedures. The chapter also provides an overview of economic evaluation to help doctors through the fog. Doctors and health economists must speak to one another, learning one another's jargon and hence beginning to see one another's viewpoint. The Quality Adjusted Life Year (QALY) is a measure of health gain developed to allow comparison between a wide range of healthcare activities.
