Section 46
Chapter 45,710

Decision analysis in formulary decision making

Schechter, C.B.

Pharmacoeconomics 3(6): 454-461


ISSN/ISBN: 1170-7690
PMID: 10146880
DOI: 10.2165/00019053-199303060-00005
Accession: 045709904

Although decision making about what drugs to include in an institutional formulary appears to lend itself readily to quantitative techniques such as decision analysis and cost-benefit analysis, a review of the literature reveals that very little has been published in this area. Several of the published decision analyses use non-standard techniques that are, at best, of unproved validity, and may seriously distort the underlying issues through covert under-counting or double-counting of various drug attributes. Well executed decision analyses have contributed to establishing that drug acquisition costs are not an adequate measure of the total economic impact of formulary decisions and that costs of labour and materials associated with drug administration must be calculated on an institution-specific basis to reflect unique staffing patterns, bulk purchasing practices, and the availability of surplus capacity within the institution which might be mobilised at little marginal cost. Clinical studies of newly introduced drugs frequently fail to answer the questions that weigh most heavily on the structuring of a formal assessment of a proposed formulary acquisition. Studies comparing a full spectrum of therapeutically equivalent drugs are rarely done, and individual studies of particular pairs of drugs can rarely be used together because of differences in methodology or patient populations studied. Gathering of institution-specific economic and clinical data is a daunting, labour-intensive task. In many institutions, incentive and reward structures discourage behaviour that takes the broad institutional perspective that is intrinsic to a good decision analysis.

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