Estimating preferences for modes of drug administration: The case of US healthcare professionals.

BACKGROUND: There are hidden drug administration costs that arise from a mismatch between end-user preferences and how manufacturers choose to formulate their drug products for delivery to patients. The corollary of this is: there are "intangible benefits" from considering end-user preferences in manufacturing patient-friendly medicines. It is important then to have some idea of what pharmaceutical manufacturers should consider in making patient-friendly medicines and of the magnitude of the indirect benefits from doing so. OBJECTIVES: This study aimed to evaluate preferences of healthcare professionals in the US for the non-monetary attributes of different modes of drug administration. It uses these preference orderings to compute a monetary valuation of the indirect benefits from making patient-friendly medicines. METHODS: A survey collected choice preferences of a sample of 210 healthcare professionals in the US for two unlabelled drug options. These drugs were identical except in the levels of attributes of drug administration. Using the choice data collected, statistical models were estimated to compute gross welfare benefits, measured by the expected compensating variation, from making drugs in a more patient-friendly manner. RESULTS: The monetary value of end-user benefits from developing patient-friendly drug delivery systems is: (1) as large as the annual acquisition costs per full treatment episode for some biologic drugs; and (2) likely to fall in the "high end" of the distribution of the direct monetary costs of drug administration. CONCLUSIONS: An examination of end-user preferences should help manufacturers make more effective and efficient use of limited resources for innovations in drug delivery system, or manufacturing research in general.

Evaluating the administration costs of biologic drugs: development of a cost algorithm.

Biologic drugs, as with all other medical technologies, are subject to a number of regulatory, marketing, reimbursement (financing) and other demand-restricting hurdles applied by healthcare payers. One example is the routine use of cost-effectiveness analyses or health technology assessments to determine which medical technologies offer value-for-money. The manner in which these assessments are conducted suggests that, holding all else equal, the economic value of biologic drugs may be determined by how much is spent on administering these drugs or trade-offs between drug acquisition and administration costs. Yet, on the supply-side, it seems very little attention is given to how manufacturing and formulation choices affect healthcare delivery costs. This paper evaluates variations in the administration costs of biologic drugs, taking care to ensure consistent inclusion of all relevant cost resources. From this, it develops a regression-based algorithm with which manufacturers could possibly predict, during process development, how their manufacturing and formulation choices may impact on the healthcare delivery costs of their products.