A Brief Review of Pharmacoeconomics and Its Importance in Healthcare

Abstract

Background: Assessing health interventions today requires the use of economic knowledge due to the growing complexity and high cost of healthcare. Pharmacoeconomics, a branch of health economics, assesses the value of pharmaceutical goods and services by weighing their costs and benefits. Pharmacoeconomic analysis plays a critical role in supporting evidence-based decision-making and policy-making as healthcare expenditures throughout the globe continue to grow.

Purpose: The objective of this study is to provide a concise overview of pharmacoeconomics, its primary methodologies, and its growing significance within healthcare systems.

Methods: This literature review, covering publications from 2014 to 2025, analyzed peer-reviewed articles, policy documents, and textbooks on pharmacoeconomics. The review employed comparative frameworks such as cost minimization, cost-effectiveness, cost-utility, and cost-benefit analyses.

Results: Pharmacoeconomic analysis is increasingly being included in national and international healthcare systems to ensure efficient resource management. It significantly influences the evaluation of rival treatment options and the judgments about medication reimbursement. Common methodologies encompass cost-effectiveness and cost-utility evaluations, among others. Countries such as the UK, Canada, and Australia have institutionalized pharmacoeconomic evaluations through the establishment of organizations like the National Institute for Health and Care Excellence (NICE), the Canadian Agency for Drugs and Technologies in Health (CADTH), and the Pharmaceutical Benefits Advisory Committee (PBAC).

Conclusion: Pharmacoeconomics is a crucial component of the modern healthcare landscape, facilitating the optimal allocation of limited financial resources to enhance health outcomes. It assists policymakers, physicians, and payers in making decisions informed by costs and clinical outcomes. As healthcare costs continue to rise, the role of pharmacoeconomics in policymaking and practice will become increasingly essential.

  • Page Number : 58-68
  • Published Date : 2025-10-20
  • Keywords
    Cost-effectiveness, Drugs, Expenses, Health economics, Pharmacoeconomics
  • DOI Number
    10.15415/jptrm.2025.131005
  • Authors
    Arti Saini and Shivam Sharma

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