The choice of pharmacoeconomic study design during drug development—part 1

Given the rising cost of health care, it is no longer sufficient to demonstrate the safety and efficacy of a medical intervention. A medication must have exhibited economic benefit as well. Pharmaceutical manufacturers are faced with the challenge of when and how to conduct pharmacoeconomic (PE) evaluations to satisfy third‐party drug formulary decision‐makers. A wide variety of study designs and methodologies are available to assess economic benefit during drug development. Choosing the best strategy is a complex process. To illustrate the usefulness of decision analysis for strategic planning in drug development, a model was created to compare the cost–benefit of three PE design options: (1) add‐on to a phase III safety and efficacy randomized controlled clinical trial (RCT), (2) stand‐alone phase IIIb trial and (3) a post‐marketing phase IV observational study. Although this model does not represent all the factors involved in a complicated drug development decision, the exercise may facilitate the decision process by rendering the inputs and probable consequences of various options more transparent to the decision‐maker. Thus decision analysis can be a useful tool for preparing a sensible development strategy or uncovering deficiencies in an existing plan. © 1997 John Wiley & Sons, Ltd.