Providing cost-effective therapy using pharmacoeconomic evaluations: The public sector approach

Four years ago it became obvious within the US Department of Defense (DOD) that expenditures for pharmaceuticals and health care were escalating beyond control. Realizing this upward pressure on costs was one of the major trends jeopardizing the military health care system, which cares for 8 million-plus beneficiaries, the DOD began using pharmacoeconomics to manage pharmacy expenditures. The DOD has several competing goals: to reduce pharmaceutical expenditures within the context of an open formulary while maintaining optimum patient care; provide practitioners, pharmacists, and administrators with the information they need to make cost-effective choices in pharmacotherapy; and provide for a consistent and equitable pharmacy benefit throughout the DOD based on cost-effective recommendations. Currently used methods for pharmacoeconomics did not meet the DOD's needs, so it turned to applied pharmacoeconomics. This paper discusses the use of applied pharmacoeconomics as it pertains to the DOD.