Pharmacoeconomics Examination II Page: 1 of 6

Last Name:_______________________________

First Name:_______________________________

Pharmacoeconomics and Health Outcomes

Spring 2000

Examination II
Form A

Note to students: The first several questions on this exam asked students to evaluate a journal
article. You are not going to be asked to do anything like this (now), so you can ignore these
questions. Also, I cannot include the article I was asking about because I did not have it in a PDF
file.

The practice problems I gave you should look familiar, they were on this exam…

Instructions:
1. Please complete the computer answer sheet, with BOTH your name and student ID .

2. In the space below, please endorse the honor code. You should write either of the
following statements: “submitted with honor” or “I have neither given nor
received unauthorized aid on this exam, nor have I witnessed anyone doing
so.” in the space below and sign your name. Thank you.

Honor Code:

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________
Pharmacoeconomics Examination II Page: 2 of 6

Name:______________________________________

Read each question carefully, and select the most correct answer. Good luck!

1. Which form appears on the cover of this exam?

a. Form A b. Form B

Please read the attached study from the New England Journal of Medicine. The 10 questions below are based on this
manuscript. The first 5 questions ask you to assess how well this study meets some of the stated guidelines for
pharmacoeconomic evaluations.

A 2. The study objectives are clearly stated.

B 3. The study perspective is clearly stated. A. True

A 4. The type of economic analysis chosen is appropriate, given the health B. False
outcomes.

A 5. Appropriate sensitivity analyses were conducted.

A 6. Generalizability issues and study limitations are clearly stated.

A 7. What is the study design used in this manuscript?

A. piggyback randomized clinical trial (RCT) B. prospective quasi-experimental design
C. prospective economic clinical trial (ECT) D. retrospective quasi-experimental design

C 8. Based on the design, this study has a weakness in which area?

A. internal validity B. patient selection
C. external validity D. patient crossover

D 9. Refer to the authors’ decision tree analysis (Figure 2, p. 753). What proportion of patients who receive
another day of hospitalization will develop ventricular tachycardia and will likely die within 6 months? (Hint:
this is the bottom branch of Figure 2)
A. 0.0008 B. 0.3810 C. 0.6190 D. 0.0003 E. 0.0005

A 10. What type(s) of sensitivity analyses were conducted ?

A. simple sensitivity analysis B. threshold analysis
C. probabilistic analysis D. none of the above are correct

C 11. Which of the following is true concerning this study?

A. the authors are all employed by the pharmaceutical industry
B. the study was funded by the federal government
C. the study was funded by one or more pharmaceutical companies
D. there can be no ethical problems with a publication which appears in the New England Journal of Medicine
E. none of the answers above are true
Pharmacoeconomics Examination II Page: 3 of 6

For the questions below, please match the description with the most appropriate type of economic analysis.

B 12. Both the costs and the outcomes are expressed in monetary units.

A 13. The outcomes being compared are shown to be identical, thus only
the costs are considered.
A. Cost Minimization Analysis
D 14. The ratio denominator is quality adjusted life years (QALY).
B. Cost Benefit Analysis
B 15. Can be used to compare very different programs (e.g. comparing a
new kinetics service to building a new hospital wing).
C. Cost Effectiveness Analysis
C 16. The outcomes being compared are expressed in their natural units.
(e.g. cures, or inpatient days) D. Cost Utility Analysis

A 17. Appropriate for comparing a trade name drug versus its generic.
E. More than one of the above
B 18. Sometimes requires estimating the dollar value of human life.

E 19. Requires sensitivity analyses for its major assumptions.

A 20. Can be used to evaluate the same therapy administered in two

different settings. (e.g. hospital vs. at home infusions).

E 21. Most Cost-of-Illness studies use a prevalence based approach because:

A. This approach is easier than an incidence based approach
B. This approach is more appropriate for long term, chronic diseases
C. This approach can be conducted without regard to the time since diagnosis (i.e. lifetime costs are not
considered)
D. This approach is appropriate for conditions which can be measured within shorter time frames.
E. More than one of the above is correct

B 22. Which of the following classification schemes is used to classify most medical diagnoses in the U.S.?
A. DRG codes B. ICD-9-CM codes C. NDC codes
D. DIAG-9 codes E. HCPCS codes

D 23. Which technique is used to combine results from different published studies?
A. Decision Analysis B. Sensitivity Analysis C. Equivalency Analysis
D. Meta Analysis E. Beta Analysis

Discounting: Consider a patient admitted with an acute myocardial infarction.

The cardiologists are considering two different options: (assume these options are equally effective).
A.) Perform percutaneous transluminal coronary angioplasty (PTCA) today, and implant a stent. The cost
today is $7,300 and no additional drug therapy would be required.
B.) Give thrombolytic therapy (e.g. t-PA or streptokinase) at a cost of $2,500 this year, followed by an
average of 7 more years of drug therapy at $800 per year
Pharmacoeconomics Examination II Page: 4 of 6

A 24. Without any discounting, which treatment option appears to be the least expensive?
A. Option A
B. Option B
C. Cannot be determined from the information provided

B 25. Assuming a discount rate of 10%, which treatment option appears to be the least expensive? (Hint: this would
be the smallest net present value)
A. Option A
B. Option B
C. Cannot be determined from the information provided

A 26. Assume you are a physician in private practice. A medical representative has just left your office, and told you
about their new antibiotic, Adsitomycin, which is proven to be 98% effective against all the infectious
organisms you have ever treated. Until now, the only other antibiotic you have ever used is Schultecin, which
is only 92% effective. Based only on this information, which antibiotic would you routinely prescribe?
A. Adsitomycin B. Schultecin
C. Either one, alternating at random D. insufficient information to make a decision

B 27. Now assume you are a physician participating in a managed care plan. The plan sends you a newsletter with
the following information. Your annual antibiotic budget is $50,000. Based on this amount, which antibiotic
would provide your patients with the greatest number of cures?

Plan Cost per

Drug Effectiveness 10 day course

Adsitomycin 98% $125

Schultecin 92% $60

A. Adsitomycin B. Schultecin
C. Either one, equally D. insufficient information to make a decision

B 28. From the table above, calculate the incremental cost effectiveness ratio:
A. $62.33 per additional cure by using Adsitomycin over Schultecin
B. $1083.33 per additional cure by using Adsitomycin over Schultecin
C. $62.33 per additional cure by using Schultecin over Adsitomycin
D. $1083.33 per additional cure by using Schultecin over Adsitomycin
E. Insufficient data to compute the incremental cost effectiveness ratio

D 29. You are seeking to create a health utility index (Q) for patients with chronic asthma. After surveying patients,
you learn that, on average, they value living 10 years with chronic asthma equivalent to living for 6 years in
perfect health. Given this information you now know:
A. The utility (Q) for chronic asthma is 0.4 using the standard gamble method
B. The utility (Q) for chronic asthma is 0.6 using the standard gamble method
C. The utility (Q) for chronic asthma is 0.4 using the time trade off method
D. The utility (Q) for chronic asthma is 0.6 using the time trade off method
Pharmacoeconomics Examination II Page: 5 of 6

A 30. A recent cost-effectiveness study for the treatment of chronic asthma reports a new therapy with an
incremental cost-effectiveness ratio of $10,000 per life-year gained. Incorporating your data from the previous
question, your cost utility analysis for this treatment would yield:
A. An incremental cost-utility ratio greater than $10,000 per QALY
B. An incremental cost-utility ratio less than $10,000 per QALY
C. An incremental cost-utility ratio greater less $10,000 per life-year gained
D. An average cost-utility ratio greater than $10,000 per QALY
E. None of the above are correct

Decision Analysis: The following example concerns decision analysis. The Panama City Medical Center is
evaluating two drugs for pain. Only the agent with the lowest average cost (from the hospitals perspective) will be
added to the formulary. Given the hospital’s patient population (i.e. college students with acute alcohol poisoning),
only two drugs are being considered: codeine and ibuprofen. We make the following assumptions: both drugs are
equally effective when dosed correctly; and the average length of treatment is 10 days. (Hint: Ignore any other clinical
or toxicity concerns you may have. Use only the information presented in this case to make your decision.)
A 10 day supply of codeine costs the hospital $10. Of all the patients who take codeine, 20% will develop
serious pruritis and require diphenhydramine which costs an additional $10. In addition there is a subsequent chance
of an anaphylactic reaction. If this occurs, it represents an additional cost of $1,000 to the hospital.
A 10 day supply of ibuprofen cost the hospital $5. Of all the patients who receive ibuprofen, 40% will develop
nausea (unrelated to a hangover) which costs an additional $4 to treat. In addition, there is a subsequent chance that
these patients will develop a GI bleed which will take $2,500 to resolve.
Below is the decision tree, with a few of the choices placed for you. Complete the tree, compute the
conditional probabilities, and costs of each branch. Answer the following questions from the completed decision tree.
Anaphylaxis
A
pruritis

B
Codeine

Ibuprofen G

No nausea
H
No GI Bleed
Pharmacoeconomics Examination II Page: 6 of 6

E 31. What proportion of patients receiving codeine are represented by path “B” ?
A. 0.20 B. 0.80 C. 0.02 D. 0.18 E. 0.72

B 32. What is the average cost for patients represented by path “B” ?
A. $20.40 B. $3.60 C. $80.80 D. $7.20 E. insufficient data

A 33. What is the average cost for all of the patients receiving codeine?
A. $112.00 B. $1,020 C. $80.80 D. $2,030 E. insufficient data

D 34. What proportion of patients receiving ibuprofen are represented by path “H” ?
A. 0.04 B. 0.36 C. 0.06 D. 0.54 E. insufficient data

C 35. What is the average cost for all of the patients receiving ibuprofen?
A. $2,509 B. $100.36 C. 256.60 D. $150.30 E. insufficient data

A 36. Based only on the information presented in this case, which drug would you add to the formulary?
A. codeine B. ibuprofen C. alka seltzer D. insufficient data

For the questions below, match the type of sensitivity analysis with the most appropriate description.

A 37. Changing the discount rate used in a cost-effectiveness analysis.

A. simple sensitivity analysis
D 38. Uses Monte Carlo simulation techniques. B. threshold analysis
C. analysis of extremes
B 39. Varies one assumption variable until there is no advantage to D. probabilistic analysis
either treatment option.

C 40. All of the following have published guidelines for either conducting, or reviewing pharmacoeconomic studies,
except:
A. The Pharmaceutical Industry (PhRMA)
B. The Canadian Government
C. The Food & Drug Administration (FDA)
D. The Task Force on Principles for Economic Analysis of Health Care Technology
E. Dr. Michael F. Drummond

Last thing… Did you remember to sign the Honor Code?… Please and Thank You!