Using Cost-Effectiveness Analysis to Sharpen Formulary Decision-Making: The Example of Tiotropium at the Veterans Affairs Health Care System

ObjectiveTo identify a cost-saving subset of criteria for the use of tiotropium at a Veterans Affairs Medical Center based on a cost-effectiveness analysis with ipratropium as the comparator.MethodsRetrospective analysis of electronic medical records for the calendar year 2004 was conducted. The sample was drawn from a population at the Baltimore Veterans Affairs Medical Center that had a confirmed diagnosis of chronic obstructive pulmonary disease (COPD) and had filled prescriptions for ipratropium. The tiotropium sample was based on a modeled cohort of COPD patients who had received tiotropium. The analysis was conducted from the perspective of the Veterans Affairs Health Care System. The outcome was the incremental cost-effectiveness of tiotropium versus ipratropium.ResultsThe incremental cost-effectiveness ratio (ICER) was $2360 per avoided exacerbation. Tiotropium cost-effectiveness increased with COPD severity and was cost-saving in patients with very severe disease (ICER = $−1818) and in patients with a previous COPD-related hospitalization (ICER = $−4472). The ICER was most sensitive to the relative effectiveness and price of tiotropium. Results identified the levels of treatment effectiveness and price beyond which tiotropium would become cost-saving relative to ipratropium.ConclusionsThe results support the existing Veterans Affairs practice of offering tiotropium to patients with COPD-related hospitalizations. Periodic review of the effectiveness data to determine whether tiotropium would be cost-saving in patients with very severe COPD is suggested. Cost-effectiveness analyses that identify practical criteria-for-use should become an integral part of the formulary process.