Friction cost approach methodology in pharmacoeconomic analyses

he use of a societal perspective in pharmacoeconomic analyses is a widely discussed topic. One of the fundamental problems of using the social perspective is the inconsistency of indirect costs calculation. We searched published articles on the use and di

Cancer and productivity loss in the Irish economy: an employer’s perspective

The extant literature suggests that cancer-related premature mortality costs have increased over time and are projected to increase further. Previous studies have generally employed a societal rather than an employer-based costing framework. A question therefore remains over the magnitude of productivity costs associated with premature death from cancer from an employer perspective. The objective of this study was to measure the productivity costs associated with cancer-related premature mortality in Ireland using the employer-focussed friction-cost approach (FCA). This entailed the application of an involuntary turnover costing framework rarely used in the management literature and represents the first estimate of its kind in Ireland. The all-cancer premature mortality cost was valued at €14.3 million in 2009. We modelled the sensitivity of our costs to changes in underlying labour market conditions and to ‘multiplier effects’ which represent recent advances in the FCA. We advocate that future studies should concentrate on combining elements of direct turnover cost according to accounting costing frameworks with the indirect costs measured by the FCA. Implications for current guidelines for the economic evaluation of health technologies in Ireland are also discussed.