Providing advice on cost-effectiveness in the NHS would, by definition, involve the conduct and interpretation of an economic evaluation conducted from the perspective of the public sector healthcare provider. The aim of economic evaluation is to determine how healthcare resources can be used most efficiently. Pharmaco-economic evaluations aim to examine the clinical and economic impact of pharmaceuticals as opposed to other goods and services in healthcare. All economic evaluations must satisfy two criteria to qualify as full economic evaluations. The value for money of a drug therapy can only be shown relative to one or more other interventions, usually another drug or drugs.
Economic evaluation requires an assessment of the costs and health benefits to patients.
Resources consumed are also known as the costs in economic terms. There are many different types of costs and consequences that may be included in an economic evaluation and it is important to recognise, identify, measure, disaggregate, and value the different types of costs and outcomes. All economic analyses should comprise the following three dimensions the type of analysis the perspective of the analysis the type of costs that are included. All show the economic efficiency associated with a particular course of action compared to an alternative course of action. All measure costs in monetary terms but they differ in how outcomes are expressed.