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Principles Of Management, Health Economics And Health Policy

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Cost-Utility Analysis (CUA) refers to the cost of the utilities required for a quality life. Although the term is controversial in the sense that the quality of life or health status of a person cannot be measured in terms of monetary benefits yet it is used to measure outcomes of studies of different interventions. (Elseviers et al., 2016). CUA is generally used to compare the economic benefits of different drug regimens or it can even be used to compare two surgical procedures. It is measure in terms of Quality-Adjusted Life Year (QALY). The study of CUA envisages the relative effectiveness as well as the safety of a drug regimen and or surgery. It can also be used to analyse the budget impact of health care policies of a nation.    Moreover, CUA can be used to aid in the implementation of diverse health care initiatives. Review of past literatures in Malaysia shows that the decisions concerning implementation of health care initiatives are made without transparent criteria.(Shafie et al., 2014). The present study intends to delve into the CUA of pharmaceutical intervention on diabetes and obesity.

According to the Institute of Public Health, Malaysia the prevalence of diabetes mellitus among adults is 17.5%. (Institute for Public Health (IPH) 2015). The highest prevalence of diabetes mellitus was found in the state of Kedah (25.4%) and the lowest incidence had been at Sabah and Wilayah Persekutuan Labuan (14.2%). Similarly the study carried out by Institute for Public Health (2015) showed that there was an average prevalence of overweight to the tune of 33.4%. The study also showed that the incidence of obesity in urban population was significantly more than rural population. In addition according to the report obesity in males is significantly more than females.


The report published by the Institute for Public Health (2015) is the basis for our present study.

What is the CUA of pharmaceutical intervention on diabetes mellitus in Malaysia?


To investigate the CUA of the ailment chosen was diabetes. According to Institute for Public Health (2012) diabetes along with high cholesterol as well as high BMI was the largest contributor of deaths and disability adjusted life-years (DALY). Medical Terminology & Anatomy for ICD-10 Coding (2014) refers Diabetes as a group of metabolic diseases which causes high glucose levels with decrease in amounts of insulin (Shiland, 2014). Diabetes is usually managed through the changes in lifestyle Medications, and or support. Lifestyles changes usually require change in dietary habitats and exercise. Diabetes mellitus or Type 2 Diabetes as it is usually known as is caused due to the metabolic defects of insulin resistance as well as reduction in insulin secretion cells by the pancreatic b-cells (Umpierrez, 2014).  

The glycemic concentration in blood is usually controlled through the use of oral medications. Oral drug therapies includes Metformin, gliclazide glibenclamide and a host of other medications. Metformin has been strongly recommended for type 2 diabetes (Qaseem et al., 2012).  The American College of Physicians strongly recommends the use of drugs in combination with Metformin. In a comparative study it has been found that Glicazide and Metformin are equally effective in Glycemic controlling especially in newly diagnosed patients (Erem et al., 2014).  The study by Erem et al. was carried out on newly diagnosed 57 patients for one year. It was a controlled clinical study. The factors under study were the blood glucose levels (both fasting and post-prandial), HbA1c, blood insulin levels, lipid parameters and other parameters usually measured during diabetes. For both the pharmaceutical oral dosage regimens of Gliclazide-MR and Metformin it was that they substantially effective in reducing the Glycemic level from the baseline.

The present study analysis the CUA of using Gliclazide along with Metformin against the use of Pre-Combined Glibenclamide-Metformin Tablets in the control Type 2 Diabetes Mellitus.

Quality Adjusted life years or simply referred to as the QALYS can be considered to be an important dimension for measurement of disease burden after incorporation of quality as well as quantity of life experienced by the people of the nation (Chakraborty and Das, 2016). The cost effectiveness ratio can be regarded as an important dimension that help in the process of representation of the cost for per unit of QALY. However, the basic formula that can be utilized for enumeration of the cost per QALY can be reflected as (Cost per QALY= Cost of specific intervention/QALY gained). In particular, the net cost of intervention can be regarded as the costs of diverse intervention program that is enumerated less savings attained for the process of treatment costs as an outcome of the decreased morbidity owing to execution of the program. Again, the QALY acquired is specifically equivalent to the gain in the overall QALY as an outcome of QALY as a consequence of decrease in the number of incidence otherwise mortality owing to the intervention. Nevertheless, there are essentially two different ratios for calculation of cost effectiveness that again can be related to the overall net costs borne for the intervention to the overall gain in the specifically QALY owing to the intervention (Nanditha et al., 2016).

Ellulu et al.  (2014) suggests that the incremental cost effectiveness ratio can be associated to the incremental net cost of the specific intervention to the incremental gain in the overall QALY. However, different rules can be framed by associating the data related to costs as well as effectiveness that in turn can help in calculation of cost per QALY. This process takes into consideration the cost savings, cost effectiveness as well as very cost effectiveness of an intervention. Particularly, cost savings refers to the yields from real savings in addition to contributing supplementary QALY. In case of very cost effective intervention, the cost for every QALY is essentially less than the per capita GNP. Again, the cost effective intervention has the cost per QALY that is necessarily thrice the per capita GNP (Ellulu et al., 2014).



A study was done to access the benefits of the use of pre-combined Glibenclamide-Metformin tablets against Gliclazide with Metformin for the administration of Type-2 diabetes mellitus at the endocrine clinic at Penang Hospital (Lim et al., 2012). Eighty patients with an average of 55 years were considered for study. Glycemic level was measured with HbA1c. After a study period of six months it was found that there was reduction of ≥ 8% from the baseline. The study showed that there was also a significant decrease in the treatment cost from 45% for three months to 44% for 6 months.         


Cost effectiveness of the use of combination of Gliclazide and Metformin against pre-combination of Glibenclamide-metformin was analysed according to the estimated population data (Institute for Public Health, 2015). According to the consumer price guide of 2015 the price of Pre-combined Glibenclamide-Metformin combination costs RM 0.88/tablet. Similarly The price of Gliclazide-MR is RM0.67/tablet and that of Metformin is RM 0.05/tablet (Ministry of Health Malaysia. Private sector medicines retail price list, 2015).  


The dose of Pre-combined Glibenclamide-Metformin combination costs RM 0.88/tablet was only one tablet per day while that of Gliclazide is one tablet per day and that of Metformin was two tablets per day. Hence from the cost analysis we find that there is a cost benefit is giving a dose of Gliclazide-MR and Metformin as against pre-combination of Glibenclamide and Metformin. The total benefits would be in the tune of RM 388278.66 for an estimated population of 3529806 for the whole of Malaysia (Appendix).  

According to a study done by (de León-Castañeda et al., 2012) the CE ratio of Metformin is US$296.48/QALY while that of Glibenclamide, US$272.63/QALY. Conversion to MYR shows that Metformin MYR1316.37/QALY and that of Glibenclamide is 1210.72/QALY ($1 = 4.44MYR). According to (Health Technology Assessment, 2017) Gliclazide has £2106/QALY or MYR 11584.88/QALY (£1 = 5.5MYR).

Thus it can be seen that a combination of Glibenclamide and Metformin will yield a better QALY as compared to that of Gliclazide with metformin. Hence there is an overall efficacy in the use of combination of Glibenclamide and Metformin than the use of Gliclazide and Metformin.



The study provides with a CUA of management of type 2 diabetes using a cheaper combination of drug. Secondary data was used for the study and a probable CUA was calculated. This CUA can be beneficial for the government in providing health benefits for patients suffering from type 2 diabetes and dependent on health initiatives by the Malaysian government.

The calculations of QALY show that there are economic benefits in using a combination of Glibenclamide and Metformin. The assessment is based on studies done in USA and UK. With the prevalence of Diabetes in the Malaysian population a combination dose would be effective in control the disease.


A CUA of a cheaper combination of drug for the management of type 2 diabetes was envisaged based on previous studies. A comparative analysis of the combinations of drugs regarding their efficacy was provided and thus the economic benefits were calculated.



The limitations of the present research are:

Only two pharmaceutical dosage regimens were considered for the study. There are many other formulations which can be studied. The dosage regimens / formulations to be given to a patient depends on the age the patient, his Glycemic level as well the control of Glucose. The extent of CUA can be analysed only when patients are segregated on the basis of age and formulations.

The present study was based on secondary data. A study based on primary data would provide a better evaluation of CUA.       


The assumptions for the report were that the population percentage of patients having diabetes has not changed from 2015 to the present date. Moreover in the report of Institute for Public Health, 2015 an estimate of the population of diabetes patients was done. In addition the cost of the pharmaceutical formulations was taken from the Consumer Price Guide (2015). In the study it was assumed that patients taking a combination of Gliclazide and Metformin would switch to Pre-combination of Glibenclamide and Metformin.

Data constraints

The study was based on use of secondary data of 2015. Thus there is a margin of error for the present study. Moreover since the population is an estimated population actual cost benefits are not available.



Chakraborty, C., Das, S., 2016. Dynamics of Diabetes and Obesity: An Alarming Situation in the Developing Countries in Asia. Mini Rev. Med. Chem. 16, 1258–1268.

Ellulu, M., Abed, Y., Rahmat, A., Ranneh, Y., Ali, F., 2014. Epidemiology of obesity in developing countries: challenges and prevention. Glob. Epidemic Obes. 2, 2.

Elseviers, M., Andersen, M., Wettermark, B., Benko, R., Almarsd?ttir, A.B., Bennie, M., Godman, B., Vander Stichele, R., Krska, J., Eriksson, I., others, 2016. Drug Utilization Research: Methods and Applications. Wiley.

Erem, C., Ozbas, H., Nuhoglu, I., Deger, O., Civan, N., Ersoz, H., 2014. Comparison of effects of gliclazide, metformin and pioglitazone monotherapies on glycemic control and cardiovascular risk factors in patients with newly diagnosed uncontrolled type 2 diabetes mellitus. Exp. Clin. Endocrinol. Diabetes 122, 295–302.

Health Technology Assessment (No. VOLUME 21 ISSUE 2), 2017. . National Institute of Health Research.

Institute for Public Health (IPH) 2015., n.d. , National Health and Morbidity Survey 2015 (NHMS 2015). Vol. II: Non-Communicable Diseases, Risk Factors & Other Health Problems; 2015.

Lim, P., Lim, S., Oiyammaal, C., 2012. Glycaemic control and cost analysis when changing from gliclazide co-administered with metformin to pre-combined glibenclamide-metformin tablets in type 2 diabetes mellitus. Med. J. Malaysia 67, 21–24.

Ministry of Health Malaysia. Private sector medicines retail price list 2015, n.d. , A report of Pharmaceutical Services Division,.

Nanditha, A., Ma, R.C., Ramachandran, A., Snehalatha, C., Chan, J.C., Chia, K.S., Shaw, J.E., Zimmet, P.Z., 2016. Diabetes in Asia and the Pacific: implications for the global epidemic. Diabetes Care 39, 472–485.

Shafie, A.A., Lim, Y.W., Chua, G.N., Hassali, M.A.A., 2014. Exploring the willingness to pay for a quality-adjusted life-year in the state of Penang, Malaysia. Clin. Outcomes Res. CEOR 6, 473.

Shiland, B.J., 2014. Medical Terminology & Anatomy for ICD-10 Coding, 2nd ed. Elsevier Health Sciences.

Umpierrez, G., 2014. Therapy for Diabetes Mellitus and Related Disorders, 2014. American Diabetes Association.


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