Revenue story: How do you calculate cost of therapy for a drug? - 03/24

For drugs like oral medication A, patients might need one unit (a 30-day supply) per month, while intravenous drug B might require one dose every 15 days. This translates to 12 units annually for oral drug A and 24 units annually for IV drug B.

However, not all patients adhere to their prescribed dosage for the entire year. This is known as compliance, and it can be lower for oral medications (typically 8-10 months, or 66%-83%) compared to intravenous drugs (11-12 months, or 91%-100%).

Therefore, calculating the annual cost of therapy involves multiplying the unit price of the drug by the number of units consumed annually and then factoring in the patient's compliance rate.

For example, if oral drug A costs $5,000 per unit, the estimated annual cost of therapy would be:

$5,000 per unit 12 units/year 75% (average compliance)

This equals $45,000 annually

This approach provides a more accurate picture of the expected annual financial burden associated with different types of specialty drug therapies.

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