Economic Analysis of a New Drug: Potential Savings in Hospital Operating Costs from the Use of a Once-Daily Regimen of a Parenteral Cephalosporin

Abstract

The introduction of a new drug requires clear demonstration of its clinical efficacy and documentation of its adverse effects, but economic consequences of the new drug generally receive less attention. A new cephalosporin antibiotic, cefonicid, can be administered parenterally once daily, rather than three or four times daily, which is required for conventional cephalosporins. Methods of industrial engineering and cost accounting were used to determine the potential savings in hospital operating costs that would be available by reducing the frequency of intravenous administration of cephalosporin antibiotics. The variable cost of administering parenteral cephalosporin antibiotics averaged $2.24 per dose, $0.95 of which was attributable to labor costs and $1.28 to the costs of materials. Given present patterns of cephalosporin use, at four study hospitals the average potential savings per day for patients receiving intravenous cephalosporins ranged from $3.72 to $7.23, with a weighted mean of $5.42. Estimated national savings in hospital operating costs that would occur with use of an intravenous cephalosporin administered once daily range from $85.1 million to $115.4 million yearly.