Estimating treatment-related costs for drugs includes estimating the drug acquisition costs as well as costs for administration, diagnostic testing, monitoring, and treatment of side effects. Acquisition costs may be from published price lists or may be negotiated privately at the national or plan level. In addition, the cost to the budget holder may be modified by patient co-payments, manufacturer discounts or rebates, or patient coinsurance. Costs for administration, diagnostic testing, monitoring, and treatment of side effects can generally be estimated using resource use based on the requirements stated in the drug label and unit costs from standard costing sources. In this chapter, we present a description of each of these types of costs and methods for estimating them.
