Organization: University of Texas - MD Anderson Cancer Center (UT-MDACC) Department of Drug Use Policy and Pharmacoeconomics Problem or Issue Addressed: Pharmacy budgets for cancer treatment are ever increasing and are contributed to by the addition of targeted therapies to standard cancer treatment regimens. As part of our formulary management process, we conducted and presented an pre formulary admission and post admission economic analysis of bortezomib in combination with standard chemotherapy for refractory or relapsed multiple myeloma. Goals: The purpose of this project was to incorporate budget impact and cost-effectiveness considerations into the Pharmacy and Therapeutics Committee's deliberations about the approval for addition of a new product to the standard of care chemotherapy in the institution. A pre-approval economic model for bortezomib was built, which included annual budget impact and cost-effectiveness, and was presented to the Pharmacy and Therapeutics Committee in 2003. In 2007, a post-approval economic analysis was presented again to the Pharmacy and Therapeutics Committee in order to assess the actual annual budget impact of bortezomib and compare it to the pre-approval economic model. Outcomes items used in the decision: The institutional annual budget impact analysis was done using direct medical costs, in 2007 United States Dollars. A cost per life year saved was also calculated for the initial Pharmacy and Therapeutics consideration. Implementation Strategy: A model was built based on the indication of treatment of relapsed and refractory multiple myeloma as third line treatment. Assumptions regarding bortezomib's number of doses per cycle, per patient and median number of cycles per patient were based on information from published clinical trials. Annual budget impact for the expected MD Anderson population of 25 multiple myeloma patients, adjusted for 2007, was calculated to be $414,974 and a cost per life year saved was calculated as $14,592. This model, along with a clinical monograph, was presented to the P&T Committee at the same time as the vote for bortezomib's inclusion onto formulary. Subsequently, bortezomib was added to the formulary as an add-on drug for refractory or relapsed multiple myeloma patients with two prior therapies, and with the recommendation that physicians use discretion for use outside the FDA-indication. Results: We reviewed non-investigational usage of bortezomib in MDACC from June 2006 to May 2007, after allowing ample time since its addition to the formulary to penetrate the institution. We had a total of 161 patients on bortezomib. Of these, 140 (87%) were refractory or relapsed multiple myeloma patients who had prior therapies, 7 (4%) were mantle cell lymphoma patients with prior treatments, and 14 (9%) patients received bortezomib for non FDA-approved indications. Refractory or relapsed multiple myeloma was FDA-approved in March, 2005 for second line therapy, whereas mantle cell lymphoma was FDA-approved in December 2006, during our study period. We also reviewed charges and reimbursement data collected for the drug from June 2006 to December 2006. For the duration of the study period, we had a positive margin and our reimbursement to charge rate for multiple myeloma patients was close to MDACC goal of 55%, with 53.3% rate overall. Based on this analysis, there were some differences between the model assumptions and our findings from actual data. Our model had predicted 100% usage for the FDA approved indication of multiple myeloma in the expected patient population of 25 patients. Actual data collected showed that not only did we have more than expected number of patients on bortezomib, potentially due to the change in labeling to an earlier stage of disease, but our model had assumed 4 cycles of bortezomib therapy per patient whereas the actual average number of cycles per patient was only 2 at our institution. We did not have data to determine whether the patients had obtained more cycles of therapy from other providers. Lessons Learned: Annual budget impact analysis helped estimate the cost to the institution for adding bortezomib to the formulary. Performing an annual budget impact before the addition of a drug to an institution's formulary, and comparing it with the annual budget impact after a few years of the drug being on the formulary, is an essential process in determining the best use of scarcely available, expensive resources for the most appropriate use. Cost effectiveness studies, that take costs of treatments and their outcomes in patients into account, are as important in allocating resources to best possible use in this era of rising costs and future research will focus on calculating cost-effectiveness specifically for the institution's patient population.