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New drugs and clinical economics: analysis of cost effectiveness in the assessment of pharmaceutical innovations.

New drugs undergo rigorous clinical testing to determine their efficacy and adverse effects. However, seldom is the potential financial impact of a new drug carefully assessed before its introduction. Cost-benefit and cost-effectiveness analyses provide methods of determining the effect of drugs and other services on costs of medical care. Methods of industrial engineering and cost accounting can be used to determine the additional cost of medical care associated with the drug; such cost finding provides more accurate economic data than does the use of hospital charges. This symposium includes two clinical economic studies of the potential effect of introducing a cephalosporin antibiotic that requires administration only once daily. Both studies estimate substantial savings in direct hospital expenditures.