The costs of information technology (IT) in large multinational companies (MNCs) often constitute a significant portion of the company’s total yearly turnover. IT departments are on one hand expected to return value to business, but are on the other hand often prone to cost reductions. Thus, it is not unusual that IT management chooses to focus on cost cutting rather than cost control in order to meet the company’s financial targets. Understanding cost drivers in IT is not always evident, making it difficult for managers to know what performance indicators that should be tracked. This study addresses the issue of cost control and performance measurement in IT departments, in the form of a case study carried out at the IT department of a large Swedish MNC in the telecommunications industry. The case company is divided into two parts: Enterprise and Engineering, where Enterprise provides the organization with IT in form of printers, personal computers, applications, IT support and communication services through network infrastructure and voice. Engineering provides research and development units with software development infrastructure and testing environments for products. The testing environments comprise of both software testing through simulations and hardware testing in physical labs. By carrying out interviews with managers and key people responsible for large budget items, 130 cost drivers were identified. After reducing recurring cost drivers and merging similar ones, the cost drivers were filtered according to quantifyability. In a second step, performance indicators were developed using the SMART model and then scored with respect to cost impact and ease of implementation. This resulted in a recommendation of 49 performance indicators to be tracked across the entire IT department. A sample of recommended performance indicators is total cost of wages / number of employees, number of virtualized servers / total number of servers and amount of video related traffic / total capacity of bandwidth. The ambition of this study is to provide a holistic way of controlling cost drivers through prioritized performance indicators. Even though this case is specific to an IT department, the approach in this research may well be applied in other departments and industries. / Kostnaderna för informationsteknologi (IT) i stora multinationella företag utgör ofta en betydande del av företagets totala årliga omsättning. Samtidigt som IT-organisationer förväntas leverera värde till företaget, utsätts de även för kostnadsnedskärningar. Därför är det inte ovanligt att IT-ledningen väljer att fokusera på kostnadsbesparingar, snarare än kostnadskontroll, för att nå bolagets finansiella mål. Det är inte alltid enkelt att förstå vad som driver kostnader i en IT-organisation, vilket försvårar besluten om vilka nyckeltal som IT-ledningen bör styra efter. Denna studie tar upp frågan om kostnadskontroll och prestationsmätning i IT-organisationer i form av en fallstudie, som genomförts på IT-avdelningen på ett stort svenskt multinationellt bolag i telekommunikationsbranschen. Organisationen kan delas in i Enterprise och Engineering, där Enterprise tillhandahåller IT i form av skrivare, persondatorer, applikationer, IT support och kommunikationstjänster genom nätinfrastruktur och taltjänster. Engineering tillhandahåller infrastruktur för mjukvaruutveckling och en miljö för testning av produkter för forsknings- och utvecklingsenheter. Testmiljön består av både mjukvarutestning i form av simuleringar samt tester av hårdvara i fysiska laboratorier. Med utgångspunkt i intervjuer med chefer och andra nyckelpersoner ansvariga för stora budgetposter, identifierades 130 kostnadsdrivare inom IT-avdelningen. Efter reduktion av återkommande kostnadsdrivare och sammanslagning av liknande drivare, filtrerades kostnadsdrivarna med aveseende på kvantifierbarhet. Kostnadsdrivare som var kvantifierbara översattes sedan till nyckeltal med hjälp av SMART-modellen. I efterföljande steg  poängsattes nyckeltalen med avseende på kostnadseffekt och möjligheten för implementering. Detta resulterade i en rekommendation av 49 nyckeltal för effektiv kostnadskontroll i hela organisationen. Ett urval av rekommenderade nyckeltal är totala lönekostnaden / antal anställda, antal virtualiserade servrar / totala antalet servrar samt mängden videorelaterad datatrafik / totala bandbreddskapaciteten. Ambitionen med denna studie är att på ett ett holistiskt sätt kontrollera kostnadsdrivare, genom prioritering av nyckeltal. Även om denna fallstudie specifikt riktar sig mot IT-avdelningar, anser författarna att tillvägagångssättet även kan tillämpas på andra avdelningar och branscher.

The purpose of a cost model is to provide designers and decision-makers with accurate cost information to assess and compare multiple alternatives for obtaining the optimal solution and controlling cost. The cost models developed in the design phases are the most important and the most difficult to develop. Therefore it is necessary to identify appropriate cost drivers and employ appropriate modeling techniques to accurately estimate cost for directing designers. The objective of this study is to provide higher predictive accuracy of cost estimation for directing designer in the early design phases of complex products. After a generic cost estimation model is presented and the existing methods for identification of cost drivers and different cost modeling techniques are reviewed, the dissertation first proposes new methodologies to identify and select the cost drivers: Causal-Associated (CA) method and Tabu-Stepwise selection approach. The CA method increases understanding and explanation of the cost analysis and helps avoid missing some cost drivers. The Tabu-Stepwise selection approach is used to select significant cost drivers and eliminate irrelevant cost drivers under nonlinear situation. A case study is created to illustrate their procedure and benefits. The test data show they can improve predictive capacity. Second, this dissertation introduces Tabu-SVR, a nonparametric approach based on support vector regression (SVR) for cost estimation for complex products in the early design phases. Tabu-SVR determines the parameters of SVR via a tabu search algorithm improved by the author. For verification and validation of performance on Tabu-SVR, the five common basic cost characteristics are summarized: accumulation, linear function, power function, step function, and exponential function. Based on these five characteristics and the Flight Optimization Systems (FLOPS) cost module (engine part), seven test data sets are generated to test Tabu-SVR and are used to compare it with other traditional methods (parametric modeling, neural networking and case-based reasoning). The results show Tabu-SVR significantly improves the performance compared to SVR based on empirical study. The radial basis function (RBF) kernel, which is much more robust, often has better performance over linear and polynomial kernel functions. Compared with other traditional cost estimating approaches, Tabu-SVR with RBF kernel function has strong predicable capability and is able to capture nonlinearities and discontinuities along with interactions among cost drivers. The third part of this dissertation focuses on semiparametric cost estimating approaches. Extensive studies are conducted on three semiparametric algorithms based on SVR. Three data sets are produced by combining the aforementioned five common basic cost characteristics. The experiments show Semiparametric Algorithm 1 is the best approach under most situations. It has better cost estimating accuracy over the pure nonparametric approach and the pure parametric approach. The model complexity influences the estimating accuracy for Semiparametric Algorithm 2 and Algorithm 3. If the inexact function forms are used as the parametric component of semiparametric algorithm, they often do not bring any improvement of cost estimating accuracy over the pure nonparametric approach and even worsen the performance. The last part of this dissertation introduces two existing methods for sensitivity analysis to improve the explanation capability of the cost estimating approach based on SVR. These methods are able to show the contribution of cost drivers, to determine the effect of cost drivers, to establish the profiles of cost drivers, and to conduct monotonic analysis. They finally can help designers make trade-off study and answer “what-i” questions. / Ph. D.

One of the dilemmas that information systems (IS) decision-makers encounter is the identification of the often hidden costs associated with IS adoption, particularly since most of them are reported to be external to the traditional IS budget. The review of the IS literature has identified that much effort to date has focused on the identification and measurement of direct costs, and that much less attention has been paid to indirect costs. One of the main problems reported in the literature associated with looking at indirect costs is that they are intangible and difficult to quantify, and there is evidence suggesting that these indirect costs are rarely completely budgeted for, and thus deserve a much closer consideration by decision-makers. This research investigates this view, arguing that one element of indirect costs, that is, indirect human costs (lRCs), is underestimated and little understood. The author argues that it is not possible to estimate or evaluate IHCs without first identifying all their components, yet there is an absence of models that show how such costs are allocated for IS adoption. This underpins the necessity of the present research. Proposed here is a framework of nine sequential phases for accommodating indirect human costs. In addition to this, 1) three conjectures, 2) cost taxonomy and 3) an interrelationship-mapping cost driver model of IRCs, are proposed based on the literature analysis and underpinning the conceptual phases of the framework. To test the conjectures and validate the models proposed, a case research strategy using case settings were carried out in the private sector. Empirical findings validates the models proposed and reveal that indirect human costs are perceived as costs associated with IS adoption, nevertheless not included in the evaluation process or investment proposals. However, during the empirical research, new cost factors and drivers emerged, which resulted in modifications being made to the previously proposed conceptual models. In doing so, it provides investment decision-makers with novel frames of reference and an extensive list of IRCs that can be used during both the IS budget proposals and the evaluation process of the IS investment.

I slutet av 2019 drabbades omvärlden av en hotande sjukdom, som döptes till Covid-19. Denna sjukdom blev en pandemi som smittade över 180 miljoner människor runt om i världen. Pandemin ledde till att länder började införa så kallade “lockdowns”. Coronautbrottet skulle även medföra en ekonomisk chock för hela EU:s ekonomi och ledde till en genomsnittssänkning av BNP på 7,4% i Europa, vilket korrelerade med en sjunkande sysselsättningsgrad. Bland de olika branscher som behövde stå inför stora utmaningar relaterade till pandemin var idrottsbranschen en av de branscher som drabbades hårt. Denna studie handlar om coronapandemins påverkan på fyra fotbollsklubbar i Sveriges högsta serie, Allsvenskan. Studiens frågeställning bygger på syftet att få djupare kunskap och presentera hur Covid-19 har påverkat allsvenska fotbollsklubbars ekonomiska resultat vad gäller förlorade intäkter och kvarvarande kostnader samt agera underlag, med illustration på hur framtida kriser kan hanteras av idrottsföreningar. För att undersöka detta har de teoretiska begreppen intäktsoch kostnadsdrivare använts med målet att undersöka vilken typ av drivare för dessa intäkter och kostnader som har påverkats mest. Egenskaper i relationen mellan aktiviteter och drivare har studerats och tillämpats i denna studie. Studiens empiri har samlats in med ett kvalitativt tillvägagångssätt i form av semistrukturerade intervjuer som har utformats samt kompletterats med sekundärdata i form av årsredovisningar. Studiens resultat visar att pandemin har påverkat klubbarnas intäkter och kostnader i olika utsträckningar, med några intäkter och kostnader som har ökat samt andra intäkter och kostnader som har minskats, med anledning av förändring av respektive drivare. Klubbarnas omfattning och förutsättningar har varit en betydande faktor gällande vikten av respektive intäkt och kostnad. / At the end of 2019, the world was hit by a threatening disease, which was named Covid-19. This disease became a pandemic that infected over 180 million people around the world. The pandemic led to countries starting to introduce so-called "lockdowns". The corona outbreak would also bring an economic shock to the entire EU economy and led to an average reduction in GDP of 7.4% in Europe, which correlated with a falling employment rate. Among the various industries that had to face major challenges related to the pandemic, the sports industry was one of the industries that was affected the most. This study is about the impact of the corona pandemic on four football clubs in Sweden's highest league, Allsvenskan. The study's question is based on the aim of gaining deeper knowledge and presenting how Covid-19 has affected the financial results of Allsvenskan football clubs in terms of lost revenue and remaining costs, as well as acting as a basis, with an illustration of how future crisis can be handled by sports associations. To analyze this, the theoretical concepts of revenue and cost drivers have been used with the aim of investigating what type of drivers for those revenues and costs that have been most affected. Characteristics in the relationship between activities and drivers has been studied and applied in this study. The study's empirical evidence has been collected using a qualitative approach in the form of semi-structured interviews that have been designed and supplemented with secondary data in the form of annual reports. The results of the study show that the pandemic has affected the clubs' revenues and costs to different extents, with some revenues and costs having increased and other revenues and costs having been reduced, due to changes in the respective drivers. The size and conditions of the clubs have been a significant factor regarding the importance of the respective income and costs.

<p>During the last decade, Activity-Based Costing (ABC) has been recognized as a means to obtain more accurate and relevant information of product cost. Consultants have tried using the ABC concept as leverage for new projects, representatives from companies have attended seminars, and articles have been written on the theoretical foundations, the empirical justification, and on the implementation process. However, little progress seems to have been made despite of these activities. The question, whether ABC is the solution to the “Relevance Lost” or not, still remains to be answered. The research is based on a case study of an Ericsson company that has introduced Activity-Based Costing model for product costing. The purpose is to provide a critical evaluation and analysis of the existing model and to discuss how to “regain the relevance” of product costing through ABC. The study is conducted by interviewing relevant persons who are responsible for costing model and production process at Ericsson Mobile Communications AB in Linköping (ECS). Relevant documents during the implementation of ABC model have also been examined. Despite of a logical ABC model within ECS, the accuracy of cost information has not been improved. Many factors have been forgotten. Keeping costing model update, relating managers’ responsibility to activities performed and taking the cost of unused capacity into account are several examples. The study shows that ABCis not and will not be, however, the solution to the aging traditional product costing unless one uses it properly.</p>

<p>Bakgrund: Dagens industriföretag har ägnat mycket tid och tankeverksamhet åt att förbättra produktiviteten men i regel betydligt mindre till att beräkna enskilda produkters kostnader. Allt högre krav ställs på en kundanpassad produktion med differentierade produkter. Produkternas heterogenitet innebär även heterogen resursförbrukning och det gör det svårt att veta vilka kostnader en produkt verkligen orsakar. Inom ABC är det kostnadsdrivarens uppgift att koppla samman resursförbrukningen med produkterna. Valet av kostnadsdrivare kan ge stora effekter på produktens kostnad och visa att produkter som tidigare betraktas som lönsamma säljs med förlust.</p><p>Syfte: Syftet är att beskriva och analysera problematiken kring val av kostnadsdrivare.</p><p>Genomförande: En fallstudie har genomförts kring val av kostnadsdrivare vid Swedish Tissue.</p><p>Resultat: Det finns inga optimala kostnadsdrivare utan en komplex avvägning med kalkylens syfte i bakhuvudet krävs. Riktlinjen bör inte vara perfekt kausalitet utan minimering av totalkostnaden. Denna består av mätkostnad för kostnadsdrivaren och felkostnad orsakad av beslut baserade på kalkyler med brister i beroende på valet av kostnadsdrivare. Hänsyn måste även tas till beteendeeffekter som kostnadsdrivare medför, vilka kan vara avgörande. En avvägning måste göras mellan variablerna mätkostnad, felkostnad och beteendeeffekter men det är kontexten; företagets struktur, informationssystem och strategi, som avgör komplexiteten. I uppsatsen utvecklas en modell för att analysera totalkostnaden vid valet av kostnadsdrivare där de tre variablerna står i fokus.</p><p>Vid ledig kapacitet måste företag ha klart för sig hur de ska hantera kostnaden för denna innan valet av kostnadsdrivare sker, då valet kan påverka kalkylens lämplighet som styrningsverktyg. En analysmodell utvecklas med syftet att fungera som stöd vid beslutsfattande om hur ledig kapacitet skall hanteras.</p><p>Diskussionen kring problematiken vid ledig kapacitet bör kunna generaliseras till alla företag med ledig kapacitet allra helst företag i process- och tillverkningsindustrin. Problematiken som diskuteras med hjälp analysmodell II bör vara giltig, om än av olika vikt, för alla företag som använder sig av kostnadsdrivare men kanske även för alla som överhuvudtaget använder sig av kostnadsfördelning oavsett kalkylmetod.</p> / <p>Background: Today’s industrial concerns have devoted considerable time and attention to improve productivity, but usually significantly less to calculate individual product costs. The demand for customised production with differentiated products is continuously increasing. The product heterogeneity also leads to heterogenic resource consumption, which makes it hard to determine what costs a product causes. In ABC the cost driver’s function is to link the resource consumption with the products. The choice of cost drivers can have large effects on the product’s costs and reveal that products previously regarded profitable are sold with a loss.</p><p>Purpose: The purpose is to describe and analyse the difficulties regarding choice of cost drivers.</p><p>Completion: A case study concerning the choice of cost drivers has been carried out at Swedish Tissue.</p><p>Result: There are no optimal cost drivers. A complex assessment of the pros and cons has to be performed with the costing systems purpose taken into account. Perfect causality should not serve a guideline bur rather to minimize total cost. It includes the cost driver’s cost of measurement and cost of errors caused by decisions based on product costing systems allocating costs poorly caused by the choice of cost driver. Behavioural effects resulting from the choice must also be considered as they can be decisive. An assessment of these three variables has to be conducted, but it is the context, the company structure, the information system and the strategy that determines the complexity. A model for analysing total cost when choosing cost drivers has been developed, in which the three variables are in focus.</p><p>In case of free capacity companies must know how to handle its cost prior to choosing cost drivers. The choice can affect the appropriateness of the product costing system as a tool for management control. A model has been developed with the purpose to assist in decision making situation regarding handling of free capacity.</p><p>The discussion concerning free capacity difficulties should be possible to generalise to all companies with free capacity, but primarily to companies within the processing and manufacturing industries. The difficulties discussed by means of analysis model II should be valid, however of different importance, to all companies using cost drivers, but probably also for companies in general that practice cost allocation regardless of cost system</p>

During the last decade, Activity-Based Costing (ABC) has been recognized as a means to obtain more accurate and relevant information of product cost. Consultants have tried using the ABC concept as leverage for new projects, representatives from companies have attended seminars, and articles have been written on the theoretical foundations, the empirical justification, and on the implementation process. However, little progress seems to have been made despite of these activities. The question, whether ABC is the solution to the “Relevance Lost” or not, still remains to be answered. The research is based on a case study of an Ericsson company that has introduced Activity-Based Costing model for product costing. The purpose is to provide a critical evaluation and analysis of the existing model and to discuss how to “regain the relevance” of product costing through ABC. The study is conducted by interviewing relevant persons who are responsible for costing model and production process at Ericsson Mobile Communications AB in Linköping (ECS). Relevant documents during the implementation of ABC model have also been examined. Despite of a logical ABC model within ECS, the accuracy of cost information has not been improved. Many factors have been forgotten. Keeping costing model update, relating managers’ responsibility to activities performed and taking the cost of unused capacity into account are several examples. The study shows that ABCis not and will not be, however, the solution to the aging traditional product costing unless one uses it properly.

Bakgrund: Dagens industriföretag har ägnat mycket tid och tankeverksamhet åt att förbättra produktiviteten men i regel betydligt mindre till att beräkna enskilda produkters kostnader. Allt högre krav ställs på en kundanpassad produktion med differentierade produkter. Produkternas heterogenitet innebär även heterogen resursförbrukning och det gör det svårt att veta vilka kostnader en produkt verkligen orsakar. Inom ABC är det kostnadsdrivarens uppgift att koppla samman resursförbrukningen med produkterna. Valet av kostnadsdrivare kan ge stora effekter på produktens kostnad och visa att produkter som tidigare betraktas som lönsamma säljs med förlust. Syfte: Syftet är att beskriva och analysera problematiken kring val av kostnadsdrivare. Genomförande: En fallstudie har genomförts kring val av kostnadsdrivare vid Swedish Tissue. Resultat: Det finns inga optimala kostnadsdrivare utan en komplex avvägning med kalkylens syfte i bakhuvudet krävs. Riktlinjen bör inte vara perfekt kausalitet utan minimering av totalkostnaden. Denna består av mätkostnad för kostnadsdrivaren och felkostnad orsakad av beslut baserade på kalkyler med brister i beroende på valet av kostnadsdrivare. Hänsyn måste även tas till beteendeeffekter som kostnadsdrivare medför, vilka kan vara avgörande. En avvägning måste göras mellan variablerna mätkostnad, felkostnad och beteendeeffekter men det är kontexten; företagets struktur, informationssystem och strategi, som avgör komplexiteten. I uppsatsen utvecklas en modell för att analysera totalkostnaden vid valet av kostnadsdrivare där de tre variablerna står i fokus. Vid ledig kapacitet måste företag ha klart för sig hur de ska hantera kostnaden för denna innan valet av kostnadsdrivare sker, då valet kan påverka kalkylens lämplighet som styrningsverktyg. En analysmodell utvecklas med syftet att fungera som stöd vid beslutsfattande om hur ledig kapacitet skall hanteras. Diskussionen kring problematiken vid ledig kapacitet bör kunna generaliseras till alla företag med ledig kapacitet allra helst företag i process- och tillverkningsindustrin. Problematiken som diskuteras med hjälp analysmodell II bör vara giltig, om än av olika vikt, för alla företag som använder sig av kostnadsdrivare men kanske även för alla som överhuvudtaget använder sig av kostnadsfördelning oavsett kalkylmetod. / Background: Today’s industrial concerns have devoted considerable time and attention to improve productivity, but usually significantly less to calculate individual product costs. The demand for customised production with differentiated products is continuously increasing. The product heterogeneity also leads to heterogenic resource consumption, which makes it hard to determine what costs a product causes. In ABC the cost driver’s function is to link the resource consumption with the products. The choice of cost drivers can have large effects on the product’s costs and reveal that products previously regarded profitable are sold with a loss. Purpose: The purpose is to describe and analyse the difficulties regarding choice of cost drivers. Completion: A case study concerning the choice of cost drivers has been carried out at Swedish Tissue. Result: There are no optimal cost drivers. A complex assessment of the pros and cons has to be performed with the costing systems purpose taken into account. Perfect causality should not serve a guideline bur rather to minimize total cost. It includes the cost driver’s cost of measurement and cost of errors caused by decisions based on product costing systems allocating costs poorly caused by the choice of cost driver. Behavioural effects resulting from the choice must also be considered as they can be decisive. An assessment of these three variables has to be conducted, but it is the context, the company structure, the information system and the strategy that determines the complexity. A model for analysing total cost when choosing cost drivers has been developed, in which the three variables are in focus. In case of free capacity companies must know how to handle its cost prior to choosing cost drivers. The choice can affect the appropriateness of the product costing system as a tool for management control. A model has been developed with the purpose to assist in decision making situation regarding handling of free capacity. The discussion concerning free capacity difficulties should be possible to generalise to all companies with free capacity, but primarily to companies within the processing and manufacturing industries. The difficulties discussed by means of analysis model II should be valid, however of different importance, to all companies using cost drivers, but probably also for companies in general that practice cost allocation regardless of cost system

Background: According to the Council of Medical Schemes of South Africa (CMS, 2007:52), nearly seventeen percent of the total benefits paid during 2006 were for medicine. Medicine is thus a cost-driving contributor to total healthcare financing. There are various factors influencing and driving medicine usage and cost patterns, including inter alia provider preference, therapeutic committees, marketing and cost. Objectives: The purpose of this study was to identify the top twenty trade name products according to total cost and prevalence in a section of the private health care sector of South Africa, and to identify cost driving products. Methodology: A quantitative, retrospective drug utilisation review (DUR) study was performed on computerised medication records (medicine claims data) for two consecutive years (i.e. 2005 and 2006) that were obtained from a South African pharmaceutical benefit management company (PBM). The study population consisted of 1 218358 and 1 259 099 patients for 2005 and 2006 respectively. A total of 19 860 679 and 21 473017 medicine items that were claimed during 2005 and 2006 were included in the review. Descriptive statistics were used to describe the data, and were analysed using the Statistical Analysis System® SAS 9.1® programme. The cost prevalence index (CPI), developed by Serfontein (1989:180), was used as an indicator of the relative expensiveness of medicine. Resource- and activity driver products (cost driving products) were identified on the database by calculating the total cost of the product, the CPI of the product as well as the prevalence of the product. Variables for analysis included age, gender, prescriber and provider types. Resurts and discussion: A total number of 8 522 574 and 9 046 138 prescriptions were analysed, with an average of 2.33 ± 1.56 and 2.37 ± 1.58 items per prescription during 2005 and 2006 respectively. The average cost per prescription for the total database was R222.16 ± R463.13 for 2005 and R226.25 ± R557.49 for 2006. Members had to co-pay an average of R26.33 ± R102.70 per prescription in 2005 compared to R29.74 ± R103.96 per prescription in 2006. Children under the age of nine accounted for approximately 13% of the total study population, the adolescent age group < 9 and ≥ 19 years) represented 12%, age group three < 19 and ≥ 45 years) represented 38%, age group four < 45 and ≥ 59 years) represented 21% and the geriatric age group (patients older than 59 years) represented 16% of the total study population on the database. About 44% of the study population were male compared to 56% female patients. The top twenty trade name products ranked according to total cost represented about 13% (N=R1 893376 921.00 and N=R2 046 944382.50 in 2005 and 2006 respectively) of the overall medicine cost. The top five trade name products according to total cost for 2005 in descending order were Upitor 1 Omg and 20mg, Fosamax 70mg, Celebrex 200mg and Prexum 4mg. During 2006 the top five trade name products were similar except for Cipralex 10mg in the place of Celebrex 200mg. The CPls for all these products were above one; these products were also all activity drivers. The top twenty trade name products ranked according to prevalence represented about 11% (N=19 860679 and N=21 473074) of the total medicine prevalence for both study periods. The top five trade name products according to prevalence for both years contained Eltroxin 100mcg, Ecotrin 81 mg, Upitor 10mg and Alcophyllex syrup, with Myprodol capsules in 2005 and Mybulen tablets in 2006. Upitor 1 Omg was the only cost driver product in this list. General medical practitioners prescribed the largest quantity of medicine items and represented about 73% of all the medicine items on the database. The medicine prescribed by general medical prescribers accounted for 65% of the overall medicine expenditure on the database. Pharmacies can be seen as the main providers of medicine items. Pharmacies provided approximately 80% of the medicine items and represented over 91% of the total medicine expenditure. Cardiovascular agents were the main pharmacological group that represented the greatest percentage of the total medicine cost, about 19% in both study years. Cardiovascular agents were also positioned 1st according to prevalence and represented about 14% of the overall medicine prevalence in both the study periods. Conclusions and recommendations: Cost driver products can be seen as the products that drives medicine expenditure in the managed health care environment, thus driving the total cost of medicine treatment in the private health care sector of South Africa. Through the implementation of managed health care information- and management instruments medicine expenditure can be reduced. Recommendations for future research have been made. / Thesis (M. Pharm. (Pharmacy Practice))--North-West University, Potchefstroom Campus, 2009.

Background: According to the Council of Medical Schemes of South Africa (CMS, 2007:52), nearly seventeen percent of the total benefits paid during 2006 were for medicine. Medicine is thus a cost-driving contributor to total healthcare financing. There are various factors influencing and driving medicine usage and cost patterns, including inter alia provider preference, therapeutic committees, marketing and cost. Objectives: The purpose of this study was to identify the top twenty trade name products according to total cost and prevalence in a section of the private health care sector of South Africa, and to identify cost driving products. Methodology: A quantitative, retrospective drug utilisation review (DUR) study was performed on computerised medication records (medicine claims data) for two consecutive years (i.e. 2005 and 2006) that were obtained from a South African pharmaceutical benefit management company (PBM). The study population consisted of 1 218358 and 1 259 099 patients for 2005 and 2006 respectively. A total of 19 860 679 and 21 473017 medicine items that were claimed during 2005 and 2006 were included in the review. Descriptive statistics were used to describe the data, and were analysed using the Statistical Analysis System® SAS 9.1® programme. The cost prevalence index (CPI), developed by Serfontein (1989:180), was used as an indicator of the relative expensiveness of medicine. Resource- and activity driver products (cost driving products) were identified on the database by calculating the total cost of the product, the CPI of the product as well as the prevalence of the product. Variables for analysis included age, gender, prescriber and provider types. Resurts and discussion: A total number of 8 522 574 and 9 046 138 prescriptions were analysed, with an average of 2.33 ± 1.56 and 2.37 ± 1.58 items per prescription during 2005 and 2006 respectively. The average cost per prescription for the total database was R222.16 ± R463.13 for 2005 and R226.25 ± R557.49 for 2006. Members had to co-pay an average of R26.33 ± R102.70 per prescription in 2005 compared to R29.74 ± R103.96 per prescription in 2006. Children under the age of nine accounted for approximately 13% of the total study population, the adolescent age group < 9 and ≥ 19 years) represented 12%, age group three < 19 and ≥ 45 years) represented 38%, age group four < 45 and ≥ 59 years) represented 21% and the geriatric age group (patients older than 59 years) represented 16% of the total study population on the database. About 44% of the study population were male compared to 56% female patients. The top twenty trade name products ranked according to total cost represented about 13% (N=R1 893376 921.00 and N=R2 046 944382.50 in 2005 and 2006 respectively) of the overall medicine cost. The top five trade name products according to total cost for 2005 in descending order were Upitor 1 Omg and 20mg, Fosamax 70mg, Celebrex 200mg and Prexum 4mg. During 2006 the top five trade name products were similar except for Cipralex 10mg in the place of Celebrex 200mg. The CPls for all these products were above one; these products were also all activity drivers. The top twenty trade name products ranked according to prevalence represented about 11% (N=19 860679 and N=21 473074) of the total medicine prevalence for both study periods. The top five trade name products according to prevalence for both years contained Eltroxin 100mcg, Ecotrin 81 mg, Upitor 10mg and Alcophyllex syrup, with Myprodol capsules in 2005 and Mybulen tablets in 2006. Upitor 1 Omg was the only cost driver product in this list. General medical practitioners prescribed the largest quantity of medicine items and represented about 73% of all the medicine items on the database. The medicine prescribed by general medical prescribers accounted for 65% of the overall medicine expenditure on the database. Pharmacies can be seen as the main providers of medicine items. Pharmacies provided approximately 80% of the medicine items and represented over 91% of the total medicine expenditure. Cardiovascular agents were the main pharmacological group that represented the greatest percentage of the total medicine cost, about 19% in both study years. Cardiovascular agents were also positioned 1st according to prevalence and represented about 14% of the overall medicine prevalence in both the study periods. Conclusions and recommendations: Cost driver products can be seen as the products that drives medicine expenditure in the managed health care environment, thus driving the total cost of medicine treatment in the private health care sector of South Africa. Through the implementation of managed health care information- and management instruments medicine expenditure can be reduced. Recommendations for future research have been made. / Thesis (M. Pharm. (Pharmacy Practice))--North-West University, Potchefstroom Campus, 2009.