Pharmaceutical pricing benchmarks: governmental versus private sector.

Purpose: To explore the best pricing benchmark for workers' compensation drugs reimbursement at retail pharmacies. Materials & methods: We used California workers' compensation system (CAWCS) total cost of pharmacy dispensed medications (2017-2019) as a proxy to estimate drug prices using alternative pricing mechanism fee schedules. Results: CAWCS paid 65.6% of the average wholesale price (AWP), 104.1% of Medi-Cal, 122.1% of the wholesale acquisition cost (WAC), 140.1% of the national average drug acquisition cost (NADAC), and 253.5% of the federal upper limit. In addition, we found the AWP-based formulas: CAWCS = AWP - 34.4%, Medi-Cal = AWP - 36.9%, WAC = AWP - 46.3%, NADAC = AWP - 53.2%, and federal upper limit = AWP - 74.1%. We found that AWP: 50% for generics and AWP - 18.2% for brands are the lowest paying formulas. The estimated median cost savings were $8.7 million (by adapting 97% of the WAC) and $9.5 million (by adapting the NADAC) across all states. Conclusion: NADAC was the best pricing benchmark for reimbursement of pharmacy dispensed drugs.

Treatment of venous leg ulcers using bilayered living cellular construct.

Background: Venous leg ulcers (VLUs) present a significant economic burden on the US healthcare system and payers (US$14.9 billion). Aim: To evaluate the quality of life (QoL) of patients with VLUs; to analyze the limitations of standard of care (SOC) for VLUs; and to explain how using bilayered living cellular construct (BLCC) with SOC for treatment of VLUs can help heal more VLUs faster (than using SOC alone) as well as help improve QoL and help reduce the burden on the US healthcare system and payers. Materials & methods: This is a review study. The search was conducted in February 2020 by way of electronic databases to find relevant articles that provided information related to QoL of patients with VLUs, limitations of SOC for VLUs and economic analyses of using BLCC for treatment of VLUs. Results: VLUs impact patients' physical, functional and psychological status and reduce QoL. A total 75% of VLU patients who used SOC alone failed to achieve healing in a timely fashion, which led to increased healthcare costs and healthcare resource utilization. Although the upfront cost is high, the greater effectiveness of BLCC offsets the added cost of the product during the time period of the studies. Therefore, BLCC helps to improve the QoL of VLU patients. As an example, for every 100 VLU patients in a healthcare plan, the use of BLCC can create cost savings of US$1,349,829.51. Conclusion: Payers' coverage of BLCC results in reduction of the overall medical cost for treating VLU patients.

Financial Impact of Alternative Pricing Benchmarks for Physician-Dispensed Drugs in the California Workers' Compensation System.

BACKGROUND: Pricing drugs in the California Workers' Compensation System (CAWCS) has become more difficult as there are increasingly fewer drugs listed in the Medi-Cal primary fee schedule, which is used as the source for CAWCS drug prices. This presents a challenge of providing timely and accurate CAWCS reimbursement. The objectives of this study are (1) to explore any trends in physician-dispensed drug prices; (2) to compare the proportion of drugs with and without a price and to determine the financial implications of repricing CAWCS physician-dispensed drugs with five alternative pricing benchmarks; and (3) to offer recommendations for the pricing benchmark to maximize pricing coverage and to remain budget neutral. METHODS: We evaluated physician-dispensed drugs at the transaction level, reimbursed in the CAWCS. Frequency, reimbursement rate, and total and average paid costs were reported. We matched each claim line in the CAWCS to the corresponding unit price of an alternative price benchmark including average wholesale price, wholesale acquisition cost, direct prices, national average drug acquisition cost, and Federal Upper Limit. RESULTS: Average wholesale price provided prices for 99.9% of physician-dispensed drug claims, while Medi-Cal, the current primary physician-dispensed drug benchmark provided prices for a lower percentage (92.7%) of claims. The CAWCS prices were equivalent to 49% of the average wholesale price, 95.5% of Medi-Cal, 126.7% of the wholesale acquisition cost, 266% of the Federal Upper Limit, 64.4% of direct prices, and 197% of national average drug acquisition cost-estimated prices. CONCLUSIONS: The CAWCS current Medi-Cal pricing for physician-dispensed drugs is better than all alternatives in terms of price availability, transparency, and budget neutrality, but pricing availability may decrease over time as Medi-Cal moves to managed care. National average drug acquisition cost is the next best alternative, but it requires combinations of pricing benchmarks to maximize its price availability.

The impact of alternative pricing methods for drugs in California Workers' Compensation System: Fee-schedule pricing.

INTRODUCTION: California's Workers' Compensation System (CAWCS) Department of Industrial Relations questioned the adequacy of the current Medi-Cal fee-schedule pricing and requested analysis of alternatives that maximize price availability and maintain budget neutrality. OBJECTIVES: To compare CAWCS pharmacy-dispensed (PD) drug prices under alternative fee schedules, and identify combinations of alternative benchmarks that have prices available for the largest percentage of PD drugs and that best reach budget neutrality. METHODS: Claims transaction-level data (2011-2013) from CAWCS were used to estimate total annual PD pharmaceutical payments. Medi-Cal pricing data was from the Workman's Compensation Insurance System (WCIS). Average Wholesale Prices (AWP), Wholesale Acquisition Costs (WAC), Direct Prices (DP), Federal Upper Limit (FUL) prices, and National Average Drug Acquisition Costs (NADAC) were from Medi-Span. We matched National Drug Codes (NDCs), pricing dates, and drug quantity for comparisons. We report pharmacy-dispensed (PD) claims frequency, reimbursement matching rate, and paid costs by CAWCS as the reference price against all alternative price benchmarks. RESULTS: Of 12,529,977 CAWCS claims for pharmaceutical products 11.6% (1,462,814) were for PD drugs. Prescription drug cost for CAWCS was over $152M; $63.9M, $47.9M, and $40.6M in 2011-2013. Ninety seven percent of these CAWCS PD claims had a Medi-Cal price. Alternative mechanisms provided a price for fewer claims; NADAC 94.23%, AWP 90.94%, FUL 73.11%, WAC 66.98%, and DP 14.33%. Among CAWCS drugs with no Medi-Cal price in PD claims, AWP, WAC, NADAC, DP, and FUL provided prices for 96.7%, 63.14%, 24.82%, 20.83%, and 15.08% of claims. Overall CAWCS paid 100.52% of Medi-Cal, 60% of AWP, 97% of WAC, 309.53% of FUL, 103.83% of DP, and 136.27% of NADAC. CONCLUSIONS: CAWCS current Medi-Cal fee-schedule price list for PD drugs is more complete than all alternative fee-schedules. However, all reimbursement approaches would require combinations of pricing benchmarks. We suggest keeping primary reimbursement at 100% of Medi-Cal and for drugs without a primary Medi-Cal price calculating the maximum fee as 60% of AWP and then 97% of WAC. Alternatively, we suggest using NADAC as a primary fee-schedule followed by either 60% AWP and 97% WAC or AWP-40% for drugs with no NADAC price. Fee-schedules may not offer the best price and a formulary approach may provide more flexibility.

Cost-effectiveness of different strategies for treatment relapsing-remitting multiple sclerosis.

AIM: To compare the cost-effectiveness of different disease-modifying therapies' strategies for treatment of relapsing-remitting multiple sclerosis. METHODS: A Markov model was developed to assess the cost-effectiveness and incremental cost-effectiveness ratios for different strategies of using disease-modifying therapies from a US third-party payer perspective. All costs were converted to 2014 US$. RESULTS: Over 20 years, the total costs per patient were estimated at US$161,136.60 for Strategy 1 (symptom management [SM] alone), US$551,650.66 for Strategy 2 (SM and IFN-ß-1a), US$703,463.60 for Strategy 3 (SM and natalizumab) and US$670,985.24 for Strategy 4 (SM and alemtuzumab). The accumulated quality-adjusted life years were 10.49, 10.66, 10.69 and 10.71 for each of the four Strategies 1-4, respectively. The resulting incremental cost-effectiveness ratios were 2,297,141.53 comparing Strategy 2 to Strategy 1, and -1,623,918.00 comparing Strategy 4 to Strategy 3. CONCLUSION: Strategy 1 was the cost-effective strategy for treatment of relapsing-remitting multiple sclerosis when compared with other strategies.

Evaluation of the Expanded Disability Status Scale and the Multiple Sclerosis Functional Composite as clinical endpoints in multiple sclerosis clinical trials: quantitative meta-analyses.

OBJECTIVES: This study compared the sensitivity of the Expanded Disability Status Scale (EDSS) and the Multiple Sclerosis Functional Composite (MSFC) as clinical endpoints in multiple sclerosis (MS) clinical trials. METHODS: Medline (1946 through 12 September 2014) and Embase (1974 through 12 September 2014) databases searches were conducted using keywords and Medical Subject Heading (MeSH) terms related to MS, EDSS, and MSFC. Only studies that used the EDSS and MSFC as endpoints were assessed. All statistical analyses were conducted using comprehensive meta-analysis (CMA). The percentages of the overall changes in EDSS and MSFC were compared. The relative risks were calculated in randomized clinical trials (RCTs). RESULTS: A total of 123 studies were identified. There were nine studies (6 case series and 3 RCTs) included in the analysis. In the case series, the EDSS change rate in MS patients was 33.5% (95% CI: 12.9-63.2%) and the MSFC change rate was 30.3% (95% CI: 9.2-65.2%). In RCTs, patients who take the drug would be 22.9 times as likely as patients who did not take the drug to experience a change in the EDSS scale (RR = 22.9, 95% CI = 0.996-1.517, p = 0.055). Patients who take the drug would be 48.9 times as likely as patients who did not take the drug to experience a change in the MSFC scale (RR = 48.9, 95% CI = CI = 0.916-2.419, p = 0.108). LIMITATIONS: This study focused only on MS patient improvement (positive changes) on the EDSS and MSFC. More studies are needed to include patient deterioration (negative changes) on EDSS and MSFC. CONCLUSIONS: There is controversy about the sensitivity of the EDSS and MSFC in detecting the progression of MS disease. The EDSS and MSFC are effective tools to assess the clinical severity and progression of MS disease. MSFC is more sensitive than EDSS in detecting the progression of MS disease.

Price analysis of multiple sclerosis disease-modifying therapies marketed in the United States.

OBJECTIVES: This study assessed trends in the average wholesale price (AWP) at the market entry of disease-modifying therapies (DMTs) approved by Food and Drug Administration (FDA) in the period 1987-2014. METHODS: DMT regulatory information was derived from the FDA website. The AWPs per unit at market entry data were derived from the Red Book (Truven Health Analytics Inc.). The AWP history for each DMT was collected from its date of approval to 31 December 2014. The FDA approved label defined daily dose (DDD) for adult patients was obtained from FDA approved labels. The AWP per DDD and the AWP/DDD per year of therapy were computed. Descriptive statistics, Wilcoxon tests, t-test, and multiple linear regression were performed. The statistical significance level was set at 0.05. RESULTS: The FDA approved 12 multiple sclerosis (MS) DMTs, including five new drug applications (NDAs) and seven biologic license applications (BLAs) as of 31 December 2014. The FDA granted orphan designation to five DMTs. There was one DMT approved by the FDA in the 1980s, three in the 1990s, three in 2000s, and five in the period 2010-2014. The market entry inflation-adjusted AWP per DDD was $10.23 for the first DMT (mitoxantrone hydrochloride) that was approved in the 1980s. The median market entry inflation-adjusted AWP per DDD was $12.41 (interquartile range [IQR] = 4.51) for DMTs approved in the 1990s, $71.26 (IQR = 58.35) in the 2000s, and $172.56 (IQR = 84.97) in the period 2010-2014. The median AWP per DDD was statistically significantly different (p = 0.011) for orphan (median = $41.82, IQR = 56.077) compared to non-orphan drugs (median = $171.32, IQR = 199.29). Year of market entry was positively associated with DMT prices at US market entry (p = 0.01). CONCLUSIONS: The AWP per DDD for DMTs at market entry increased substantially over time. The increase in DMTs prices exceeded the general consumer price index.