How rebates, copayments, and administration costs affect the cost-effectiveness of osteoporosis therapies.

PURPOSE: Because of rising drug expenditures, cost considerations have become essential, necessitating the requirement for cost-effectiveness analyses for managed care organizations (MCOs). The study objective is to examine the impact of various drug-cost components, in addition to wholesale acquisition cost (WAC), on the cost-effectiveness of osteoporosis therapies. DESIGN: A Markov model of osteoporosis was used to exemplify different drug cost scenarios. METHODOLOGY: We examined the effect of varying rebates for oral bisphosphonates--risedronate and ibandronate--as well as considering the impact of varying copayments and administration costs for intravenous zoledronate. The population modeled was 1,000 American women, > or = 50 years with osteoporosis. Patients were followed for 1 year to reflect an annual budget review of formularies by MCOs. The cost of therapy was based on an adjusted WAC, and is referred to as net drug cost. The total annual cost incurred by an MCO for each drug regimen was calculated using the net drug cost and fracture cost. We estimated cost on a quality adjusted life year (QALY) basis. PRINCIPAL FINDINGS: When considering different rebates, results for risedronate versus ibandronate vary from cost-savings (i.e., costs less and more effective) to approximately $70,000 per QALY. With no risedronate rebate, an ibandronate rebate of approximately 65% is required before cost per QALY surpasses $50,000. With rebates greater than 25% for risedronate, irrespective of ibandronate rebates, results become cost-saving. Results also showed the magnitude of cost savings to the MCO varied by as much as 65% when considering no administration cost and the highest coinsurance rate for zoledronate. CONCLUSION: Our study showed that cost-effectiveness varies considerably when factors in addition to the WAC are considered. This paper provides recommendations for pharmaceutical manufacturers and MCOs when developing and interpreting such analyses.

Modelling cost effectiveness of insulin glargine for the treatment of type 1 and 2 diabetes in Canada.

BACKGROUND AND OBJECTIVE: Intensive insulin therapy improves glycosylated haemoglobin (Hb(A1C)) levels and delays the onset of long-term diabetes-related complications. Current treatment guidelines recommend maintaining a glycosylated haemoglobin (Hb(A1C)) of < or = 7% in patients with type 1 and 2 diabetes mellitus. However, the risk of hypoglycaemia increases with lower Hb(A1C) levels. As such, patients often choose to settle for suboptimal glucose control in order to prevent hypoglycaemic events. At a given Hb(A1C) level, treatment with insulin glargine results in a lower risk of hypoglycaemia in type 1 and 2 diabetes compared with NPH insulin. It has been proposed that the lower hypoglycaemic risk will allow more patients to achieve target Hb(A1C) levels with insulin glargine compared with NPH insulin. The objective of this study was to assess the cost effectiveness of insulin glargine compared with NPH insulin in patients with type 1 or 2 diabetes who had inadequate glycaemic control. METHODS: A long-term, state-transition model was developed to simulate the natural history of type 1 and 2 diabetes. Risks of diabetes-related macro- and microvascular complications and mortality by Hb(A1C) levels were estimated based on the UKPDS (United Kingdom Prospective Diabetes Study). Outcome measures included complication rates and associated costs, insulin costs, life years (LYs) and QALYs. The baseline analysis was conducted for patients with type 1 and 2 diabetes (aged 27 and 53 years, respectively) with Hb(A1C) levels >7%, using a 36-year time horizon and a Canadian public payer perspective. Costs and effects were discounted at 5% per annum. Univariate sensitivity analyses were performed on key model inputs. All costs were reported in $Can (2005 values). RESULTS: The NPH insulin group had lower total costs than the insulin glargine group for patients with inadequately controlled diabetes (Hb(A1C) >7%; lifetime difference 1398 Can dollars and 1992 Can dollars, respectively, in type 1 and 2 diabetes). However, patients treated with insulin glargine had greater total and quality-adjusted life expectancy than those who received NPH insulin (incremental LY = 0.08 and QALYs = 0.07 in type 1 diabetes and incremental LY = 0.25 and QALYs = 0.23 in type 2 diabetes). The weighted incremental cost per LY gained and QALY gained were 18,661 Can dollars and 20,799 Can dollars, respectively, in type 1 diabetes and 8041 Can dollars and 8618 Can dollars, respectively, in type 2 diabetes (discounted results). CONCLUSIONS: The cost-effectiveness ratios for insulin glargine use for type 1 and 2 diabetes provide evidence for its adoption from a Canadian healthcare payer perspective.