Adjusting starting points for initial price offers: the example of ibrutinib.

The Inflation Reduction Act of 2022 (IRA) allows the Medicare program to negotiate drug prices beginning in 2024. Based on the guidance in the statute, CMS has selected specific data items to use to adjust initial price offers for 10 drugs in the decision-making process. Although much of the data are publicly available, some of these data items will need to be collected directly from drug companies. A 2019 US House of Representatives Committee on Oversight and Accountability investigative report collected a wide range of data from manufacturers of 12 high-revenue drugs that show what is available from the drug companies, including development costs, marketing, pricing, competition, and patent status. This article focuses on the data obtained for ibrutinib, an oral medication for treating hematologic malignancies, which is one of the only drugs reviewed by the committee that also has been selected for Medicare price negotiation. We examine data that can be obtained only from the drug manufacturer that the IRA has explicitly identified as being used to determine the price and suggest potential negotiation strategies for CMS in response.

The increasing costs of medicines and their implications for patients, physicians and the health system.

Most new medicines entering the market are high-cost speciality drugs. These drugs can cost tens to hundreds of thousands of dollars per course of treatment and in some cases millions of dollars per dose. Approximately half of all spending on medicines is projected to target only 2-3% of patients, raising important questions about resource allocation. While there is no doubt that breakthrough innovations have transformed clinical care in some disciplines, it is also true that cost is becoming one of the primary barriers to treatment access and that many new medicines do not provide value commensurate with their prices. This article examines pricing trends, the reasons for high prices and their implications for access and clinical practice.

Trends in antidiabetic drug use and expenditure in public hospitals in Northwest China, 2012-21: a case study of Gansu Province.

BACKGROUND: Since the twenty-first century, the prevalence of diabetes has risen globally year by year. In Gansu Province, an economically underdeveloped province in northwest China, the cost of drugs for diabetes patients accounted for one-third of their total drug costs. To fundamentally reduce national drug expenditures and the burden of medication on the population, the relevant departments of government have continued to reform and improve drug policies. This study aimed to analyse long-term trends in antidiabetic drug use and expenditure in Gansu Province from 2012 to 2021 and to explore the role of pharmaceutical policy. METHODS: Data were obtained from the provincial centralised bidding and purchasing (CBP) platform. Drug use was quantified using the anatomical therapeutic chemistry/defined daily dose (ATC/DDD) method and standardised by DDD per 1000 inhabitants per day (DID), and drug expenditure was expressed in terms of the total amount and defined daily cost (DDC). Linear regression was used to analyse the trends and magnitude of drug use and expenditure. RESULTS: The overall trend in the use and expenditure of antidiabetic drugs was on the rise, with the use increasing from 1.04 in 2012 to 16.02 DID in 2021 and the expenditure increasing from 48.36 in 2012 to 496.42 million yuan in 2021 (from 7.66 to 76.95 million USD). Some new and expensive drugs changed in the use pattern, and their use and expenditure shares (as the percentage of all antidiabetic drugs) increased from 0 to 11.17% and 11.37%, but insulins and analogues and biguanides remained the most used drug class. The DDC of oral drugs all showed a decreasing trend, but essential medicines (EMs) and medical insurance drugs DDC gradually decreased with increasing use. The price reduction of the bid-winning drugs was over 40%, and the top three drugs were glimepiride 2mg/30, acarbose 50mg/30 and acarbose 100mg/30. CONCLUSIONS: The implementation of pharmaceutical policies has significantly increased drug use and expenditure while reducing drug prices, and the introduction of novel drugs and updated treatment guidelines has led to changes in use patterns.

Institutional Priority-Setting for Novel Drugs and Therapeutics: A Qualitative Systematic Review.

BACKGROUND: There is a lack of guidance on approaches to formulary management and funding for high-cost drugs and therapeutics by individual healthcare institutions. The objective of this review was to assess institutional approaches to resource allocation for such therapeutics, with a particular focus on paediatric and rare disease populations. METHODS: A search of Embase and MEDLINE was conducted for studies relevant to decision-making for off-formulary, high-cost drugs and therapeutics. Abstracts were evaluated for inclusion based on the Simple Multiple-Attribute Rating Techniques (SMART) criteria. A framework of 30 topics across 4 categories was used to guide data extraction and was based on findings from the initial abstract review and previous health technology assessment (HTA) publications. Reflexive thematic analysis was conducted using QSR NVivo 12 software. RESULTS: A total of 168 studies were included for analysis. Only 4 (2%) focused on paediatrics, while 21 (12%) centred on adults and the remainder (85%) did not specify. Thirty-two (19%) studies discussed the importance of high-cost therapeutics and 34 (23%) focused on rare/orphan drugs. Five themes were identified as being relevant to institutional decision-making for high-cost therapeutics: institutional strategy, substantive criteria, procedural considerations, guiding principles and frameworks, and operational activities. Each of these themes encompassed several sub-themes and was complemented by a sixth category specific to paediatrics and rare diseases. CONCLUSION: The rising cost of novel drugs and therapeutics underscores the need for robust, evidence-based, and ethically defensible decision-making processes for health technology funding, particularly at the hospital level. Our study highlights practices and themes to aid decision-makers in thinking critically about institutional, substantive, procedural, and operational considerations in support of legitimate decisions about institutional funding of high-cost drugs and therapeutics, as well as opportunities and challenges that exist for paediatric and rare disease populations.

The impact of willingness-to-pay threshold on price reduction recommendations for oncology drugs: a review of assessments conducted by the Canadian Agency for Drugs and Technologies in Health.

Since late 2020, the Canadian Agency of Drugs and Technologies in Health (CADTH) has been using a threshold of $50,000 (CAD) per quality-adjusted life-year (QALY) for both oncology and non-oncology drugs. When used for oncology products, this threshold is hypothesized to have a higher impact on the time to access these drugs in Canada. We studied the impact of price reductions on time to engagement and negotiation with the pan-Canadian Pharmaceutical Alliance for oncology drugs reviewed by CADTH between January 2020 and December 2022. Overall, 103 assessments reported data on price reductions recommended by CADTH to meet the cost-effectiveness threshold for reimbursement. Of these assessments, 57% (59/103) recommendations included a price reduction of greater than 70% off the list price. Eight percent (8/103) were not cost-effective even at a 100% price reduction. Of the 47 assessments that had a clear benefit, in 21 (45%) CADTH recommended a price reduction of at least 70%. The median time to price negotiation (not including time to engagement) for assessments that received at least 70% vs >70% price reduction was 2.6 vs 4.8 months. This study showed that there is a divergence between drug sponsor's incremental cost-effectiveness ratio (ICER) and CADTH revised ICER leading to a price reduction to meet the $50,000/QALY threshold. For the submissions with clear clinical benefit the median length of engagement (2.5 vs 3.3 months) and median length of negotiation (3.1 vs 3.6 months) were slightly shorter compared with the submissions where uncertainties were noted in the clinical benefit according to CADTH. This study shows that using a $50,000 per QALY threshold for oncology products potentially impacts timely access to life saving medications.

Pricing above value: Selling to a market with selection problems.

This paper shows that selection incentives in downstream markets distort upstream prices. It is possible for inputs to be priced above the value that the good has for final consumers. We apply this idea to pharmaceutical companies selling drugs to a health insurance market with selection problems. We specify the conditions under which drugs are sold at prices exceeding treatment value. Another feature of the model is an excessive private incentive to reduce market size, e.g. in the form of personalized medicine.

A Cross-National Comparison of Biosimilars Pricing in Argentina, Australia, Brazil, and Italy.

BACKGROUND: Biosimilar medicines are defined as biological products highly similar to an already licensed biological product (RP). The market entry of biosimilars is expected to reduce the costs of biological treatments. OBJECTIVE: This study aims to evaluate the range of differences between the prices of biosimilars and the corresponding RP for biologicals approved in four countries. METHOD: This is a cross-national comparison of pricing of biosimilars in Argentina, Australia, Brazil, and Italy. The study examined online price databases provided by the national authorities of the investigated countries. Biosimilar price difference was calculated by subtracting the unit price of the biosimilar by the unit price of the RP, and then dividing it by the unit price of the RP. The results were presented as percentage. RESULTS: Brazil had the highest median price reduction (- 36.3%) in biosimilars price, followed by Italy (- 20.0%) and Argentina (- 18.6%). All the biosimilars in Italy were priced below the RP presenting a minimum reduction of 6.3%, while in Australia, most of the prices of biosimilars were equal to the RP. In Argentina, one infliximab-biosimilar displayed price above the RP (40.7%) while the lower priced brand had a reduction of 14.4%. Brazil had four biosimilars with prices above the respective RP, including isophane insulin (1), insulin glargine (1) and somatropin (2). CONCLUSION: The study revealed a marked dispersion in the price's differences between biosimilars and RP across the studied countries. Governments should evaluate whether their policies have been successful in improving affordability of biological therapies.

Cost-effectiveness of the top 100 drugs by public spending in Canada, 2015-2021: a repeated cross-sectional study.

OBJECTIVES: To assess the distribution and spending by cost-effectiveness category among those drugs with the highest public spending levels in Canada. DESIGN: Repeated cross-sectional study. SETTING: The Canadian provinces of Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland. MAIN OUTCOMES AND MEASURES: Cost-effectiveness assessments by the Canadian Agency for Drugs and Technologies in Health (CADTH) for top-100 brand-name outpatient drugs by gross public plan spending in any year between 2015 and 2021 in Canada Institute for Health Information's National Prescription Drug Utilization Information System data. Gross public plan spending by cost-effectiveness category. RESULTS: From 2015 to 2021, 152 brand-name drugs occupied a top-100 rank and were included in the analysis. Of those, 117 had been assessed by CADTH. During the 7-year period, there was an increase in both top-100 drugs with cost-effective (from 18 to 24) and cost-ineffective (from 29 to 41) assessments, while drugs not assessed or with an unclear assessment declined (from 31 to 19 and from 22 to 16, respectively). As a share of spending on top-100 drugs with an assessment, spending on cost-effective drugs was mostly stable at 40%-46% from 2015 to 2021, while spending on cost-ineffective drugs increased from 30% to 45%. CONCLUSION: A large and growing share of public drug spending has been allocated to cost-ineffective drugs in Canada. Dedicating large budgets to such treatments prevents spending with greater health impact elsewhere in the healthcare system and could restrain the capacity to pay for groundbreaking pharmaceutical innovation in the future.

Patents on Risk Evaluation and Mitigation Strategies for Prescription Drugs and Generic Competition.

This cross-sectional study identifies the prevalence of patents on risk evaluation and mitigation strategies and their association with delaying generic competition.

Evaluation of Potential Urologic Prescription Drug Savings With Mark Cuban Cost Plus Drug Company.

INTRODUCTION: Mark Cuban Cost Plus Drug Company (MCCPDC) launched in 2022 with a goal to decrease prescription drug costs. Thus far, research has focused on possible savings if Medicare purchased its annual volume of drugs at MCCPDC prices. The aim of this study is to analyze if MCCPDC can offer savings directly to urologic patients compared with other mail-order pharmacies, local pharmacies, and with patients using health insurance. METHODS: Twelve drugs used to treat urological diseases available on MCCPDC were analyzed. Pricing data of 30-tab and 90-tab prescriptions from MCCPDC, other mail-order pharmacies, and local in-person pharmacies near our zip code 40508 (Lexington, Kentucky) were compiled. To compare if MCCPDC could offer savings to patients using health insurance to fill their prescriptions, out-of-pocket drug costs for patients from the 2020 and 2021 Medical Expenditure Panel Survey and the 2021 Medicare Part D spending data were extracted. RESULTS: Greater savings at MCCPDC were found at 90-tab prescriptions, but overall variability in prices existed. When comparing without health insurance, 9 of 12 drugs at MCCPDC were cheaper at 90 tabs with solifenacin and tadalafil saving $20 and $12 per prescription. When considering patients using insurance, abiraterone, sildenafil, and tadalafil offered savings on out-of-pocket costs at 30- and 90-tab prescriptions. CONCLUSIONS: MCCPDC may offer cheaper prices for patients filling urologic medications, especially at 90-tab prescriptions. This study is the first to show patients could save money using MCCPDC and has implications for physician counseling when prescribing common urologic drugs.

Budget Impact of Introducing Fixed-Duration Mosunetuzumab for the Treatment of Relapsed or Refractory Follicular Lymphoma After Two or More Lines of Systemic Therapy in the USA.

OBJECTIVE: This study aimed to assess the budget impact of introducing fixed-duration mosunetuzumab as a treatment option for adult patients with relapsed or refractory follicular lymphoma after at least two prior systemic therapies and to estimate the total cumulative costs per patient in the USA. METHODS: A 3-year budget impact model was developed for a hypothetical 1-million-member cohort enrolled in a mixed commercial/Medicare health plan. Comparators were: axicabtagene ciloleucel, tisagenlecleucel, tazemetostat, rituximab plus lenalidomide, copanlisib, and older therapies (rituximab or obinutuzumab ± chemotherapy). Costs per patient comprised treatment-associated costs including the drug, its administration, adverse events, and routine care. Dosing and safety data were ascertained from respective package inserts and clinical trial data. Drug costs (March 2023) were estimated based on the average wholesale acquisition cost reported in AnalySource®, and all other costs were based on published sources and inflated to 2022 US dollars. Market shares were obtained from Genentech internal projections and expert opinion. Budget impact outcomes were presented on a per-member per-month basis. RESULTS: Compared with a scenario without mosunetuzumab, its introduction over 3 years resulted in a budget increase of $69,812 (1% increase) and an average per-member per-month budget impact of $0.0019. Among the newer therapies, mosunetuzumab had the second-lowest cumulative per patient cost (mosunetuzumab = $202,039; axicabtagene ciloleucel = $505,845; tisagenlecleucel = $476,293; rituximab plus lenalidomide = $263,520; tazemetostat = $250,665; copanlisib = $127,293) and drug costs, and its introduction only increased total drug costs by 0.1%. By year 3, the cumulative difference in the per patient cost with mosunetuzumab was -$303,805 versus axicabtagene ciloleucel, -$274,254 versus tisagenlecleucel, -$61,481 versus rituximab plus lenalidomide, -$48,625 versus tazemetostat, and $74,747 versus copanlisib. Older therapies were less costly with 3-year cumulative costs that ranged from $36,512 to $147,885. CONCLUSIONS: Over 3 years, the estimated cumulative per patient cost of mosunetuzumab is lower than most available newer therapies, resulting in a small increase in the budget after its formulary adoption for the treatment of relapsed or refractory follicular lymphoma.

Measuring Costs of Cardiovascular Disease Prevention for Patients with Familial Hypercholesterolemia in Administrative Claims Data.

INTRODUCTION: Familial hypercholesterolemia is a common genetic condition that significantly increases an individual's risk of cardiovascular events such as heart attack, stroke, and cardiac death and is a candidate for population-wide screening programs. Economic analyses of strategies to identify and treat familial hypercholesterolemia are limited by a lack of real-world cost estimates for screening services and medications for reducing cardiovascular risk in this population. METHODS: We estimated the cost of lipid panel testing in patients with hyperlipidemia and the cost of statins, ezetimibe, and PCKS9 inhibitors in patients with familial hypercholesterolemia from a commercial claims database and report costs and charges per panel and prescription by days' supply. RESULTS: The mean cost for a 90-day supply for statins was $183.33, 2.3 times the mean cost for a 30-day supply at $79.35. PCSK9 inhibitors generated the highest mean costs among medications used by patients with familial hypercholesterolemia. CONCLUSIONS: Lipid testing and lipid-lowering medications for cardiovascular disease prevention generate substantial real-world costs which can be used to improve cost-effectiveness models of familial hypercholesterolemia screening and care management.