Study Finds Variability of Cost-Effectiveness Ratios in Biologic Treatment Cases Due to Price Dynamics

Cost-effectiveness ratios of biologic treatments varied with pre-loss of exclusivity (LOE) price increase, post-LOE price decrease, and comparator impact, according to a study published in Value in Health.

“Two biologic treatment cases incorporating price dynamics in cost-effectiveness analyses had varied impacts on the cost-effectiveness ratio depending on the magnitude of pre-LOE price increase and post-LOE price decrease and whether the LOE also affected the comparator,” wrote Stephen Kogut, PhD, MBA, of the Department of Pharmacy Practice, University of Rhode Island College of Pharmacy in Kingston, and study coauthors.

In the tezepelumab case study, the drug had a yearly price increase of 2% during the period of exclusivity. After the period of exclusivity ended, the price decreased by 25%, resulting in an incremental cost per quality-adjusted life-year (QALY) gained. This incremental cost per QALY gained increased from $430,300 to $444,600, a 3.2% increase. However, when the drug had yearly price increases of 2% followed by a steeper post-LOE price reduction of 40%, the cost per QALY gained was $401,400, a 6.8% reduction compared with the base case.

In a case study of rheumatoid arthritis, the costs and benefits of incorporating post-LOE price reductions for etanercept (intervention) and adalimumab (comparator), ranging from 25% to 40% were evaluated. The incremental cost per QALY (quality-adjusted life year) for both drugs was around $121,000 to $122,300, which was less than a 3% increase from the base case of $119,200/QALY. However, when a 2% yearly price increase was factored in for the projected exclusivity periods of both drugs, the cost per QALY increased by over 60%.

“Yearly price increase magnitude during the period of exclusivity, among other factors, may counterbalance the effects of lower post-LOE intervention prices,” researchers wrote.

Reference

Kogut SJ, Campbell JD, Pearson SD. The influence of US drug price dynamics on cost-effectiveness analyses of biologics. Value in Health. 2023;26(3):378-383. doi:10.1016/j.jval.2022.12.010