Designing a Value-Based Formulary for a Commercial Health Plan: A Simulated Case Study of Diabetes Medications

Tackling Challenges in Assessing the Economic Value of Tumor-Agnostic Therapies: A Cost-Effectiveness Analysis of Pembrolizumab as a Case Study

OBJECTIVES

Assessing the value of tumor-agnostic drugs (TAD) is challenging given the potential variability in treatment effects, trials with small sample sizes, different standards of care (SoC), and lack of comparative data from single-arm basket trials. Our study developed and applied novel methods to assess the value of pembrolizumab compared with SoC to inform coverage decisions.

METHODS

We developed a partitioned survival model to evaluate the cost-utility of pembrolizumab for previously treated patients with 8 advanced or metastatic microsatellite instability-high or mismatch repair-deficient cancers from a US commercial payer perspective. Efficacy of pembrolizumab was based on data from trials directly or with adjustment using Bayesian hierarchical models. Eight chemotherapy-based external control arms were constructed from the TriNetX electronic health record databases. Tumor-specific health-state utility values were applied. All costs were adjusted to 2022 US dollars.

RESULTS

At a lifetime horizon, pembrolizumab was associated with increased effectiveness compared with chemotherapies in colorectal (quality-adjusted life years [QALYs]: +0.64, life years [LYs]: +0.64), endometrial (QALYs: +3.79, LYs: +5.47), and small intestine cancers (QALYs: +1.73, LYs: +2.48), but not for patients with metastatic gastric, cholangiocarcinoma, pancreatic, ovarian, and brain cancers. Incremental cost-effectiveness ratios varied substantially across tumor types. Pembrolizumab was found to be cost-effective in treating colorectal and endometrial cancers (incremental cost-effectiveness ratios: $121 967 and $139 257, respectively), and not cost-effective for other assessed cancers at a $150 000 willingness-to-pay/QALY threshold, compared with SoC chemotherapies.

CONCLUSIONS

The cost-effectiveness of TADs can vary by cancers. Using analytic tools such as external controls and Bayesian hierarchical models can tackle several challenges in assessing the value of TADs and uncertainties from basket trials.

A primer on formulary structures and strategies

Formularies are a tool for managing costs, optimizing patient access, and improving overall health outcomes. The general goal of formularies is to provide access to appropriate therapy while promoting effective resource utilization, which allows the managed care pharmacy organization to operate sustainably. Traditional formulary strategies have included open and closed formularies as well as tiered formularies. However, other formulary structures have emerged in support of the focus on product value. The formulary development process is primarily driven by the pharmacy and therapeutics (P&T) committee and value committee within an organization. Key considerations such as member population, regional differences, regulatory/compliance implications, and benefit design strategies may influence payers to create a customized formulary to provide additional value to their members while managing costs. With the rise of high-cost and specialty products, formularies continue to serve as an important tool for managed care pharmacy organizations. Ongoing trends, such as biosimilars, prescription digital therapeutics, and addressing health equity, will shape future strategy and management of formularies.