Using decision modeling to determine pricing of new pharmaceuticals: The case of neurokinin-1 receptor antagonist antiemetics for cancer chemotherapy

A toolkit of methods of development-focused health technology assessment

Health technology assessment conducted to inform decisions during technology development (development-focused or DF-HTA) has a number of distinct features compared with HTA conducted to inform reimbursement and usage decisions. In particular, there are a broad range of decisions to be informed related to the development of a technology; multiple markets and decision makers to be considered; a limited (and developing) evidence base; and constrained resources for analysis. These features impact upon methods adopted by analysts. In this paper, we (i) set out methods of DF-HTA against a timeline of technology development; (ii) provide examples of the methods’ use; and (iii) explain how they have been adapted as a result of the features of DF-HTA. We present a toolkit of methods for analysts working with developers of medical technologies. Three categories of methods are described: literature review, stakeholder consultation, and decision analytic modeling. Literature review and stakeholder consultation are often used to fill evidence gaps. Decision analytic modeling is used to synthesize available evidence alongside plausible assumptions to inform developers about price or performance requirements. Methods increase in formality and complexity as the development and evidence base progresses and more resources are available for assessment. We hope this toolkit will be used in conjunction with the framework of features of DF-HTA presented in our earlier article in order to improve the clarity and appropriateness of methods of HTA used in DF-HTA. We also seek to contribute to a continuing dialogue about the nature of, and the best approach to, DF-HTA.

Pricing of medical devices under coverage uncertainty--a modelling approach

Product vendors and manufacturers are increasingly aware that purchasers of health care will fund new clinical treatments only if they are perceived to deliver value-for-money. This influences companies' internal commercial decisions, including the price they set for their products. Other things being equal, there is a price threshold, which is the maximum price at which the device will be funded and which, if its value were known, would play a central role in price determination. This paper examines the problem of pricing a medical device from the vendor's point of view in the presence of uncertainty about what the price threshold will be. A formal solution is obtained by maximising the expected value of the net revenue function, assuming a Bayesian prior distribution for the price threshold. A least admissible price is identified. The model can also be used as a tool for analysing proposed pricing policies when no formal prior specification of uncertainty is available.

Advances in cancer therapeutics and patient access to new drugs

Globally, there are approximately 7.4 million cancer deaths annually, approximately 13% of deaths from all causes. Cancer is a disease of older people and, as the population ages over the next 10-20 years, we can expect an increase in the cancer incidence. Encouragingly, cancer mortality has stabilized in many countries. Part of this success may be attributed to the development of new cancer agents, collectively called 'targeted therapies', that are more specific to key components of tumour growth. Worldwide, however, one of the main factors that limit patient access to these important new drugs is their cost, which is higher than traditional chemotherapy. In this review, the clinical and pharmacoeconomic data of selected targeted agents are discussed. In the second part of this article, the challenges faced by healthcare systems in making such drugs available to patients is reviewed. Current strategies used by many countries around the world to manage cancer drug budgets are presented, along with a proposed approach using pharmacoeconomic methodology that may increase patient access.

Contribution of economic evaluation to decision making in early phases of product development: a methodological and empirical review

BACKGROUND

Economic evaluation as an integral part of health technology assessment is today mostly applied to established technologies. Evaluating healthcare innovations in their early states of development has recently attracted attention. Although it offers several benefits, it also holds methodological challenges.

OBJECTIVES

The aim of our study was to investigate the possible contributions of economic evaluation to industry's decision making early in product development and to confront the results with the actual use of early data in economic assessments.

METHODS

We conducted a literature research to detect methodological contributions as well as economic evaluations that used data from early phases of product development.

RESULTS

Economic analysis can be beneficially used in early phases of product development for various purposes including early market assessment, R&D portfolio management, and first estimations of pricing and reimbursement scenarios. Analytical tools available for these purposes have been identified. Numerous empirical works were detected, but most do not disclose any concrete decision context and could not be directly matched with the suggested applications.

CONCLUSIONS

Industry can benefit from starting economic evaluation early in product development in several ways. Empirical evidence suggests that there is still potential left unused.

Cost-effectiveness of aprepitant for the prevention of chemotherapy-induced nausea and vomiting associated with highly emetogenic chemotherapy

OBJECTIVE

Chemotherapy-induced nausea and vomiting (CINV) is a significant problem for cancer patients. Aprepitant, a novel NK-1 receptor antagonist, is approved for use with 5-HT3 antagonists and corticosteroids to prevent CINV associated with highly emetogenic chemotherapy. Nevertheless, the cost-effectiveness of standard aprepitant use has not been established.

METHODS

We developed a Markov model to compare three strategies for CINV: conventional treatment with a 5-HT3 antagonist and a corticosteroid, conventional treatment plus aprepitant, and conventional treatment with aprepitant added after the onset of CINV. Data from published clinical trials provided probabilities and utilities for the model. Data from the Centers for Medicare and Medicaid Services and the Federal Supply Scale provided costs for medical resources and medications utilized. Resource use data were based on a randomized clinical trial and routine clinical practice. The incremental cost-effectiveness ratio (ICER) for each aprepitant strategy was calculated in US$ per healthy day equivalent (HDE) and converted to dollars per quality-adjusted life-year (QALY). Univariate and probabilistic sensitivity analyses addressed uncertainty in model parameters.

RESULTS

Adding aprepitant after CINV occurred cost $264 per HDE ($96,333/QALY). The three-drug strategy cost $267/HDE with a 95% confidence range of $248-$305/HDE ($97,429/QALY; $90,396-$111,239/QALY). In univariate analyses, the most influential factors on the ICER were: the cost of aprepitant, the likelihood of delayed CINV without aprepitant, the likelihood of acute CINV with/without aprepitant, and the increase in HDE from avoiding CINV.

CONCLUSIONS

Aprepitant provides modest incremental benefits compared with conventional management of CINV. Routine aprepitant use appears most cost-effective when the likelihood of delayed CINV or the cost of rescue medications is high.