Incorporating Added Therapeutic Benefit and Domestic Reference Pricing Into Medicare Payment for Expensive Part B Drugs

OBJECTIVES

Identify expensive Part B drugs and evidence for each drug's added benefit and model a reimbursement policy for Medicare that integrates added benefit assessment and domestic reference pricing.

METHODS

A retrospective analysis using a 20% nationally representative sample of 2015 to 2019 traditional Medicare Part B claims. Expensive drugs were defined as having average annual spending per beneficiary exceeding the average annual social security benefit ($17 532 in 2019). For expensive drugs identified in 2019, added benefit assessments conducted by the French Haute Autorité de Santé were collected. For expensive drugs with a low added benefit rating, comparator drugs were identified in French Haute Autorité de Santé reports. For each comparator, average annual spending per beneficiary in Part B was computed. Potential savings from 2 reference pricing scenarios were calculated: reimbursing expensive Part B drugs with low added benefit at the level of each drug's (1) lowest cost comparator and (2) beneficiary-weighted-average cost of all comparators.

RESULTS

The number of expensive Part B drugs grew from 56 in 2015 to 92 in 2019. Of the 92 expensive drugs in 2019, 34 offer low added benefit. Implementing reference pricing for these expensive drugs with low added benefit could have saved an estimated $2.1 billion if prices were set based on spending for their lowest cost comparator, or $1 billion if prices were set based on the weighted average of spending for comparators.

CONCLUSION

Reference pricing based on added benefit assessment could be used to address the launch prices for expensive Part B drugs with low added benefit.

The current situation regarding the availability and accessibility of anticancer drugs for breast cancer in the Peruvian public health systems

The availability of effective, accessible, safe and high-quality anticancer drugs for the medical treatment of cancer is fundamental in ensuring optimal healthcare in the public health system in Peru. The main objective is to assess the current situation regarding anticancer drugs (termed ‘high-cost’) for breast cancer, as well as an analysis of the possible factors which negatively impact access to the Peruvian public health systems.There are similarities in the availability of anticancer drugs, since most treatments are covered by the Peruvian Ministry of Health. EsSalud offers an extra monoclonal antibody (pertuzumab) in the metastatic treatment stage. Meanwhile, the National Institute of Neoplastic Diseases (INEN), mainly for metastatic disease, has relied on more tested treatments over the last year. An agreement has been reached with the armed forces, which will enable patients to receive oncology care at the INEN and, thereby, benefit from the use of high-cost drugs.

Constructing 'exceptionality': a neglected aspect of NHS rationing

In the British NHS the principle of exceptionality involves assessing whether a patient is sufficiently different from the generality of patients to justify providing a treatment, such as an expensive cancer drug, not approved for routine funding. In England, individual requests for certain high-cost treatments are considered by local panels that examine exceptionality alongside treatment efficacy and cost as the main criteria for funding. This was also the case in Wales until September 2017. Our paper draws on audio recordings of panel meetings and interviews in a Welsh Health Board to investigate how exceptionality was constructed in discussions. It focuses on the problematic combination of different decision criteria in meeting talk, particularly regarding the discourses associated with efficacy and exceptionality. Exceptionality is a fluid category that raised questions about the evidence-based nature of panel decision making. In particular, the paper discusses the use of subgroup data from RCTs and the difficulty of deciding how small a subgroup of patients should be before it is deemed exceptional. Determining exceptionality has been an important mechanism for deciding that a minority of NHS patients can still receive high-cost treatments not routinely provided for all. As a neglected rationing mechanism it warrants sociological examination.

Breaking the Bank: Three Financing Models for Addressing the Drug Innovation Cost Crisis

BACKGROUND

The introduction of innovative specialty pharmaceuticals with high prices has renewed efforts by public and private healthcare payers to constrain their utilization, increase patient cost-sharing, and compel government intervention on pricing. These efforts, although rational for individual payers, have the potential to undermine the public health impact and overall economic value of these innovations for society. The emerging archetypal example is the outcry over the cost of sofosbuvir, a drug proved to cure hepatitis C infection at a cost of $84,000 per person for a course of treatment (or $1000 per tablet). This represents a radical medical breakthrough for public health, with great promise for the long-term costs associated with this disease, but with major short-term cost implications for the budgets of healthcare payers.

OBJECTIVES

To propose potential financing models to provide a workable and lasting solution that directly addresses the misalignment of incentives between healthcare payers confronted with the high upfront costs of innovative specialty drugs and the rest of the US healthcare system, and to articulate these in the context of the historic struggle over paying for innovation.

DISCUSSION

We describe 3 innovative financing models to manage expensive specialty drugs that will significantly reduce the direct, immediate cost burden of these drugs to public and private healthcare payers. The 3 financing models include high-cost drug mortgages, high-cost drugs reinsurance, and high-cost drug patient rebates. These models have been proved successful in other areas and should be adopted into healthcare to mitigate the high-cost of specialty drugs. We discuss the distribution of this burden over time and across the healthcare system, and we match the financial burden of medical innovations to the healthcare stakeholders who capture their overall value. All 3 models work within or replicate the current healthcare marketplace mechanisms for distributing immediate high-cost events across multiple at-risk stakeholders, and/or encouraging active participation by patients as consumers.

CONCLUSION

The adoption of these 3 models for the financing of high-cost drugs would ameliorate decades-long economic conflict in the healthcare system over the value of, and financial responsibility for, drug innovation.