Medicare drug price negotiation: the complexities of selecting therapeutic alternatives for estimating comparative effectiveness

Hernandez, Inmaculada, Cousin, Emma, Wouters, Olivier J. ORCID: 0000-0002-2514-476X, Gabriel, Nico, Cameron, Teresa and Sullivan, Sean D. (2024) Medicare drug price negotiation: the complexities of selecting therapeutic alternatives for estimating comparative effectiveness. Journal of Managed Care & Specialty Pharmacy, 30 (3). 218 - 225. ISSN 2376-1032

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Abstract

Under the 2022 Inflation Reduction Act, the Centers for Medicare and Medicaid Services (CMS) are able to negotiate prices for topselling drugs in the Medicare Part B and D programs. In determining initial price offers, CMS will compare the prices and clinical benefits of the drugs subject to negotiation to the prices and clinical benefits of therapeutic alternatives. Despite the central role that the selection of therapeutic alternatives will play in the price negotiations, the available guidance published by CMS provides few details about how the organization will undertake this process, which will be particularly complex for drugs approved for more than one indication. To better inform the selection process, we identified all US Food and Drug Administration-approved indications for the first 10 drugs subject to negotiation. Using 2020-2021 Medicare claims data, we identified Medicare Part D beneficiaries using each of the 10 drugs. We extracted medical claims with diagnosis codes for each of the approved indications to report the relative treated prevalence of use by indication for each drug. We reviewed published clinical guidelines to identify relevant therapeutic alternatives for each of the indications. We integrated the evidence on the relative treated prevalence of indications and clinical guidelines to propose therapeutic alternatives for each of the 10 drugs. We describe challenges that CMS may face in selecting therapeutic alternatives.

Item Type:	Article
Official URL:	https://www.jmcp.org/
Additional Information:	© 2023 Academy of Managed Care Pharmacy. You can view the final published version of the article on jmcp.org here: DOI: 10.18553/jmcp.2023.23277. Permission is given for readers to use the article for personal individual and noncommercial, permission for any other use must be secured from JMCP.
Divisions:	Health Policy
Subjects:	R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine R Medicine > RS Pharmacy and materia medica
Date Deposited:	22 Jan 2024 15:00
Last Modified:	08 Apr 2024 15:30
URI:	http://eprints.lse.ac.uk/id/eprint/121440

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