Price benchmarks of drugs selected for medicare price negotiation and their therapeutic alternatives

Hernandez, Inmaculada, Cousin, Emma M., Wouters, Olivier J. ORCID: 0000-0002-2514-476X, Gabriel, Nico, Cameron, Teresa and Sullivan, Sean D. (2024) Price benchmarks of drugs selected for medicare price negotiation and their therapeutic alternatives. Journal of Managed Care & Specialty Pharmacy, 30 (8). 762 - 772. ISSN 2376-1032

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Abstract

BACKGROUND: The Centers for Medicare and Medicaid Services (CMS) are currently negotiating prices with pharmaceutical manufacturers for the first 10 Part D drugs selected for Medicare drug price negotiation. Non–publicly available data, including the net prices of selected drugs and their therapeutic alternatives, will play a central role in the determination of the maximum fair prices (MFPs). OBJECTIVE: To estimate price benchmarks involved in the derivation of the starting point of the CMS initial price offer for the 10 drugs selected for Medicare price negotiation. METHODS: For the 10 drugs selected for negotiation, we reported (1) the list price, (2) the net price after manufacturer discounts, (3) the maximum negotiated price based on the minimum statutory discount, and (4) the ceiling of the MFP, estimated as the lowest of the latter 2. We also estimated net prices for therapeutic alternatives to the selected drugs. Net prices were estimated using peer-reviewed methodology that isolates commercial discounts negotiated between payers and manufacturers from mandatory discounts under government programs. All price benchmarks were estimated at the product level, for 30-day equivalent dosing, using 2021 data. RESULTS: 6 products (apixaban, rivaroxaban, empagliflozin, sacubitril/ valsartan, etanercept, and insulin aspart) had therapeutic alternatives with lower net prices, which will be integrated with clinical benefit data in the derivation of initial price offers. The other 4 products (ustekinumab, ibrutinib, sitagliptin, and dapagliflozin) had therapeutic alternatives with higher net prices than the drugs selected for negotiation. For ibrutinib and ustekinumab, prices based on the minimum discounts were considerably lower than the estimated net prices and will likely set the starting point of the initial price offer. For dapagliflozin and sitagliptin, the starting point of the initial price offer will likely resemble their existing net prices. CONCLUSIONS: Our analyses identify different negotiation scenarios for the first 10 drugs selected for Medicare price negotiation, based on key elements involved in the derivation of the initial price offer. Our analyses can help improve transparency in the negotiation process, because the CMS is not required to reveal the information used in the derivation of price offers.

Item Type:	Article
Additional Information:	© 2024 Academy of Managed Care Pharmacy
Divisions:	Health Policy
Subjects:	R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine R Medicine > RM Therapeutics. Pharmacology
Date Deposited:	05 Jun 2024 16:12
Last Modified:	18 Nov 2024 20:45
URI:	http://eprints.lse.ac.uk/id/eprint/123795

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