Li, Kevin H., Cousin, Emma M., Gabriel, Nico and Sullivan, Sean D. (2025) Integrating price benchmarks and comparative clinical effectiveness to predict initial price offers for Medicare Drug Price Negotiation (IPAY 2027). Value in Health. ISSN 1098-3015 (In Press)
Full text not available from this repository.Abstract
Objectives This study estimated initial price offers for the 15 drugs selected for the Medicare Drug Price Negotiation Program in the Initial Price Applicability Year (IPAY) 2027. Methods We applied the Centers for Medicare and Medicaid Services (CMS) guidance to construct a list of therapeutic alternatives for each drug. Price benchmarks included the statutory discount, Big Four / Federal Supply Schedule (FSS) prices, estimated Medicare Part D net prices, and wholesale acquisition cost. Comparative effectiveness evidence was extracted from peer-reviewed network meta-analyses, clinical guidelines, and Institute for Clinical and Economic Review assessments. Drugs were rated on a four-tier scale (A–D) based on comparative net health benefit. Initial offers were then estimated by applying market-based discounts depending on the availability and type (branded vs. generic) of therapeutic alternatives. Results For six drugs, statutory or Big Four/FSS prices anchored the estimated initial offers. Four drugs were informed by clinically comparable branded alternatives, leading to ∼20% reductions from net price. Two drugs with primarily generic alternatives received larger discounts of ∼30%. Three drugs with therapeutic alternatives previously negotiated in IPAY 2026 were assigned either the established Maximum Fair Price (MFP) or a market-based premium (semaglutide). Across all 15 drugs, estimated discounts ranged from 32–78% off list price and 16–56% off net price. Conclusions Our analysis highlights how CMS may incorporate statutory discounts, prior MFPs, and comparative effectiveness evidence into initial price offers, though uncertainty remains. An explicit health technology assessment framework could strengthen future negotiation cycles, unless international price referencing policy intercedes.
| Item Type: | Article |
|---|---|
| Additional Information: | © 2025, International Society for Pharmacoeconomics and Outcomes Research, Inc |
| Divisions: | Health Policy |
| Subjects: | R Medicine > RA Public aspects of medicine R Medicine > RM Therapeutics. Pharmacology |
| Date Deposited: | 07 Oct 2025 14:33 |
| Last Modified: | 07 Oct 2025 14:33 |
| URI: | http://eprints.lse.ac.uk/id/eprint/129710 |
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