Cost Concerns Need Not Limit Drug Options

As debate continues over whether to enact a public health plan in the United States, researchers from Canada and Australia assert that “the use of cost effectiveness in coverage decisions need not be an undue barrier to drug funding” by a national plan.

That goes “even for expensive medications, when there is robust evidence of effectiveness, at least in some patient subgroup,” Fiona M. Clement, Ph.D., of the University of Calgary (Alta.) and her colleagues reported.

Comparative effectiveness and cost-effectiveness research need not result in only either-or decisions, according to Dr. Clement and her colleagues. “Medications can be reimbursed in specific subgroups where they are felt to be cost effective or can be listed with a higher co-payment if choice and access to therapy are valued highly.”

Currently, the Food and Drug Administration does not take cost-effectiveness into consideration when approving medications, nor does Medicare when making coverage decisions.

The investigators looked at a total of 602 decisions by governmental agencies tasked with determining whether new drugs should be listed in public formularies in their respective countries: the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom, the Pharmaceutical Benefits Advisory Committee (PBAC) in Australia, and the Common Drug Review (CDR) in Canada.

The investigators made case studies of three high-cost drugs which were considered by all three agencies: ranibizumab (marketed as Lucentis in the United States); insulin glargine (Lantus), and teriparatide (Forteo).

Ranibizumab, which clinical studies showed to be highly effective for wet age-related macular degeneration, was approved by all three agencies, despite a high cost per monthly injection.

In the case of insulin glargine, which is three times more expensive than the already approved intermediate-acting insulin NPH, “although each of the committees agreed that insulin glargine offered small incremental benefits over insulin NPH, all felt that unrestricted use at the price submitted was not cost-effective,” the authors wrote. Nevertheless, out of the three agencies studied, only Canada's CDR denied coverage of the drug. Australia's PBAC negotiated an unrestricted benefit for Lantus in that country at a “confidential,” cheaper price after five resubmissions by the maker. And in the United Kingdom, the drug was still recommended for all type 1 diabetes patients, as well as for a subset of type 2 patients without restriction.

When it came to teriparatide, “each of the committees agreed that [the drug] had been shown to reduce the incidence of vertebral and nonvertebral fractures in comparison with placebo, but felt that bisphosphonates would have been a more appropriate comparator within randomized trials,” wrote the authors. While the CDR and PBAC denied coverage, NICE “felt that the use of this agent might be cost-effective in a small subgroup of patients with severe osteoporosis for whom bisphosphonates had failed, and listed it for this small subset of patients.”

The investigators concluded that “perhaps the main lesson from the experience of the three countries is that systematic, durable, and widely accepted decisions can be made using comparative effectiveness and cost effectiveness, although it is evident that other information beyond these two criteria can be incorporated into decision-making. Given that the number of expensive, targeted pharmaceuticals for cancer and other chronic conditions is increasing, pharmaceutical reimbursement will continue to be a key challenge to formularies in all countries.”

The study was funded by a grant from the Canadian Agency for Drugs and Technologies in Health. No individual financial disclosures were reported.

As debate continues over whether to enact a public health plan in the United States, researchers from Canada and Australia assert that “the use of cost effectiveness in coverage decisions need not be an undue barrier to drug funding” by a national plan.

That goes “even for expensive medications, when there is robust evidence of effectiveness, at least in some patient subgroup,” Fiona M. Clement, Ph.D., of the University of Calgary (Alta.) and her colleagues reported.

Comparative effectiveness and cost-effectiveness research need not result in only either-or decisions, according to Dr. Clement and her colleagues. “Medications can be reimbursed in specific subgroups where they are felt to be cost effective or can be listed with a higher co-payment if choice and access to therapy are valued highly.”

Currently, the Food and Drug Administration does not take cost-effectiveness into consideration when approving medications, nor does Medicare when making coverage decisions.

The investigators looked at a total of 602 decisions by governmental agencies tasked with determining whether new drugs should be listed in public formularies in their respective countries: the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom, the Pharmaceutical Benefits Advisory Committee (PBAC) in Australia, and the Common Drug Review (CDR) in Canada.

The investigators made case studies of three high-cost drugs which were considered by all three agencies: ranibizumab (marketed as Lucentis in the United States); insulin glargine (Lantus), and teriparatide (Forteo).

Ranibizumab, which clinical studies showed to be highly effective for wet age-related macular degeneration, was approved by all three agencies, despite a high cost per monthly injection.

In the case of insulin glargine, which is three times more expensive than the already approved intermediate-acting insulin NPH, “although each of the committees agreed that insulin glargine offered small incremental benefits over insulin NPH, all felt that unrestricted use at the price submitted was not cost-effective,” the authors wrote. Nevertheless, out of the three agencies studied, only Canada's CDR denied coverage of the drug. Australia's PBAC negotiated an unrestricted benefit for Lantus in that country at a “confidential,” cheaper price after five resubmissions by the maker. And in the United Kingdom, the drug was still recommended for all type 1 diabetes patients, as well as for a subset of type 2 patients without restriction.

When it came to teriparatide, “each of the committees agreed that [the drug] had been shown to reduce the incidence of vertebral and nonvertebral fractures in comparison with placebo, but felt that bisphosphonates would have been a more appropriate comparator within randomized trials,” wrote the authors. While the CDR and PBAC denied coverage, NICE “felt that the use of this agent might be cost-effective in a small subgroup of patients with severe osteoporosis for whom bisphosphonates had failed, and listed it for this small subset of patients.”

The investigators concluded that “perhaps the main lesson from the experience of the three countries is that systematic, durable, and widely accepted decisions can be made using comparative effectiveness and cost effectiveness, although it is evident that other information beyond these two criteria can be incorporated into decision-making. Given that the number of expensive, targeted pharmaceuticals for cancer and other chronic conditions is increasing, pharmaceutical reimbursement will continue to be a key challenge to formularies in all countries.”

The study was funded by a grant from the Canadian Agency for Drugs and Technologies in Health. No individual financial disclosures were reported.

As debate continues over whether to enact a public health plan in the United States, researchers from Canada and Australia assert that “the use of cost effectiveness in coverage decisions need not be an undue barrier to drug funding” by a national plan.

That goes “even for expensive medications, when there is robust evidence of effectiveness, at least in some patient subgroup,” Fiona M. Clement, Ph.D., of the University of Calgary (Alta.) and her colleagues reported.

Comparative effectiveness and cost-effectiveness research need not result in only either-or decisions, according to Dr. Clement and her colleagues. “Medications can be reimbursed in specific subgroups where they are felt to be cost effective or can be listed with a higher co-payment if choice and access to therapy are valued highly.”

Currently, the Food and Drug Administration does not take cost-effectiveness into consideration when approving medications, nor does Medicare when making coverage decisions.

The investigators looked at a total of 602 decisions by governmental agencies tasked with determining whether new drugs should be listed in public formularies in their respective countries: the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom, the Pharmaceutical Benefits Advisory Committee (PBAC) in Australia, and the Common Drug Review (CDR) in Canada.

The investigators made case studies of three high-cost drugs which were considered by all three agencies: ranibizumab (marketed as Lucentis in the United States); insulin glargine (Lantus), and teriparatide (Forteo).

Ranibizumab, which clinical studies showed to be highly effective for wet age-related macular degeneration, was approved by all three agencies, despite a high cost per monthly injection.

In the case of insulin glargine, which is three times more expensive than the already approved intermediate-acting insulin NPH, “although each of the committees agreed that insulin glargine offered small incremental benefits over insulin NPH, all felt that unrestricted use at the price submitted was not cost-effective,” the authors wrote. Nevertheless, out of the three agencies studied, only Canada's CDR denied coverage of the drug. Australia's PBAC negotiated an unrestricted benefit for Lantus in that country at a “confidential,” cheaper price after five resubmissions by the maker. And in the United Kingdom, the drug was still recommended for all type 1 diabetes patients, as well as for a subset of type 2 patients without restriction.

When it came to teriparatide, “each of the committees agreed that [the drug] had been shown to reduce the incidence of vertebral and nonvertebral fractures in comparison with placebo, but felt that bisphosphonates would have been a more appropriate comparator within randomized trials,” wrote the authors. While the CDR and PBAC denied coverage, NICE “felt that the use of this agent might be cost-effective in a small subgroup of patients with severe osteoporosis for whom bisphosphonates had failed, and listed it for this small subset of patients.”

The investigators concluded that “perhaps the main lesson from the experience of the three countries is that systematic, durable, and widely accepted decisions can be made using comparative effectiveness and cost effectiveness, although it is evident that other information beyond these two criteria can be incorporated into decision-making. Given that the number of expensive, targeted pharmaceuticals for cancer and other chronic conditions is increasing, pharmaceutical reimbursement will continue to be a key challenge to formularies in all countries.”

The study was funded by a grant from the Canadian Agency for Drugs and Technologies in Health. No individual financial disclosures were reported.