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. 2024 Aug;30(8):762-772.
doi: 10.18553/jmcp.2024.24153. Epub 2024 Jun 21.

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

Inmaculada Hernandez  1 , Emma M Cousin  2 , Olivier J Wouters  3 , Nico Gabriel  1 , Teresa Cameron  1 , Sean D Sullivan  2   3
Affiliations

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

Inmaculada Hernandez et al. J Manag Care Spec Pharm. 2024 Aug.

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.

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Conflict of interest statement

Dr Hernandez reported receiving consulting fees from Pfizer and Bristol Myers Squibb outside the submitted work. Dr Wouters reported receiving personal fees from the World Bank and World Health Organization outside the submitted work. Dr Sullivan reported receiving consulting fees from Sanofi, Pfizer, and Novo Nordisk outside the submitted work. No other disclosures were reported.

Figures

FIGURE 1
FIGURE 1
Price Benchmarks for Apixaban
FIGURE 2
FIGURE 2
Price Benchmarks for Rivaroxaban
FIGURE 3
FIGURE 3
Price Benchmarks for Empagliflozin
FIGURE 4
FIGURE 4
Price Benchmarks for Dapagliflozin
FIGURE 5
FIGURE 5
Price Benchmarks for Sitagliptin
FIGURE 6
FIGURE 6
Price Benchmarks for Ustekinumab (Psoriasis and Psoriatic Arthritis)
FIGURE 7
FIGURE 7
Price Benchmarks for Ibrutinib
FIGURE 8
FIGURE 8
Price Benchmarks for Sacubitril/Valsartan
FIGURE 9
FIGURE 9
Price Benchmarks for Etanercept
FIGURE 10
FIGURE 10
Price Benchmarks for Insulin Aspart
See this image and copyright information in PMC

References

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    1. Dickson S, Gabriel N, Gellad WF, Hernandez I. Assessment of voluntary and mandatory discounts in the gross-to-net bubble for leading insulin products, 2012-2019. JAMA Netw Open. 2023;6(6):e2318145. doi:10.1001/jamanetworkopen.2023.18145 - PMC - PubMed
    1. Dickson S, Gabriel N, Gellad WF, Hernandez I. Estimated changes in insulin prices and discounts after entry of new insulin products, 2012-2019. JAMA Health Forum. 2023;4(6):e231430. doi:10.1001/jamahealthforum.2023.1430 - PMC - PubMed
    1. Hernandez I, Cousin EM, Wouters OJ, Gabriel N, Cameron T, Sullivan SD. Medicare drug price negotiation: The complexities of selecting therapeutic alternatives for estimating comparative effectiveness. J Manag Care Spec Pharm. 2024;30(3):218-25. doi:10.18553/jmcp.2023.23277 - PMC - PubMed

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