Current maximum fair price calculations (MFP) may not accurately capture the impact of therapeutics with multiple indications, and an analysis presented at the 2024 AMCP Nexus indicated that MFP calculations should consider factors other than dosage form and strength, such as multiple indications, unmet needs, health impact, economic burden, and more.
The Inflation Reduction Act (IRA) was signed into law in 2022 to increase the affordability and accessibility of prescription drugs. Drug price negotiation programs allow the Department of Health & Human Services to negotiate drug prices directly with manufacturers based on the MFP. Current guidance estimates average drug expenditure across dosages and formulations but does not consider the variability of indications and other impacts.
This retrospective cohort study assessed administrative claims from the Optum Research database of Medicare Prescription Drug (MAPD) enrollees between January 1, 2022, and December 31, 2022. The analysis identified the following high-spend drugs with four or more indications that are covered by the Centers for Medicare & Medicaid Services and not previously considered for IRA negotiations, including XTANDI®, JAKAFI®, TAGRISSO®, REPATHA®, COSENTYX®, OTEZLA®, and VRAYLAR®.
The analysis included over 5 million MAPD beneficiaries with at least one day of eligibility and a health care visit or prescription in 2022. The final study cohort included 27,337 individuals. The authors presented a case analysis of XTANDI;
- 28.5% were prescribed 40 mg capsules
- 53.7% were prescribed 40 mg tablets
- 17.8% were prescribed 80 mg tablets
However, 70.1% of patients were being treated for metastatic disease and 30.3% for non-metastatic disease, “as dosage did not vary widely by metastatic status,” the authors noted.
The authors argued that Medicare should consider a weighted approach reflecting the clinical value of medications across different indications, beyond just formulation options, and noted the value of these drugs depends on the unmet needs and clinical outcomes for each indication.
“These results demonstrate that the current IRA calculations may not accurately represent a product’s clinical value when establishing [an MFP],” the authors concluded.
Reference
Gratie D, Buikema A, Bandy S, et al. Does the maximum fair price accurately represent the value of multi-indication products? Abstract U17. Presented at the 2024 AMCP Nexus; Oct. 14–17, 2024; Las Vegas.
