On 2016 Jan 25, Andrea Messori commented:

Application of the budget-threshold pricing model to PCSK9 inhibitors: detailed description of the the pharmacoeconomic calculations

By Andrea Messori, HTA Unit, Regional Health Service, 50100 Firenze (Italy)

                                                                                                        .

Table 1 of this Comment describes in detail the calculation steps that, in the budget-threshold pricing model developed by the Institute for Clinical and Economic Review (ICER), lead to the estimation of the annual treatment cost of $2,177 per patient.

                                                                                                        .

Table 1. Price estimation method proposed by ICER for PCSK9 inhibitors: steps involved in the estimation of the annual treatment cost of $2,177 per patient

        Parameter                                                             Estimate  

A) Total drug spending …………………. : $410 billion (estimated as 13.3% of $3.08 trillion, which is the total health care spending).

B) Annual threshold for net health care

cost growth for ALL new drugs.............…: $ 15.4 billion (3.75% of $410 billion, where 3.75% is the growth in US GDP, 2015-2016+1%).

C) Annual threshold for

average cost growth per

individual new molecular

entity....................................................... : $452 million (estimated as $15.4 billion/34, where 34 is the average annual FDA entity

                                                                    approvals, 2013-2014). 

D) Annual threshold for estimated potential

budget impact for each individual new

molecular entity…………………….....……: $904 million (estimated as 2 x $452 million).*

E) Five-year annual budget impact

threshold per new moldecular entity........… : $4.52 trillion (calculated as 5 x $904 million).

F) Total five-year health-care savings for<br> each PCSK9 inhibitor……....................…… : $1.22 trillion (estimated by ICER).

G) Five-year annual budget impact

threshold per each PCSK inhibitor

corrected according to health-care

savings…..............…………................….… : $5.74 trillion [sum of (E)+(F)]

H) Annual treatment cost per patient for

each PCSK9 inhibitor………………………… $2,177 (estimated as $5.74 trillion / 2,636,179 (assuming that 2,636,179 patients are treated).

*This step is not perfectly clear. |It seems that the maximum absolute budget allowed to a new molecular entity is the double of the budget expected on average for a new molecular entity.

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

None

On 2016 Jan 25, Andrea Messori commented:

Application of the budget-threshold pricing model to PCSK9 inhibitors: detailed description of the the pharmacoeconomic calculations

By Andrea Messori, HTA Unit, Regional Health Service, 50100 Firenze (Italy)

                                                                                                        .

Table 1 of this Comment describes in detail the calculation steps that, in the budget-threshold pricing model developed by the Institute for Clinical and Economic Review (ICER), lead to the estimation of the annual treatment cost of $2,177 per patient.

                                                                                                        .

Table 1. Price estimation method proposed by ICER for PCSK9 inhibitors: steps involved in the estimation of the annual treatment cost of $2,177 per patient

        Parameter                                                             Estimate  

A) Total drug spending …………………. : $410 billion (estimated as 13.3% of $3.08 trillion, which is the total health care spending).

B) Annual threshold for net health care

cost growth for ALL new drugs.............…: $ 15.4 billion (3.75% of $410 billion, where 3.75% is the growth in US GDP, 2015-2016+1%).

C) Annual threshold for

average cost growth per

individual new molecular

entity....................................................... : $452 million (estimated as $15.4 billion/34, where 34 is the average annual FDA entity

                                                                    approvals, 2013-2014). 

D) Annual threshold for estimated potential

budget impact for each individual new

molecular entity…………………….....……: $904 million (estimated as 2 x $452 million).*

E) Five-year annual budget impact

threshold per new moldecular entity........… : $4.52 trillion (calculated as 5 x $904 million).

F) Total five-year health-care savings for<br> each PCSK9 inhibitor……....................…… : $1.22 trillion (estimated by ICER).

G) Five-year annual budget impact

threshold per each PCSK inhibitor

corrected according to health-care

savings…..............…………................….… : $5.74 trillion [sum of (E)+(F)]

H) Annual treatment cost per patient for

each PCSK9 inhibitor………………………… $2,177 (estimated as $5.74 trillion / 2,636,179 (assuming that 2,636,179 patients are treated).

*This step is not perfectly clear. |It seems that the maximum absolute budget allowed to a new molecular entity is the double of the budget expected on average for a new molecular entity.