Cost-Effectiveness and Value-Based Pricing of Aducanumab for Patients With Early Alzheimer Disease

Introduction:Aducanumab was granted accelerated approval with a conflicting evidence base, near-unanimous FDA Advisory Committee vote to reject approval, and a widely criticized launch price of $56,000 per year. The objective of this analysis was to estimate its cost-effectiveness.Methods:We developed a Markov model to compare aducanumab in addition to supportive care to supportive care alone over a lifetime horizon. Results were presented from both the health system and modified societal perspective. The model tracked the severity of disease and the care setting. Incremental cost-effectiveness ratios were calculated, and a threshold analysis was conducted to estimate at what price aducanumab would meet commonly used cost-effectiveness thresholds.Results:Using estimates of effectiveness based on pooling of data from both pivotal trials, patients treated with aducanumab spent four more months in earlier stages of AD. Over the lifetime time horizon, treating a patient with aducanumab results in 0.154 more QALYs gained per patient and 0.201 evLYGs per patient from the health care system perspective, with additional costs of approximately $204,000 per patient. The incremental outcomes were similar for the modified societal perspective. At the list price of $56,000 per year, the cost-effectiveness ranged from $1.02 million per evLYG to $1.33 million per QALY gained from the health care system perspective; and from $938,000 per evLYG to $1.27 million per QALY gained in the modified societal perspective. The annual price to meet commonly used cost-effectiveness thresholds ranged from $2,950 to $8,360, which represents a discount of 85-95% off from the annual launch price set by the manufacturer. Using estimates of effectiveness based only on the trial that suggested a benefit, the mean incremental cost was greater than $400,000 per QALY gained.Discussion:Patients treated with aducanumab received minimal improvements in health outcomes at considerable cost. This resulted in incremental cost-effectiveness ratios that far exceeded commonly used value thresholds, even under optimistic treatment effectiveness assumptions. These findings are subject to the substantial uncertainty regarding whether aducanumab provides any true net health benefit, but evidence available currently suggests that an annual price of aducanumab of $56,000 is not in reasonable alignment with its clinical benefits.

The First Interchangeable Biosimilar Insulin: Insulin Glargine-yfgn

On March 23, 2020, all insulin products were reclassified as biologics instead of drugs under the Biological Price Competition and Innovation (BPCI) Act of 2009. This allows biosimilar insulin products to be manufactured when the patent expires for the reference biologic, sometimes called the originator or brand name product. A biosimilar product may not be substituted for the reference biologic at the pharmacy counter unless the biosimilar undergoes further switch trials to earn the designation as an interchangeable biosimilar. Insulin glargine-yfgn 100 units/mL is the first biosimilar insulin to attain interchangeable status with the reference insulin glargine. In the INSTRIDE 1 and INSTRIDE 2 trials, insulin glargine-yfgn has proven noninferiority regarding blood glucose reduction and adverse effect profile versus reference insulin glargine; even in the INSTRIDE 3 trial in which treatment of diabetes was switched between insulin glargine-yfgn and reference insulin glargine throughout the trial without statistically significant changes to glucose levels or adverse effects. Insulin glargine-yfgn may be substituted at the pharmacy counter without consultation with the prescriber, in accordance with state laws. In suit with other biosimilars, insulin glargine-yfgn’s list price is significantly lower than other insulin glargine products. This increases market competition leading to decreases in costs of other insulin glargine products. Many patients who could not previously afford insulin therapy may now have significantly improved access to treatment. Providers will need education to increase awareness of these new biosimilars and interchangeable biosimilar insulin products, cost benefits, and substitution allowances.

Cost-effectiveness of bedaquiline, pretomanid and linezolid for treatment of extensively drug-resistant tuberculosis in South Africa, Georgia and the Philippines

ObjectivesPatients with highly resistant tuberculosis have few treatment options. Bedaquiline, pretomanid and linezolid regimen (BPaL) is a new regimen shown to have favourable outcomes after six months. We present an economic evaluation of introducing BPaL against the extensively drug-resistant tuberculosis (XDR-TB) standard of care in three epidemiological settings.DesignCost-effectiveness analysis using Markov cohort model.SettingSouth Africa, Georgia and the Philippines.ParticipantsXDR-TB and multidrug-resistant tuberculosis (MDR-TB) failure and treatment intolerant patients.InterventionsBPaL regimen.Primary and secondary outcome measures(1) Incremental cost per disability-adjusted life years averted by using BPaL against standard of care at the Global Drug Facility list price. (2) The potential maximum price at which the BPaL regimen could become cost neutral.ResultsBPaL for XDR-TB is likely to be cost saving in all study settings when pretomanid is priced at the Global Drug Facility list price. The magnitude of these savings depends on the prevalence of XDR-TB in the country and can amount, over 5 years, to approximately US$ 3 million in South Africa, US$ 200 000 and US$ 60 000 in Georgia and the Philippines, respectively. In South Africa, related future costs of antiretroviral treatment (ART) due to survival of more patients following treatment with BPaL reduced the magnitude of expected savings to approximately US$ 1 million. Overall, when BPaL is introduced to a wider population, including MDR-TB treatment failure and treatment intolerant, we observe increased savings and clinical benefits. The potential threshold price at which the probability of the introduction of BPaL becoming cost neutral begins to increase is higher in Georgia and the Philippines (US$ 3650 and US$ 3800, respectively) compared with South Africa (US$ 500) including ART costs.ConclusionsOur results estimate that BPaL can be a cost-saving addition to the local TB programmes in varied programmatic settings.

891. Minimum Manufacturing Costs and National Prices for Weight Loss Treatments, as Potential Mitigation for Anti-Retroviral Related Weight Gain in HIV

Background Weight gain is being observed for a wide range of antiretroviral treatments. Weight gains are higher for people taking first-line integrase inhibitor based treatments, especially those including TAF/FTC. Weight gains are higher for women and people of colour. Clinical obesity increases the risks of cardiovascular disease, diabetes, adverse birth outcomes and could lower survival rates. Anti-obesity treatments are needed to supplement lifestyle interventions and counteract progressive weight gains, but are not routinely provided as part of HIV care. Methods Costs of production for FDA-recommended weight loss treatments and anti-diabetic medications (orlistat, naltrexone-bupropion, topiramate, phentermine, semaglutide, liraglutide and metformin) were estimated using an established and published methodology based on costs of active pharmaceutical ingredients (API), extracted from the global shipping records database Panjiva. This was compared with national drug list price data from a range of low, medium, and high-income countries. Figure 1. Example of methodology for calculating the estimated minimum cost of production for orlistat Results Weight loss and anti-diabetic treatments can be generically manufactured at low per-course costs, e.g. &85 per person per year for oral treatments such as orlistat and &1 per person per month for metformin. However, prices for a year of treatment with orlistat are as high as &1,205 in the USA and as low as &11 in Vietnam. In comparison, a month of ARV treatment costs about &15 via global health institutions like CHAI. Price for injectable (subcutaneous) treatments were higher, ranging from &1,985 for liraglutide in USA to &330 in Morocco, whilst they could potentially be profitably sold for &155 for a 12-week course. No export price data was available for semaglutide. When compared against international list prices, we found wide variations between countries. Table 1. Summary of drug prices and minimum cost estimates Figure 2. Orlistat course costs in a range of countries, compared with estimated minimum cost Figure 3. Liraglutide course costs in a range of countries, compared with estimated minimum cost Conclusion We show that weight loss treatments can be manufactured and sold profitably for low prices, but have a wide price range between countries. Government and non-governmental healthcare systems should be evaluating weight loss agents for inclusion within ART programmes. Disclosures All Authors: No reported disclosures

Personalization from Customer Data Aggregation Using List Price

When consumers’ inferences of their reservation values are subject to environmental noise, firms can use customer data aggregation to obtain superior knowledge. This facilitates personalized pricing but may also induce consumer suspicions of overpaying. To alleviate the suspicions and convince consumers of their value, the firm may design its personalization scheme to include a list price in addition to the personalized prices. We find that only a separating equilibrium with list pricing survives the intuitive criterion. Specifically, when consumers underestimate their value, it is essential to use a binding list price to inform the consumers about the market’s price ceiling. Contrary to the conventional wisdom, the firm cannot abuse its informational advantage to steer consumers into overestimation, and price discrimination may strictly benefit the consumers who avoid overpaying. This paper was accepted by Dmitri Kuksov, marketing.

Acoustical Materials: Solving the Challenge of Vehicle Noise

For a limited time only, SAE is offering a 20% discount off the list price of $70. Purchase today for $56. What is acoustics? What is noise? How is sound measured? How can the vehicle noise be reduced using sound package treatments? Pranab Saha answers these and more in Acoustical Materials. Acoustics is the science of sound, including its generation, propagation, and effect. Although the propulsion sources of internal combustion engine (ICE) vehicles and electric motor-powered vehicles (EV) are different and therefore their propulsion noises are different, both types of vehicles have shared noise concerns: Tire and road noise Wind noise Vehicle noise and vibration issues have been there almost from the inception of vehicle manufacturing. The noise problem in a vehicle is very severe and is difficult to solve only by modifying the sources of noise and vibration. Sound package treatments address the noise and vibration issues along the path to reduce in-cabin noise. In Acoustical Materials, readers will grasp the science of reducing sound and vibration using sound absorbers, sound barriers, and vibration dampers. Sound provides information on the proper operation of the vehicle, but if unchecked, can detract from the consumer experience within the vehicle and create noise pollution outside the vehicle. Acoustical Materials provides essential information on the basics of sound, vehicle noise source, how these are measured, how vehicle owners perceive sound, and ultimately, how to solve noise problems in vehicles using sound package materials.

An analytical model of the replacement costs of aircraft engine life-limited parts

Purpose The purpose of this paper is to present novel recursive expressions for modelling the replacement costs of aircraft engine life-limited parts during shop visits to assist engine operators in both evaluating their decisions regarding the applied life-limited parts management strategies and tracking the replacement costs consistently throughout the life of the engine. Design/methodology/approach The replacement costs of aircraft engine life-limited parts are modelled analytically in this research, which strives to quantify the costs of used and unused lives of the replaced parts, incurred during engine shop visit events. Inputs for this model include the list price of life-limited parts, the replacement decisions made on all previous shop visits and the number of cycles the engine has operated at different thrust ratings on all previous operating intervals. Findings The average annual escalation rate of life-limited parts list prices was shown to range from 5% to 7%. The presented model is not only suitable for calculating the costs of used and unused lives of life-limited parts during past engine shop visit events but also for application in the life-limited parts replacement cost forecasting and optimisation models. Originality/value Uniquely derived recursive expressions represent the final result of the developed model which, to the authors’ knowledge, had not been studied elsewhere in the academic literature. The analysis of aircraft engine life-limited part list prices carried out to account for the average annual escalation rate enables the prediction of replacement costs during subsequent shop visits.

The Cost-Effectiveness of Expanding Vaccination with a Cell-Based Influenza Vaccine to Low Risk Adults Aged 50 to 64 Years in the United Kingdom

Background: In response to COVID-19, the UK National Health Service (NHS) extended influenza vaccination in 50- to 64-year-olds from at-risk only to all in this age group for the 2020/21 season. The objective of this research is to determine the cost-effectiveness of continuing to vaccinate all with a quadrivalent cell-based vaccine (QIVc) compared to returning to an at-risk only policy after the pandemic resolves. Methods: A dynamic transmission model, calibrated to match infection data from the UK, was used to estimate the clinical and economic impact of vaccination across 10 influenza seasons. The base case effectiveness of QIVc was 63.9% and the list price was GBP 9.94. Results: Vaccinating 50% of all 50- to 64-year-olds with QIVc reduced the average annual number of clinical infections (−682,000), hospitalizations (−5800) and deaths (−740) in the UK. The base case incremental cost per quality-adjusted life-year gained (ICER) of all compared to at-risk only was GBP6000 (NHS perspective). When the cost of lost productivity was considered, vaccinating all 50- to 64-year-olds with QIVc became cost-saving. Conclusion: Vaccinating all 50- to 64-year-olds with QIVc is likely to be cost-effective. The NHS should consider continuing this policy in future seasons.

Impact of surgeon rhBMP-2 cost awareness on complication rates and health system costs for spinal arthrodesis

OBJECTIVE Recombinant human bone morphogenetic protein–2 (rhBMP-2) is used in spinal arthrodesis procedures to enhance bony fusion. Research has suggested that it is the most cost-effective fusion enhancer, but there are significant upfront costs for the healthcare system. The primary objective of this study was to determine whether intraoperative dosing and corresponding costs changed with surgeon cost awareness. The secondary objective was to describe surgical complications before and after surgeon awareness of rhBMP-2 cost. METHODS A retrospective medical record review was conducted to identify patients who underwent spinal arthrodesis procedures performed by a single surgeon, supplemented with rhBMP-2, from June 2016 to June 2018. Collected data included rhBMP-2 dosage, rhBMP-2 list price, and surgical complications. Expected Medicare reimbursement was calculated. Data were analyzed before and after surgeon awareness of rhBMP-2 cost. RESULTS Forty-eight procedures were performed using rhBMP-2, 16 before and 32 after surgeon cost awareness. Prior to cost awareness, the most frequent rhBMP-2 dosage level was x-small (38.9%, n = 7), followed by large (27.8%, n = 5) and small (22.2%, n = 4). After cost awareness, the most frequent rhBMP-2 dosage was xx-small (56.8%, n = 21), followed by x-small (21.6%, n = 8) and large (13.5%, n = 5). The rhBMP-2 average cost per surgery was $4116.56 prior to surgeon cost awareness versus $2268.38 after. Two complications were observed in the pre—cost awareness surgical group; 2 complications were observed in the post—cost awareness surgical group. CONCLUSIONS Surgeon awareness of rhBMP-2 cost resulted in use of smaller rhBMP-2 doses, decreased rhBMP-2 cost per surgery, and decreased overall hospital admission charges, without a detectable increase in surgical complications.