The Challenge of Variable Costs in Decisions Based on Cost-Effectiveness Evidence: A Case Study for Brodalumab

Background: Payers often consider cost-effectiveness studies for new drugs when making decisions on coverage, formulary position, and budgets; however, cost-effectiveness studies are often calculated using estimated pricing before a drug''s launch. If the drug''s price changes on or after launch, or if rebate programs are initiated, cost-effectiveness studies need to be updated to prevent payers from making decisions using inaccurate value assumptions, which can lead to unexpected financial impacts and potentially delay patient access to drugs.

Objective: To evaluate how lower at-launch drug pricing versus initial estimated pricing affects cost-effectiveness ratios and potentially influences treatment decisions, using the case study of brodalumab, a biologic drug indicated for the treatment of moderate-to-severe plaque psoriasis.

Methods: We compared the estimated cost-effectiveness of brodalumab, which was published in a December 2016 Institute for Clinical and Economic Review (ICER) report based on estimated pricing, with the drug''s cost-effectiveness based on its actual pricing after its approval.

Discussion: The 2016 ICER report on the cost-effectiveness of targeted immunomodulators indicated for the treatment of moderate-to-severe plaque psoriasis, brodalumab''s price was estimated to be $4267 by averaging the cost of its likely competitors. Brodalumab''s effectiveness as a treatment for moderate-to-severe plaque psoriasis is high in clinical trials, but its estimated cost placed it as the fourth most cost-effective targeted immunomodulatory drug in the ICER report. On its approval in February 2017, brodalumab''s newly estimated base price was $3900, based on its prelaunch price. Calculations using this base price placed brodalumab as the most cost-effective option among targeted immunomodulators in this setting. At the time this current article was written, brodalumab''s cost was $3500, making it even more cost-effective.

Conclusion: Because payers, providers, and patients are all concerned with achieving better outcomes for the often painful and disfiguring disease of plaque psoriasis, while controlling costs, updating cost-effectiveness data when new pricing information becomes available may reveal significant cost differences to help stakeholders make better decisions about their population''s healthcare outcomes and costs.