Typically, cost effectiveness analysis considers a constant price between drug approval and loss of specificity. This is not clear, however, to what extent this notion is valid, especially after taking into account the drug price discount and discount.
A paper by Lin et al. (2024) To answer this question, SSR uses 2007-2023 data on medication prices from Health. SSR health net value data includes the manufacturer exemption, coupons and adjustments for discounts, and the author then also adjust all prices for inflation. Authors use data in 44 drugs, including drugs which are evaluated as part of the year 1 drug price interaction and additional medicines are likely to evaluate in the next 3 years. Two statistical approaches were used:
- A simple least square to measure average annual value changes (which uses phase function to identify predictions),
- A mixed-effect regression model (which used a drag function to identify predictions) to predict the natural log of value at each time after the launch of a drug.
Prophets include: FDA approval calendar year, small molecules (vs. biologic), number of signals, medicare protected class status, if the drug was a ‘combined’ drug with many active ingredients, was the drug approved through quick approval, and if there was an oncology sign on the drug.
Based on a descriptive analysis completely, the author finds that:
The average average change in drugs was an annual reduction of 4.7%, while
The average change rate was an annual reduction of 2.4%. The 25th percentage was an annual reduction of 8.1%, while the 75th percentage was 0.1%annual decrease. Out of 32 drugs in our sample, annual value changes for 25 (78%) were negative,
Suggesting that after adjusting to inflation in most drugs, pure prices were low at the end of the seen period. The average annual price change ranged from a reduction of 23.8% to a profit of 9.5%.
Including the characteristics of the drug, the price reduction was even larger for a reference case that excludes the medicines medicines protected class drugs.
The OLS Winsorized model reduced the average annual value of 6.1% (95% CI 3.4% -8.8%; P <.001). The annual price changes for approved drugs from 2014 to 2018 were 3.0% less than the approved drugs from 2007 to 2013 (95% CI 26.4% to 10.3%; P = .08). The annual price increase for medicore-reserved drugs was 8.1% higher than non-medical-protected drugs (95% CI 4.6% -11.5%; P <.001).
You can read the entire paper here.
