Saturday, April 20, 2024

New Era in Drug Pricing: Inflation Reduction Act to Affect High-Cost Drugs

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The Inflation Reduction Act (IRA) marks a significant shift in drug pricing, with the Centers for Medicare & Medicaid Services (CMS) in the U.S. poised to negotiate prices for certain high-cost drugs. This includes direct-acting oral anticoagulants (DOACs) apixaban (Eliquis) and rivaroxaban (Xarelto), which were among the first 10 drugs chosen for negotiation.

The Institute for Clinical and Economic Review (ICER) has published a Special Report examining these two drugs, which are primarily used for non-valvular atrial fibrillation (NVAF). They were compared to warfarin, the older standard therapy, and dabigatran, the first DOAC available as a generic medication. Patient experiences, clinical effectiveness, and cost comparisons were all considered in the study.

The study concluded that DOACs improve outcomes for NVAF patients compared to warfarin. Both apixaban and rivaroxaban demonstrated small net benefits when compared to warfarin. However, the benefits were comparable or minimal when these drugs were compared to dabigatran.

To help inform drug price discussions, price premiums at different cost-effectiveness thresholds for apixaban and rivaroxaban relative to warfarin and dabigatran have been calculated. For example, the annual price premium for apixaban relative to warfarin ranges from $1,260 at a threshold of $50,000/evLYG to $4,350 at $200,000/evLYG. On the other hand, rivaroxaban did not offer health gains compared to dabigatran, meaning it does not support a price premium above the CMS pricing for dabigatran.

This information lays the groundwork for CMS and other stakeholders to make informed decisions about the value and pricing of these critical drugs. The IRA’s initiation signifies a new era in drug pricing, with the CMS in the U.S. now in a position to negotiate prices for certain high-cost drugs.

The study provides essential insights for stakeholders in the drug pricing ecosystem, including CMS, to make informed decisions regarding the value and pricing of these vital drugs. This is particularly relevant in the context of the Inflation Reduction Act, which marks a new era in drug pricing.

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