The impact of early phase price agreements on prices of orphan drugs

BMC Health Services Research

Mark Nuijten¹  Philippe Van Wilder² 

[1] A2M, Amsterdam, The Netherlands;Ecole de Santé Publique, Université Libre de Bruxelles, Bruxelles, Belgium;

关键词: Drug price;    Cost-effectiveness;    Budget impact;    Economic valuation;   

DOI  :  10.1186/s12913-021-06208-7

来源: Springer

【 摘 要 】

BackgroundInnovative orphan drugs often have an incremental cost-effectiveness ratio (ICER) which is higher than the maximum threshold for reimbursement. Payers have limited budgets and often cannot pay the full price of a new product, but pharmaceutical and biotechnology companies require a minimum price to satisfy their investors. The objective of this study was to present a possible solution to bridge this pricing gap by having early phase price agreements, which reduce the risk for investors.MethodsWe used a Pricing Model, which determines the minimum (break-even) price of an innovative drug from an investor’s perspective. This model is based on economic valuation theory, which uses the expected free cash flows and the required cost of capital. We selected two orphan drugs with a positive clinical assessment and an ICER higsher than the Dutch maximum threshold of €80,000 per QALY gained to use as examples in the model: Spinraza for spinal muscular atrophy and Orkambi for cystic fibrosis.RESULTS: The results show that early pricing agreements before phase III trials can substantially lower the drug price resulting from a lower cost of capital. The minimum price for orphan drugs can be reduced by 27.4%, when cost of capital decreases from 12 to 9%. An additional adjustment of other critical parameters due to early pricing agreements (lower probabilities of phase III failure and lower research and development (R&D) costs) can further reduce the minimal price by 62.8%.ConclusionThis study shows that earlier timing of price negotiations resulting in an agreement on drug price can substantially lower the minimal price of orphan drugs for the investor.

【 授权许可】

CC BY