Incorporating Dynamic Pricing in Cost-Effectiveness Analysis: Are Known Unknowns Valuable?

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Health Technology Assessment

Background:

• Current health technology assessments (HTAs) for pharmaceuticals typically use static pricing for cost-effectiveness analyses (CEAs).
• Recent research suggests that dynamic pricing models may offer a more realistic approach to CEAs.
• This study investigates the feasibility and impact of incorporating dynamic pricing into pharmaceutical HTA.

Purpose of the Study:

• To compare the standard static pricing approach with dynamic pricing scenarios in US-based HTA evaluations.
• To assess the impact of dynamic pricing on incremental cost-effectiveness ratios (ICERs) per quality-adjusted life-year (QALY).
• To evaluate changes in decision uncertainty and cost-effectiveness conclusions.

Main Methods:

• Replicated US-based HTA evaluations for four pharmaceuticals: omalizumab, elagolix, ocrelizumab, and dupilumab.
• Compared static pricing base-case ICERs with four dynamic pricing scenarios.
• Analyzed the relative percentage change and absolute difference in ICERs, and assessed decision uncertainty.

Main Results:

• Base-case ICERs varied significantly across the four case examples.
• Dynamic pricing scenarios resulted in ICER variations from -56% to +232% compared to the base-case.
• Cost-effectiveness conclusions were altered in 2 out of 16 scenarios evaluated.

Conclusions:

• Dynamic pricing significantly influences pharmaceutical cost-effectiveness.
• Findings underscore the need for further research into price trajectories and dynamic HTA models.
• US payers should consider dynamic pricing and lifecycle assessments for pharmaceutical evaluations.