Added Therapeutic Benefit of Top-Selling Brand-name Drugs in Medicare

Abstract

ImportanceThe Inflation Reduction Act of 2022 authorizes Medicare to negotiate prices of top-selling drugs based on several factors, including therapeutic benefit compared with existing treatment options.ObjectiveTo determine the added therapeutic benefit of the 50 top-selling brand-name drugs in Medicare in 2020, as assessed by health technology assessment (HTA) organizations in Canada, France, and Germany.Design, Setting, and ParticipantsIn this cross-sectional study, publicly available therapeutic benefit ratings, US Food and Drug Administration documents, and the Medicare Part B and Part D prescription drug spending dashboards were used to determine the 50 top-selling single-source drugs used in Medicare in 2020 and to assess their added therapeutic benefit ratings through 2021.Main Outcomes and MeasuresRatings from HTA bodies in Canada, France, and Germany were categorized as high (moderate or greater) or low (minor or no) added benefit. Each drug was rated based on its most favorable rating across countries, indications, subpopulations, and dosage forms. We compared the use and prerebate and postrebate (ie, net) Medicare spending between drugs with high vs low added benefit.ResultsForty-nine drugs (98%) received an HTA rating by at least 1 country; 22 of 36 drugs (61%) received a low added benefit rating in Canada, 34 of 47 in France (72%), and 17 of 29 in Germany (59%). Across countries, 27 drugs (55%) had a low added therapeutic rating, accounting for $19.3 billion in annual estimated net spending, or 35% of Medicare net spending on the 50 top-selling single-source drugs and 11% of total Medicare net prescription drug spending in 2020. Compared with those with high added benefit, drugs with a low added therapeutic rating were used by more Medicare beneficiaries (median 387 149 vs 44 869) and had lower net spending per beneficiary (median $992 vs $32 287).Conclusions and RelevanceMany top-selling Medicare drugs received low added benefit ratings by the national HTA organizations of Canada, France, and Germany. When negotiating prices for these drugs, Medicare should ensure they are not priced higher than reasonable therapeutic alternatives.

Gauging the Value of Top-Selling Drugs in Medicare—Reply

“…In Reply In our recent article, we found that a majority of Medicare’s top-selling drugs received low added therapeutic benefit ratings by health technology assessment (HTA) organizations in France, Germany, and Canada. Dr Daifotis contends that these assessments are irrelevant to Medicare beneficiaries because they may be based on different “societal judgments and budgetary needs.” This misconstrues an essential part of our analysis: we relied on therapeutic benefit ratings based only on clinical and comparative effectiveness data drawn from the medical literature among other sources, independent of price or budgetary constraints.…”

Strategies to Promote High-Value, Evidence-Based Pharmaceuticals

“…This poor return on our health care investment is related to too much (inappropriate) care and very high prices unrelated to therapeutic benefit. For example, the majority of the top-selling pharmaceuticals in Medicare ($19.3 billion) have a low therapeutic benefit compared with alternatives …”

Gauging the Value of Top-Selling Drugs in Medicare

“…To the Editor A recent article entitled “Added Therapeutic Benefit of Top-Selling Brand-name Drugs in Medicare” relied on a flawed analysis that imported categorical value judgments from other countries to bolster government price-setting policies included in the Inflation Reduction Act.…”

“…The study authors presented no medical evidence for their conclusions that many treatments “provided low added benefits” to Medicare beneficiaries. The cited foreign health care administrators’ evaluations were also frequently inconsistent, as noted in the article’s supplemental eTable …”