The application of pharmacoeconomic modelling to estimate a value-based price for new cancer drugs

Abstract

Rationale, aims and objectives Value‐based pricing has recently been discussed by international bodies as a means to estimate a drug price that is linked to the benefits it offers patients and society. The World Health Organization (WHO) has recommended using three times a country's per capita gross domestic product (GDP) as the threshold for economic value. Using the WHO criteria, pharmacoeconomic modelling was used to illustrate the application of value‐based price towards bevacizumab, a relatively new drug that provides a 1.4‐month survival benefit to patients with metastatic colorectal cancer (mCRC). Methods A decision model was developed to simulate outcomes in mCRC patients receiving chemotherapy ± bevacizumab. Clinical data were obtained from randomized trials and costs from Canadian cancer centres. Utility estimates were determined by interviewing 24 oncology nurses and pharmacists. A price per dose of bevacizumab was then estimated using a target threshold of $CAD117 000 per quality adjusted life year gained, which is three times the Canadian per capita GDP. Results For a 1.4‐month survival benefit, a price of $CAD830 per dose would be considered cost‐effective from the Canadian public health care perspective. If the drug were able to improve patient quality of life or survival from 1.4 to 3 months, the drug price could increase to $CAD1560 and $CAD2180 and still be considered cost‐effective. Discussion The use of the WHO criteria for estimating a value‐based price is feasible, but a balance between what patients/governments can afford to pay and the commercial viability of the product in the reference country would be required