US-Based Drug Cost Parameter Estimation for Economic Evaluations.
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Issue Date
2015-07
Authors
Levy, Joseph F
Meek, Patrick D
Rosenberg, Marjorie A
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Abstract
Introduction: In the United States, more than 10% of national health expenditures are for prescription drugs. Assessing drug costs in US economic evaluation studies is not consistent, as the true acquisition cost of a drug is not known by decision modelers. Current US practice focuses on identifying one reasonable drug cost and imposing some distributional assumption to assess uncertainty.
Methods: We propose a set of Rules based on current pharmacy practice that account for the heterogeneity of drug product costs. The set of products derived from our Rules, and their associated costs, form an empirical distribution that can be used for more realistic sensitivity analyses and create transparency in drug cost parameter computation. The Rules specify an algorithmic process to select clinically equivalent drug products that reduce pill burden, use an appropriate package size, and assume uniform weighting of substitutable products. Three diverse examples show derived empirical distributions and are compared with previously reported cost estimates.
Results: The shapes of the empirical distributions among the 3 drugs differ dramatically, including multiple modes and different variation. Previously published estimates differed from the means of the empirical distributions. Published ranges for sensitivity analyses did not cover the ranges of the empirical distributions. In one example using lisinopril, the empirical mean cost of substitutable products was $444 (range = $23-$953) as compared with a published estimate of $305 (range = $51-$523).
Conclusions: Our Rules create a simple and transparent approach to creating cost estimates of drug products and assessing their variability. The approach is easily modified to include a subset of, or different weighting for, substitutable products. The derived empirical distribution is easily incorporated into 1-way or probabilistic sensitivity analyses.
Citation
Levy JF, Meek PD, Rosenberg MA. US-Based Drug Cost Parameter Estimation for Economic Evaluations. Med Decis Making. 2015 Jul;35(5):622-32. doi: 10.1177/0272989X14563987. Epub 2014 Dec 22. PMID: 25532826; PMCID: PMC4472562.
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UL1 TR000427/TR/NCATS NIH HHS/United States , T32 MH018029/MH/NIMH NIH HHS/United States , UL1 RR025011/RR/NCRR NIH HHS/United States , 1UL1RR025011/RR/NCRR NIH HHS/United States