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Evaluating the administration costs of biologic drugs: development of a cost algorithm.

ABSTRACT: Biologic drugs, as with all other medical technologies, are subject to a number of regulatory, marketing, reimbursement (financing) and other demand-restricting hurdles applied by healthcare payers. One example is the routine use of cost-effectiveness analyses or health technology assessments to determine which medical technologies offer value-for-money. The manner in which these assessments are conducted suggests that, holding all else equal, the economic value of biologic drugs may be determined by how much is spent on administering these drugs or trade-offs between drug acquisition and administration costs. Yet, on the supply-side, it seems very little attention is given to how manufacturing and formulation choices affect healthcare delivery costs. This paper evaluates variations in the administration costs of biologic drugs, taking care to ensure consistent inclusion of all relevant cost resources. From this, it develops a regression-based algorithm with which manufacturers could possibly predict, during process development, how their manufacturing and formulation choices may impact on the healthcare delivery costs of their products.

SUBMITTER: Tetteh EK

PROVIDER: S-EPMC4883988 | biostudies-literature | 2014 Dec

REPOSITORIES: biostudies-literature

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Evaluating the administration costs of biologic drugs: development of a cost algorithm.

Tetteh Ebenezer K EK Morris Stephen S

Health economics review 20141023 1

Biologic drugs, as with all other medical technologies, are subject to a number of regulatory, marketing, reimbursement (financing) and other demand-restricting hurdles applied by healthcare payers. One example is the routine use of cost-effectiveness analyses or health technology assessments to determine which medical technologies offer value-for-money. The manner in which these assessments are conducted suggests that, holding all else equal, the economic value of biologic drugs may be determin ...[more]

PMID: 26208926

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Project description:ImportanceBiologic drugs account for a growing share of US pharmaceutical spending. Competition from follow-on biosimilar products (subsequent versions that have no clinically meaningful differences from the original biologic) has led to modest reductions in US health care spending, but these savings may not translate to lower out-of-pocket (OOP) costs for patients.ObjectiveTo investigate whether biosimilar competition is associated with lower OOP spending for patients using biologics.Design, setting, and participantsThis cohort study used a national commercial claims database (Optum Clinformatics Data Mart) to identify outpatient claims for 1 of 7 clinician-administered biologics (filgrastim, infliximab, pegfilgrastim, epoetin alfa, bevacizumab, rituximab, and trastuzumab) from January 2009 through March 2022. Claims by commercially insured patients younger than 65 years were included.ExposureYear relative to first biosimilar availability and use of original or biosimilar version.Main outcomes and measuresPatients' annual OOP spending on biologics for each calendar year was determined, and OOP spending per claim between reference biologic and biosimilar versions was compared. Two-part regression models assessed for differences in OOP spending, adjusting for patient and clinical characteristics (age, sex, US Census region, health plan type, diagnosis, and place of service) and year relative to initial biosimilar entry.ResultsOver 1.7 million claims from 190 364 individuals (median [IQR] age, 53 [42-59] years; 58.3% females) who used at least 1 of the 7 biologics between 2009 and 2022 were included in the analysis. Over 251 566 patient-years of observation, annual OOP costs increased before and after biosimilar availability. Two years after the start of biosimilar competition, the adjusted odds ratio of nonzero annual OOP spending was 1.08 (95% CI, 1.04-1.12; P < .001) and average nonzero annual spending was 12% higher (95% CI, 10%-14%; P < .001) compared with the year before biosimilar competition. After biosimilars became available, claims for biosimilars were more likely than reference biologics to have nonzero OOP costs (adjusted odds ratio, 1.13 [95% CI, 1.11-1.16]; P < .001) but had 8% lower mean nonzero OOP costs (adjusted mean ratio, 0.92 [95% CI, 0.90-0.93; P < .001). Findings varied by drug.Conclusions and relevanceFindings of this cohort study suggest that biosimilar competition was not consistently associated with lower OOP costs for commercially insured outpatients, highlighting the need for targeted policy interventions to ensure that the savings generated from biosimilar competition translate into increased affordability for patients who need biologics.

Project description:Background: Specialty infusion and self-injectable biologic drugs for the treatment of inflammatory bowel disease (IBD) are high-cost medications. When administered to hospital-admitted patients, these medications are not reimbursed on an individual basis but rolled into a per diem payment by most payers in the United States (US). Therefore, choosing to administer these medications in the inpatient setting may reveal negative financial implications for some health care institutions. Selecting an alternative site of care to administer these medications during the clinical management process may lead to cost savings. Objective: Review the clinical necessity of inpatient specialty biologic administrations for the treatment of IBD to identify and quantify potential cost saving opportunities. Methods: Using patient medical records at a US academic medical center, we retrospectively identified inpatient administrations of specialty infusion and self-injectable biologic medications for IBD treatment from June 1, 2016 to May 31, 2017. Guided by a standardized form, an evaluation team consisting of 3 of the investigators determined the clinical necessity of each specialty biologic medication administration within the inpatient setting. Costs and reimbursement rates for administration in both the inpatient and outpatient settings were procured and tabulated. Results: Seventeen inpatient specialty biologic administrations for IBD during the 12 month study period were identified. Of these, 11 administrations were given for the treatment of Crohn's disease (CD) and 6 for ulcerative colitis (UC). The evaluation team determined that 65% of these administrations were clinically necessary as inpatient administrations, and that 35% were not. The sum of the wholesale acquisition costs (WAC) for clinically necessary inpatient biologic administrations totaled $54 737, and the WAC for those administrations deemed not clinically necessary totaled $43 702. Further analysis of administration events revealed that the institution could have realized an estimated $13 817 in additional revenue above the cost of the drug if eligible inpatient biologic administrations had been received in the institution's outpatient clinic setting instead. Conclusion: Administering specialty biologic drugs for the treatment of IBD in the care setting best aligned with existing reimbursement structures may lead to institutional cost savings.

Project description:IntroductionIn 2016, for the very first time, the Ministry of Health in Zambia implemented a reactive outbreak response to control the spread of cholera and vaccinated at-risk populations with a single dose of Shancol-an oral cholera vaccine (OCV). This study aimed to assess the costs of cholera illness and determine the cost-effectiveness of the 2016 vaccination campaign.MethodologyFrom April to June 2017, we conducted a retrospective cost and cost-effectiveness analysis in three peri-urban areas of Lusaka. To estimate costs of illness from a household perspective, a systematic random sample of 189 in-patients confirmed with V. cholera were identified from Cholera Treatment Centre registers and interviewed for out-of-pocket costs. Vaccine delivery and health systems costs were extracted from financial records at the District Health Office and health facilities. The cost of cholera treatment was derived by multiplying the subsidized cost of drugs by the quantity administered to patients during hospitalisation. The cost-effectiveness analysis measured incremental cost-effectiveness ratio-cost per case averted, cost per life saved and cost per DALY averted-for a single dose OCV.ResultsThe mean cost per administered vaccine was US$1.72. Treatment costs per hospitalized episode were US$14.49-US$18.03 for patients ≤15 years old and US$17.66-US$35.16 for older patients. Whereas households incurred costs on non-medical items such as communication, beverages, food and transport during illness, a large proportion of medical costs were borne by the health system. Assuming vaccine effectiveness of 88.9% and 63%, a life expectancy of 62 years and Gross Domestic Product (GDP) per capita of US$1,500, the costs per case averted were estimated US$369-US$532. Costs per life year saved ranged from US$18,515-US$27,976. The total cost per DALY averted was estimated between US$698-US$1,006 for patients ≤15 years old and US$666-US$1,000 for older patients.ConclusionOur study determined that reactive vaccination campaign with a single dose of Shancol for cholera control in densely populated areas of Lusaka was cost-effective.

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Evaluating the administration costs of biologic drugs: development of a cost algorithm.

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Evaluating the administration costs of biologic drugs: development of a cost algorithm.

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