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Only three of 13 biologics used to treat psoriasis were found cost-effective in the US market, according to a new analysis that used an approach to weighing pharmaceutical prices and benefits already employed in Germany.

In a paper published on February 21 in JAMA Dermatology, Alexander C. Egilman, BA, Benjamin N. Rome, MD, MPH, and coauthors used an approach called efficiency frontiers (EFs) to analyze biologic therapies for psoriasis. The authors are affiliated with the Program On Regulation, Therapeutics, And Law (PORTAL) in the Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women's Hospital, Boston, Massachusetts.

Their paper and an accompanying editorial suggest this method could be used as a possible tool for policymakers in the United States who have struggled to find ways to tie prices paid for medicines to their documented benefits. The 13 biologics included two biosimilars, and EFs were based on the efficacy of the biologic, using Psoriasis Area and Severity Index (PASI) 90 response rates and annual treatment costs as of January 2023.

The analysis using the EF approach found favorable cost-benefit balances for the following: Infliximab-dyyb (a biosimilar) with a PASI 90 score of 57.4% and annual cost estimated at $1664; ixekizumab (Taltz) with a PASI 90 score of 70.8% and annual cost estimated at $33,004; and risankizumab (Skyrizi) with PASI 90 score of 71.6% and annual cost estimated at $79,277.

This suggests prices of the other drugs would need to be lowered by a median of 71% to align with prices for the most cost-effective therapeutic alternatives, Rome and coauthors wrote. The authors wrote that the study had limitations, including not accounting for differences in administration costs, and the fact that most of the biologics in the study are approved for multiple indications, and their benefits in treating other conditions "would be expected to contribute to their price."

The EF approach is a way that policymakers could look to reward innovation, Rome told Medscape Medical News.

In standard practice, the EF approach places no price restraint on the most effective drugs in a class of medicines. There could be some potential to tweak that approach where a second most effective drug is sold at a substantial discount to the most effective.

But even so, the emphasis would remain on paying more for drugs that deliver more benefit, which is the goal of using the EF approach, according to the authors of the paper.

"By doing that you actually promote the innovation that we actually want, which is for companies to seek drugs that actually help patients more than existing drugs that are already out there," Rome told Medscape Medical News.

This approach cannot be applied universally due to a lack of robust competition in some drug classes. But in the field of psoriasis, there's been remarkable progress in recent years, making it a good test case for this approach.

The Food and Drug Administration (FDA) first approved etanercept (Enbrel) in 1998 for rheumatoid arthritis and for plaque psoriasis in 2004. In the analysis from Rome and coauthors, etanercept had the lowest response rate of the three drugs analyzed with a PASI 90 of 17.9%.

In contrast, the PASI 90 scores reached 71.6% for risankizumab, which the FDA approved in 2019.

Scott Elman, MD, a dermatologist at the University of Miami, Miami, Florida, told Medscape Medical News that the paper from Rome and colleagues was a "breath of fresh air."

"When I first saw this paper, I said it's about time" for an analysis seeking to peg payments for psoriasis drugs to cost, said Elman, who was not involved with the research or publication.

There have been notable and welcome advances in psoriasis drugs in recent years, but dermatologists too often see that their patients struggle to get access to these costly treatments, Elman said.

"We used to think about PASI 75, or 75% improvement in the PASI score. That used to be the benchmark and that's what we were excited about with some of the earlier medications to treat psoriasis," Elman said. "It's been exciting to see that benchmark really has moved towards PASI 90."

But dermatologists may have to consider what medications their patients have access to and adjust treatments accordingly.

"For a lot of commercially insured patients, it might not be a second thought, but especially for our Medicaid populations and our Medicare populations, where they might have substantial cost sharing of these medicines, it really does factor in," Elman said.

'Baby Steps'

The analysis from Rome and coauthors comes amid intensifying debate about how US policymakers, particularly those in the federal government, should try to weigh the costs and benefits of medicines.

Many other countries, including Australia, Canada, France, and Germany, already systematically evaluate the efficacy and safety of new medications and then negotiate prices based on a drug's added clinical benefits compared with existing therapeutic alternatives, Rome and coauthors wrote.

US government agencies have been much more reluctant to do this. Congress initially outsourced to private insurers the role of negotiating for medicines covered in Part D pharmacy plans. For drugs covered by Part B, the approach has long been to add a premium to prices reported by pharmaceutical companies.

The Inflation Reduction Act of 2022 set the stage for Medicare to begin negotiations on certain high-cost drugs. Work is underway for negotiated prices for a first set of 10 drugs, for which lower prices are expected to become effective in 2026.

"We're making progress in the US, but it feels like baby steps at times," Andrew Mulcahy, PhD, senior health economist at the RAND Corporation, told Medscape Medical News.

Rome and coauthors cited Mulcahy's research on ​​international prescription drug price comparisons in their paper. Mulcahy said it was helpful to see Rome and coauthors exploring the concept of EFs for cost-benefit analyses of medicines, as another approach used in other countries has been largely derailed for the US government.

For many years, much of the debate in the United States bogged down on the issue of an approach known as quality-adjusted life-years (QALYs), a measure of how well a treatment lengthens and improves patients' quality of life.

"So thinking about alternate ways to frame this is really important to move our policy around drug prices forward," Mulcahy said.

Critics of QALYs have persuaded Congress to limit use of this approach, barring it in Medicare. UK-based researchers Edward C.F. Wilson, PhD, of the University of Exeter Medical School, Exeter, and Zenas Z.N. Yiu, PhD, of the University of Manchester, Manchester, England, questioned that decision in an editorial that accompanied the paper from Rome and coauthors.

"These concerns were somewhat misguided and the decision bizarre, given that it is hard to argue that the prime objective of healthcare is anything other than to improve length and/or quality of life, and the QALY is simply a measure of that," Wilson and Yiu wrote in JAMA Dermatology.

There's debate in Congress about further restrictions on QALYs. House Energy and Commerce Chair Cathy McMorris Rodgers (R-WA) is seeking, through a bill (H.R. 485), to broaden the ban on use of QALYs to all federal health programs.

"QALYs, and other similar discriminatory measures, assign a dollar value on the life of a patient to decide if a certain treatment is cost-effective, oftentimes discounting an individual's worth and the need for care solely because of their disability or chronic illness," Rodgers said during debate on the House floor on February 7.

The House that day passed her bill, 211-208. All the supporting votes came from Republicans, while the opposing ones came from Democrats.

In response to Rodgers, Rep. Frank Pallone Jr, of New Jersey, the ranking Democrat on the House Energy and Commerce Committee, said he also supports restrictions on QALYs. But he said he objected to the bill because it's a "Trojan horse" intended to derail efforts to lower drug prices.

"H.R. 485 goes further than current law and opens a back door that will be used to bar the use of any value measures by the federal government," Pallone said during debate on the House floor.

"I am not suggesting that that is what the Republicans have in mind necessarily, but that is the reality of it," Pallone said.

The pharmaceutical industry would use the broader restriction to "undermine every effort the Democrats have made to try to bring down costs for prescription drugs in the Medicare market, in the Medicaid market, in Veterans Affairs, and on down the list," he said.

This analysis from Rome and coauthors was supported by grants from the Elevance Health Public Policy Institute and Arnold Ventures. Author Aaron Kesselheim reported serving as an expert witness on behalf of a class of individual plaintiffs against Gilead related to approval of its tenofovir-containing drugs, for a group of state attorneys general and private payers related to generic drug prices, and in two cases in 2023 for the Federal Trade Commission related to pharmaceutical industry acquisitions (both now settled). No other disclosures were reported.

Kerry Dooley Young is a freelance journalist based in Washington, DC.