DEVELOPMENT OF A SEQUENTIAL PRICE ADJUSTMENT METHOD BASED ON THE EFFICIENCY FRONTIER AND EVALUATION OF HEALTH ECONOMIC BENEFITS...
Author(s)
Kensuke Moriwaki, BS, MS, PhD1, Kosuke MORIMOTO, PhD2, Ryutaro Sakai, MS3, INOUE MAHO, MS4.
1Associate Professor, Ritsumeikan University, Kyoto, Japan, 2Ritsumeikan University, Kyoto-shi, Japan, 3Ritsumeikan University, Kusatsu, Japan, 4Ritsumeikan University, Kusatsu-shi, Japan.
1Associate Professor, Ritsumeikan University, Kyoto, Japan, 2Ritsumeikan University, Kyoto-shi, Japan, 3Ritsumeikan University, Kusatsu, Japan, 4Ritsumeikan University, Kusatsu-shi, Japan.
OBJECTIVES: Japan's cost-effectiveness evaluation system adjusts drug prices based on ICERs, but does not ensure that the comparator lies on the efficiency frontier curve (EFC). Use of a suboptimal comparator may underestimate the evaluated technology's ICER, distorting price adjustments. This study developed a novel EFC-based sequential price adjustment method and quantified its health economic benefits across three advanced cancer types.
METHODS: Cost-effectiveness analyses were conducted for first-line pharmacotherapies in advanced NSCLC, pancreatic cancer, and gastric cancer from a Japanese public payer perspective using partitioned survival analysis models, with indirect comparisons where head-to-head trials were unavailable. Technologies were classified as EFC-constituting, extended-dominated, or strictly dominated. The sequential method applied a 15% price reduction to dominated technologies and graduated reductions (0-15%) to EFC-constituting technologies based on sequentially recalculated ICERs, with a feedback loop ensuring upstream adjustments informed downstream calculations. Health economic benefits were assessed via net health benefit (NHB) and net monetary benefit (NMB) at WTP thresholds of ¥7.5M, ¥11.25M, and ¥15M/QALY.
RESULTS: Four technologies constituted the EFC in each cancer type (NSCLC: 6 total; pancreatic: 8; gastric: 11). All NSCLC technologies had ICERs far exceeding ¥15M/QALY; a uniform 15% reduction improved mean NHB by +0.388 QALY (WTP ¥15M) and total NMB by ¥34.9M. In pancreatic cancer, NMB improvement was modest (+¥1.2M), reflecting lower drug costs. In gastric cancer, mean NHB turned positive at WTP ¥11.25M/QALY (Δ+0.094 QALY) and total NMB improved by ¥11.7M.
CONCLUSIONS: The EFC-based sequential price adjustment method consistently improved NHB and NMB across all three cancer types, demonstrating enhanced health system efficiency. These findings offer quantitative support for revising Japan's cost-effectiveness evaluation framework, particularly regarding comparator selection and price adjustment rules.
METHODS: Cost-effectiveness analyses were conducted for first-line pharmacotherapies in advanced NSCLC, pancreatic cancer, and gastric cancer from a Japanese public payer perspective using partitioned survival analysis models, with indirect comparisons where head-to-head trials were unavailable. Technologies were classified as EFC-constituting, extended-dominated, or strictly dominated. The sequential method applied a 15% price reduction to dominated technologies and graduated reductions (0-15%) to EFC-constituting technologies based on sequentially recalculated ICERs, with a feedback loop ensuring upstream adjustments informed downstream calculations. Health economic benefits were assessed via net health benefit (NHB) and net monetary benefit (NMB) at WTP thresholds of ¥7.5M, ¥11.25M, and ¥15M/QALY.
RESULTS: Four technologies constituted the EFC in each cancer type (NSCLC: 6 total; pancreatic: 8; gastric: 11). All NSCLC technologies had ICERs far exceeding ¥15M/QALY; a uniform 15% reduction improved mean NHB by +0.388 QALY (WTP ¥15M) and total NMB by ¥34.9M. In pancreatic cancer, NMB improvement was modest (+¥1.2M), reflecting lower drug costs. In gastric cancer, mean NHB turned positive at WTP ¥11.25M/QALY (Δ+0.094 QALY) and total NMB improved by ¥11.7M.
CONCLUSIONS: The EFC-based sequential price adjustment method consistently improved NHB and NMB across all three cancer types, demonstrating enhanced health system efficiency. These findings offer quantitative support for revising Japan's cost-effectiveness evaluation framework, particularly regarding comparator selection and price adjustment rules.
Conference/Value in Health Info
2026-09, ISPOR Asia Pacific 2026, Bangkok, Thailand
Value in Health, Volume 55, Issue S1
Code
HPR43
Topic
Health Policy & Regulatory
Topic Subcategory
Pricing Policy & Schemes
Disease
SDC: Oncology