Evaluating Therapeutic Alternative Selection in Medicare's Initial Drug Price Negotiation Explanations
Author(s)
Tyler D. Wagner, PharmD, PhD, Jacquelyn McRae, MS, PharmD, Jon D. Campbell, PhD, Julie A. Patterson, PharmD, PhD;
National Pharmaceutical Council, Washington, DC, USA
National Pharmaceutical Council, Washington, DC, USA
Presentation Documents
OBJECTIVES: To characterize the therapeutic alternatives (TAs) identified in Centers for Medicare & Medicaid Services' (CMS) maximum fair price (MFP) explanations for the first ten drugs selected for the Medicare Drug Price Negotiation Program.
METHODS: Therapeutic alternatives identified in the MFP explanations published December 2024 were compared to the selected drugs on three characteristics based on the Agency for Healthcare Research and Quality’s guidance on comparator selection in comparative effectiveness research: mechanism of action, class as defined by the US Pharmacopoeia, and treatment modality, narrowly defined here as route of administration. Descriptive statistics were used to summarize whether TAs aligned with their corresponding CMS IPAY 2026 selected drugs on these three characteristics.
RESULTS: Across the 10 selected drugs, the number of TAs identified by CMS ranged from 1 to 10 unique options per drug (median: 7; IQR: 5-9). The highest number of TAs was identified for selected diabetes and immunologic drugs (medians: 9 and 7, respectively). Across 33 unique drug-indication pairs, the median number of TAs selected by CMS was 2 (range: 1-9; IQR: 1-5). Across all 65 TAs, a minority had the same mechanism of action as their corresponding selected drug (n=12, 18.5%). Approximately three-fourths (n=47, 72.3%) were in the same USP class, and 80% (n=52) had at least one formulation with the same route of administration as the selected drug. Overall, fewer than one in five TAs (n=12, 18.5%) aligned with the selected drug on all three characteristics studied.
CONCLUSIONS: Our analysis suggests CMS-identified TAs differed from selected drugs on key characteristics, including mechanism of action, USP class, and route of administration. Given that comparator selection is a fundamental driver in the outcomes and potential validity of assessments of a drug's relative clinical or economic benefits, these findings amplify concerns surrounding the appropriateness of TA selection during the MFP determination process.
METHODS: Therapeutic alternatives identified in the MFP explanations published December 2024 were compared to the selected drugs on three characteristics based on the Agency for Healthcare Research and Quality’s guidance on comparator selection in comparative effectiveness research: mechanism of action, class as defined by the US Pharmacopoeia, and treatment modality, narrowly defined here as route of administration. Descriptive statistics were used to summarize whether TAs aligned with their corresponding CMS IPAY 2026 selected drugs on these three characteristics.
RESULTS: Across the 10 selected drugs, the number of TAs identified by CMS ranged from 1 to 10 unique options per drug (median: 7; IQR: 5-9). The highest number of TAs was identified for selected diabetes and immunologic drugs (medians: 9 and 7, respectively). Across 33 unique drug-indication pairs, the median number of TAs selected by CMS was 2 (range: 1-9; IQR: 1-5). Across all 65 TAs, a minority had the same mechanism of action as their corresponding selected drug (n=12, 18.5%). Approximately three-fourths (n=47, 72.3%) were in the same USP class, and 80% (n=52) had at least one formulation with the same route of administration as the selected drug. Overall, fewer than one in five TAs (n=12, 18.5%) aligned with the selected drug on all three characteristics studied.
CONCLUSIONS: Our analysis suggests CMS-identified TAs differed from selected drugs on key characteristics, including mechanism of action, USP class, and route of administration. Given that comparator selection is a fundamental driver in the outcomes and potential validity of assessments of a drug's relative clinical or economic benefits, these findings amplify concerns surrounding the appropriateness of TA selection during the MFP determination process.
Conference/Value in Health Info
2025-05, ISPOR 2025, Montréal, Quebec, CA
Value in Health, Volume 28, Issue S1
Code
HPR29
Topic
Health Policy & Regulatory
Topic Subcategory
Reimbursement & Access Policy
Disease
No Additional Disease & Conditions/Specialized Treatment Areas