Are We Getting Good Value for Innovative Therapies in the US? Findings From Generalized Cost-Effectiveness Analyses (GCEAs)
Author(s)
Richard Xie, PhD1, Peter Rubin, MBA2, Peter Kolchinsky, PhD3, Jeff Sullivan, MS4.
1RA Capital Management, Newton, MA, USA, 2NPLB, Chevy Chase, MD, USA, 3RA Capital Management, Boston, MA, USA, 4EntityRisk, Inc, Dedham, MA, USA.
1RA Capital Management, Newton, MA, USA, 2NPLB, Chevy Chase, MD, USA, 3RA Capital Management, Boston, MA, USA, 4EntityRisk, Inc, Dedham, MA, USA.
OBJECTIVES: Generalized Cost-Effectiveness Analysis (GCEA) has been proposed as a more comprehensive method to capture the societal value of innovative therapies. This study compared US market prices with value-based prices (VBPs) derived from both GCEAs and traditional cost-effectiveness analyses (TCEAs) to assess whether the United States is getting good value for innovative therapies and whether other countries are paying their fair share.
METHODS: Twelve treatments were selected based on budget and policy impact, as well as the availability of TCEA models in the Tufts CEA Registry (CEAR) or the Institute for Clinical and Economic Review’s (ICER) final assessment reports. For each treatment, annual net US market prices were obtained from GlobalData and the published literature; recommended prices were extracted from the Canadian health technology agency (HTA).
We replicated existing TCEA models, then adapted them into GCEAs by incorporating six novel value elements (e.g., outcome uncertainty). We compared the resulting TCEA- and GCEA-based VBPs with US market prices. Lastly, we approximated a “fair” price for Canada by applying the ratio of US-to-Canadian GDP per capita to the US market prices, and we compared these “fair” prices with Canadian HTA-recommended prices.
RESULTS: On average, TCEA-derived VBPs were 23.7% of those generated by GCEAs. US market prices were 69% lower than GCEA-based VBPs. The difference between market prices and societal value was larger for drugs treating chronic conditions such as cardiovascular disease and type 2 diabetes. Compared with our “fair” price estimates, Canadian HTA-recommended prices were, on average, 27% higher.
CONCLUSIONS: GCEAs yielded more comprehensive estimates of the societal value of innovative therapies. These findings suggest that the United States is obtaining good value for these treatments, effectively subsidizing health gains for other countries.
METHODS: Twelve treatments were selected based on budget and policy impact, as well as the availability of TCEA models in the Tufts CEA Registry (CEAR) or the Institute for Clinical and Economic Review’s (ICER) final assessment reports. For each treatment, annual net US market prices were obtained from GlobalData and the published literature; recommended prices were extracted from the Canadian health technology agency (HTA).
We replicated existing TCEA models, then adapted them into GCEAs by incorporating six novel value elements (e.g., outcome uncertainty). We compared the resulting TCEA- and GCEA-based VBPs with US market prices. Lastly, we approximated a “fair” price for Canada by applying the ratio of US-to-Canadian GDP per capita to the US market prices, and we compared these “fair” prices with Canadian HTA-recommended prices.
RESULTS: On average, TCEA-derived VBPs were 23.7% of those generated by GCEAs. US market prices were 69% lower than GCEA-based VBPs. The difference between market prices and societal value was larger for drugs treating chronic conditions such as cardiovascular disease and type 2 diabetes. Compared with our “fair” price estimates, Canadian HTA-recommended prices were, on average, 27% higher.
CONCLUSIONS: GCEAs yielded more comprehensive estimates of the societal value of innovative therapies. These findings suggest that the United States is obtaining good value for these treatments, effectively subsidizing health gains for other countries.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
HPR28
Topic
Economic Evaluation, Health Policy & Regulatory, Health Technology Assessment
Topic Subcategory
Pricing Policy & Schemes
Disease
Cardiovascular Disorders (including MI, Stroke, Circulatory), Oncology, Rare & Orphan Diseases