NET-PRICE INFORMATION ASYMMETRY IN REIMBURSEMENT NEGOTIATION: AN ECONOMICALLY JUSTIFIABLE PRICE REFERENCE FRAMEWORK FOR ENTRANT THERAPIES
Author(s)
Ming-Yu Hong, MS1, Wei-ming Huang, PharmD, MD1, Hsiao-Ling Chen, PhD1, Chen-Han Chueh, PhD2, Chun-Wei Hsu, PhD3, Annabelle Day, MS3, Hsin-Chun Chou, MS1, Yi-Wen Tsai, PhD1.
1Institute of Health and Welfare Policy, National Yang Ming Chiao Tung University, Taipei, Taiwan, 2University of California San Diego, San Diego, CA, USA, 3Institute of Neuroscience, National Yang Ming Chiao Tung University, Taipei, Taiwan.
1Institute of Health and Welfare Policy, National Yang Ming Chiao Tung University, Taipei, Taiwan, 2University of California San Diego, San Diego, CA, USA, 3Institute of Neuroscience, National Yang Ming Chiao Tung University, Taipei, Taiwan.
OBJECTIVES: Confidential financial managed entry agreements (MEAs) conceal incumbent comparator net prices, creating information asymmetry in reimbursement negotiations. This study developed an economically justifiable price reference framework (EJP-RF) to estimate benefit-based reference price ranges (EJP-RPR) for entrant therapies and inform payer-manufacturer communication.
METHODS: A three-state partitioned survival model for first-line metastatic pancreatic cancer in Taiwan was used to construct EJP-RPR for a hypothetical innovative therapy, with NALIRIFOX serving as the reimbursed incumbent comparator. Incremental clinical benefit was parameterized using hazard ratios for overall survival and progression-free survival. EJP was defined as the maximum entrant medication-cost multiplier, relative to the incumbent per-administration medication cost of NT$19,033, that remained cost-effective at a threshold of three times GDP per capita. The base-case EJP-RPR was estimated, followed by scenario analyses across alternative incremental clinical-benefit assumptions. Incumbent rebates of 0%-30% were then applied to simulate hidden net-price benchmarks and assess their impact on the EJP-RPR.
RESULTS: Across incremental clinical-benefit scenarios, the EJP-RPR ranged from 1.00 to 2.11 times the incumbent per-administration medication cost without an incumbent rebate, with greater overall survival benefit supporting a higher upper bound. Incumbent rebates under MEAs shifted the EJP-RPR downward; a 30% incumbent rebate reduced the EJP-RPR range to 0.70-1.81. In the equivalent-clinical-benefit scenario, EJP decreased from 1.00 to 0.70.
CONCLUSIONS: Confidential rebates for incumbent therapies obscure net-price benchmarks and may distort estimates of economically justifiable price ranges for entrant therapies. The EJP-RF applies economic evaluation principles to generate benefit-linked price ranges that can support payer-manufacturer decision-making and reimbursement negotiations.
METHODS: A three-state partitioned survival model for first-line metastatic pancreatic cancer in Taiwan was used to construct EJP-RPR for a hypothetical innovative therapy, with NALIRIFOX serving as the reimbursed incumbent comparator. Incremental clinical benefit was parameterized using hazard ratios for overall survival and progression-free survival. EJP was defined as the maximum entrant medication-cost multiplier, relative to the incumbent per-administration medication cost of NT$19,033, that remained cost-effective at a threshold of three times GDP per capita. The base-case EJP-RPR was estimated, followed by scenario analyses across alternative incremental clinical-benefit assumptions. Incumbent rebates of 0%-30% were then applied to simulate hidden net-price benchmarks and assess their impact on the EJP-RPR.
RESULTS: Across incremental clinical-benefit scenarios, the EJP-RPR ranged from 1.00 to 2.11 times the incumbent per-administration medication cost without an incumbent rebate, with greater overall survival benefit supporting a higher upper bound. Incumbent rebates under MEAs shifted the EJP-RPR downward; a 30% incumbent rebate reduced the EJP-RPR range to 0.70-1.81. In the equivalent-clinical-benefit scenario, EJP decreased from 1.00 to 0.70.
CONCLUSIONS: Confidential rebates for incumbent therapies obscure net-price benchmarks and may distort estimates of economically justifiable price ranges for entrant therapies. The EJP-RF applies economic evaluation principles to generate benefit-linked price ranges that can support payer-manufacturer decision-making and reimbursement negotiations.
Conference/Value in Health Info
2026-11, ISPOR Europe 2026, Vienna, Austria
Value in Health, Volume 29, Issue 12S
Code
HPR19
Topic
Economic Evaluation, Health Policy & Regulatory, Health Technology Assessment
Topic Subcategory
Pricing Policy & Schemes, Reimbursement & Access Policy
Disease
Oncology