OBJECTIVES: Drug price negotiation is being considered by the United States Congress. The National Academy of Medicine recommends that negotiated drug prices be based on the value provided by the drugs. One way to inform value-based drug pricing is to cap prices at the level necessary to achieve a given cost-effectiveness threshold. Such value-based prices (VBPs) are recorded in evidence reviews produced by the Institute for Clinical and Economic Review (ICER). The objective of this study is to estimate annual US national drug spending changes if drug prices were capped at ICER VBPs.

METHODS: We obtained drug- and indication-specific VBPs from ICER evidence reports from 2015 to 2020. We merged in drug-specific sales in 2020, as reported in manufacturer 10-Q financial filings collected by SSR Health. We calculated total drug spending before and after applying VBP caps of $100,000/quality-adjusted life-years (QALY) and $150,000/QALY. For drugs with multiple ICER-reported VBPs (due to multiple indications or multiple dosage forms), we used the highest drug-specific VBP, and lowest drug-specific VBP. We tested the change in spending before and after applying VBP using the Wilcoxon signed-rank test. VBPs were inflated to 2020 US dollars.

RESULTS: There were 73 unique drugs with manufacturer-reported sales data in 2020 that also had ICER VBPs. These drugs represented $110.4 billion in total annual US drug spending. Applying the $150,000/QALY cap resulted in reductions in total annual drug spending of $4.3 billion and $18.6 billion using the highest and lowest VBP, respectively. Applying the $100,000/QALY cap resulted in reductions in total drug spending of $36.1 billion and $44.2 billion, using the highest and lowest VBP, respectively. All changes were statistically significant at p <0.01.

CONCLUSIONS: Applying VBP caps even for this small number of ICER-reviewed drugs could result in substantial US national drug savings.