Objectives

Understanding the global implications of proposed US international reference price (IRP) measures for drugs reimbursed through Medicare Part B.

Methods

Multiple 2019 proposals have been made to reform US drug pricing. We concentrate on two: the Trump Administration’s, covering only Medicare Part B drugs; and ‘H.R. 3’, covering both Medicare Part B and Part D. The former suggests a ‘most favoured nation’ (MFN) approach, whereas the latter discusses capping drug prices at 120% of the average price in Australia, Canada, France, Germany, Japan, and the United Kingdom.

Since both proposals cite Medicare Part B, the following criteria were used to select drugs for analysis:

• Medicare Part B drugs with >$100M total 2017 spending
• Single source drugs only (no generics or biosimilars as of Dec 2019)
• Vaccines, immunoglobulins, blood products excluded
• Drugs approved after January 2010
• Drug price data available in US and 6 reference markets (ex-factory prices analysed in all countries; reimbursed price used in Japan; ASP included for the US)

Data collection cut-off Dec 10, 2019.

Results

10 drugs met the inclusion criteria. On average, reimbursed prices in the US would be:

• At launch, 59% lower (range: 33% to 80%) based on MFN and 31% lower (range: 10% to 67%) based on the 120% cap.
• Currently, 65% lower (range: 40% to 88%) based on MFN and 42% lower (range: 19% to 78%) based on the 120% cap.

MFN approach is consistently driven by lower French and Australian prices.

Conclusions

Reimbursed/negotiated prices for Part B drugs would decline by over 50% if proposed IRP rules were implemented. Final methodology, including countries’ formula to be used and price levels (e.g. ex-factory, public, net, etc.) will determine the extent of the impact. Changes along these lines would have major implications for global pricing strategies / launch decisions and must be monitored.