We investigated how health technology assessment (HTA) organizations around the world have handled drug genericization (an allowance for future generic drug entry and subsequent drug price declines) in their guidelines for cost-effectiveness analysis. We also analyzed a large sample of published cost-effectiveness analyses to examine prevailing practices in the field.

We reviewed 43 HTA guidelines to determine whether and how they addressed drug genericization in their cost-effectiveness analyses. We also selected a sample of 270 US-based cost-effectiveness analyses from the Tufts Medical Center’s Cost-Effectiveness Analysis Registry, restricting the sample to studies on pharmaceuticals published from 1991-2019 and to analyses taking a lifetime time horizon. For each study, we analyzed whether genericization was examined at all (and if so, whether in base case or sensitivity analyses), and how the inclusion of genericization assumptions influenced the estimated incremental cost-effectiveness ratios.

Fourteen (33%) of the 43 HTA guidelines mention genericization for cost-effectiveness analyses and 4 (9%)– from New Zealand, Norway, and the United States (ISPOR, Second Panel) – recommend that base case analyses include assumptions about future drug price changes due to genericization. Most published cost-effectiveness analyses (94%) do not include assumptions about future generic prices for intervention drugs. Only 2% include such assumptions about comparator drugs. Most studies (72%) conduct sensitivity analyses on drug prices unrelated to genericization.

The omission of assumptions about genericization means that cost-effectiveness analyses may be misrepresenting the opportunity costs of drugs in the long run. Clearer guidance for the field is needed -- for brand name drugs under investigation and for comparator brand-name drugs if applicable -- and on other price dynamics that might influence a drug’s cost-effectiveness.