OBJECTIVES: Current practice in value assessment of pharmaceuticals is to include a static price at market launch. Recent publications suggest incorporating dynamic pricing, including price changes until patent expiration and genericization post-patent expiration, for chronic disease medications. Predicting actual price dynamics is difficult because of idiosyncrasies of the market for branded drugs. We compare the standard static approach to two dynamic scenarios using replicated value assessment applications.

METHODS: We replicated two cost-effectiveness analyses published by the Institute for Clinical and Economic Review including omalizumab for the treatment of allergic asthma and elagolix for the treatment of endometriosis. We analyzed two dynamic pricing scenarios: 1) observed net pricing changes using SSR Health data beyond the time horizon of the original ICER assessments (2019 – 2021); and 2) the same observed pricing changes and an assumed 50% price reduction post-patent expiration date based on aggregate data from branded drugs after loss of exclusivity. The primary outcome was the relative percentage change in incremental cost-effectiveness ratios (ICERs) per quality-adjusted life year (QALY) using the dynamic pricing scenarios versus static pricing.

RESULTS: Base-case ICERs were $325,000 per QALY and $81,000 per QALY for omalizumab and elagolix, respectively. Scenario 1 without genericization resulted in relative changes in ICERs of +10% and +8% for omalizumab and elagolix, respectively. Scenario 2 with genericization resulted in relative changes in ICERs of -30% and -22% for omalizumab and elagolix, respectively. In both scenarios, omalizumab’s ICER remained above $150,000 per QALY and elagolix’s ICER remained between $50,000 and $100,000 per QALY.

CONCLUSIONS: While we observed similar conclusions on cost-effectiveness when including dynamic pricing scenarios, imprecision of the assumed genericization price reductions highlight the challenges of accounting for dynamic pricing in value assessment. More work is needed to predict net pricing dynamics after launch to determine if this approach can meaningfully inform value assessment applications.