ISPOR Drug Cost Good Research Practices Task Force

Task Force Chairs
  • James Smeeding RPh, MBA, President, JestaRx Group
  • Joel Hay PhD, Associate Professor, University of Southern California

BACKGROUND
Drug costs, of the study drug and comparators, are important parameters in pharmacoeconomic studies. However, compared with other parameters such as utility estimates, there has been relatively little study of how drug costs are estimated, whether the methods are consistent across studies in the same jurisdiction and whether the methods used are theoretically correct. The costs of the drug regimen involve not only the estimation of the drug price, but the impact of any wholesale discounts, pharmacy on-costs and assumptions about wastage (owing to package or vial size).

There is a growing theoretical literature, often linked to discussions about patent protection, that suggests that the market prices for drugs are not good approximations for the social opportunity cost (the theoretically correct estimate of cost to be used in economic evaluations undertaken from the societal perspective). Issues of importing price controls, parallel trade and the globalisation of the pharmaceutical market make these pricing issues even more relevant to best practice guidelines for pharmacoeconomics.

In the USA, the issue of drug cost in studies for reimbursement committees has recently taken on more policy significance, with the decision by the Center for Medicare and Medicaid Services (CMS) to base reimbursement on Average Sales Price (ASP). Up until now most cost studies have quoted costs based on a recent Average Wholesale Price (AWP). ASP factors in discounts and rebates and the implications of this for economic evaluations, both for reimbursement submissions and publication, requires more investigation.

For more information on drug cost issues, see: DEVELOPING STANDARDS FOR DRUG COSTS IN PHARMACOECONOMIC STUDIES

MISSION

The mission of this Task Force is to develop good research practices for using drug costs in pharmacoeconomic studies.

The specific tasks are to develop and publish:

  • A review of current drug cost practices in pharmacoeconomics studies undertaken in the US and five major European markets. Questions to be addressed in this review are: (a) are drug costing methods adequately reported in published studies? (b) Does current practice vary greatly? (c) Are these variations important for study results?
  • A review of the conceptual and methodologic literature on drug prices and their relation to social opportunity costs, including commentaries on the recent literature on drug patent protection
  • A best practices for using drug costs in pharmacoeconomic studies document

ISPOR GOOD RESEARCH PRACTICES INDEX