Health Affairs October 18, 2023
This commentary argues that practitioners of cost-effectiveness analyses should incorporate dynamic drug pricing into formal cost-effectiveness analyses (CEAs). For reasons we discuss, doing so will more accurately reflect drug costs over time. The advent of the Inflation Reduction Act (IRA) makes the inclusion of dynamic drug pricing in CEAs even more important, as the law includes manufacturer rebates that are tied to inflation and Medicare price negotiations that will alter the price of certain drugs prior to and after their loss of exclusivity.
Traditional Cost-Effectiveness Analyses
CEAs can inform coverage, reimbursement, and pricing decisions for drugs (and other interventions) by accounting for their anticipated health outcomes and costs. These analyses are typically conducted around the time of a drug’s market...
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