Objective: To evaluate the influence of drug price dynamics in cost-effectiveness analyses (CEAs).

Methods: We evaluated scenarios involving typical US drug price increases during the exclusivity period and price decreases after the loss of exclusivity (LOE). Worked examples are presented using the Institute for Clinical and Economic Review’s assessments of tezepelumab for the treatment of severe asthma and targeted immune modulators for rheumatoid arthritis.

Results: Tezepelumab case: Yearly 2% price increases during the period of exclusivity and a post-LOE price decrease of 25% yielded an incremental cost per QALY gained that increased over the base case from $430,300 to $444,600 (+3.2%). Yearly 2% price increases followed by a steeper post-LOE price reduction of 40% resulted in a cost per QALY gained of $401,400 (6.8% reduction versus the base case). Rheumatoid arthritis case: Incorporating post-LOE price reductions for etanercept (intervention) and adalimumab (comparator) ranging from 25% to 40% yielded an incremental cost per QALY of $121,000 and $122,300, respectively (<3% increase from the base case of $119,200/QALY). Including a 2% yearly price increase during the projected exclusivity periods of both intervention and comparator increased the cost per QALY gained by more than 60%.

Conclusion: Two biologic treatment cases incorporating price dynamics in CEA had varied impacts on the cost-effectiveness ratio depending on the magnitude of pre-LOE price increase and post-LOE price decrease, and whether the LOE also affected the comparator. Yearly price increase magnitude during the period of exclusivity, among other factors, may counterbalance the effects of lower post-LOE intervention prices.