— Dominant viral variants, vaccination/prior infection status, and evidence on Paxlovid continue to evolve, but ICER is presenting an update based on recent evidence to help inform new discussions on fair pricing for Paxlovid as shift nears from federal contracts to commercial insurer payment  —

— New data suggests Paxlovid will achieve common thresholds of cost-effectiveness if priced between $563-$906 per treatment course —

— Details of this update using the ICER Analytics™ platform have been posted for ICER Analytics subscribers to emphasize how individual insurers and health systems can input evolving data and cost structures to create a customized health benefit price benchmark —

BOSTON, December 20, 2022 – Based on a review of new data since our initial assessment in May 2022, the Institute for Clinical and Economic Review (ICER) today posted an update to the health benefit price benchmark for nirmatrelvir/ritonavir (Paxlovid™, Pfizer) for the treatment of COVID-19. 

Download: Technical Brief

In May 2022, we posted a special assessment of several emerging outpatient treatment options for COVID-19.  Since that time, Paxlovid has established itself as the leading treatment option.  In addition, since May 2022 the viral epidemiology of COVID-19 has continued to evolve, increasing numbers of Americans have either been vaccinated and/or gained increased immunity from prior infections, and further evidence has been published on the relative effectiveness of treatment.  It is also anticipated that in early to mid-2023 the payment for Paxlovid for many patients will begin to shift from prior federal contracts over to new pricing and payment arrangements negotiated between Pfizer and commercial insurers.  Although dominant viral variants, vaccination/prior infection status, and evidence on Paxlovid will continue to evolve, and some questions, such as the relative impact on long COVID are still highly uncertain, we are presenting an update to our calculations of a health benefit price benchmark range for Paxlovid at this time to help inform new discussions on fair pricing for the dominant outpatient treatment option for COVID-19. 

New data suggests Paxlovid will achieve common thresholds of cost-effectiveness if priced between $563-$906 per treatment course.  This range is lower than the initial health benefit price benchmark, due largely to evidence suggesting lower risks for hospitalization among untreated patients and lower relative reduction in hospitalization with Paxlovid.  Detailed information on the updated inputs to the COVID-19 economic model is available on the ICER Analytics platform.  After review of new data since May 2022, the strongest basis for an updated assessment was deemed to come from a publication of new data by the CDC released on December 2, 2022.

“The evidence on outpatient treatments for COVID-19 must be viewed as highly sensitive to the evolving landscape of COVID-19 variants and vaccination status in the US,” said ICER President Steven Pearson, MD, MSc. “As hospitalization rates due to COVID-19 rise or fall in the future due to changes in the COVID-19 landscape, the clinical value of Paxlovid will change accordingly.  Nonetheless, with substantial new data now available from recent experience during the Omicron wave earlier this year, and with new negotiations underway on pricing and payment between commercial insurers and the manufacturer, we believe it will be helpful for all stakeholders to have updated calculations of a price that aligns with the evidence on benefits to patients.  We acknowledge that there are other paradigms of fair pricing that can be applied, particularly in pandemic environments, including analyses of fair profit over and above the cost of production, and considerations of the impact of treatment on broader societal factors such as business activity and education.  For this reason, and with the evidence continuing to evolve rapidly, we want to encourage all stakeholders, including patient groups, payers, and drug makers, to use the ICER Analytics platform to apply their own judgment of the emerging evidence in support of a transparent discussion around value and fair pricing.”

Informational COVID-19 ICER Analytics™ Demonstration

Now available to all ICER Analytics subscribers, ICER’s Director of Health Economics Melanie Whittington, PhD, MS demonstrates the COVID-19 economic model in the Interactive Modeler™, including how it was used for this Paxlovid update to our previous COVID-19 assessment and how stakeholders can continue to use it as the COVID-19 landscape evolves. This recording is posted within ICER Analytics and is available to all users of the platform.  

The Interactive Modeler within ICER Analytics provides users with a deeper understanding of ICER’s models and architecture, as well as the ability to insert user-specific prices and data on patient characteristics, or their own assumptions about drug performance and uptake. Life science companies are also able to “publish” their own alternative cost-effectiveness findings into the ICER Evidence Compendium™ so that other users of the platform see both the original ICER results and those of the manufacturer side-by-side.

Key Findings

Based on the current evidence, ICER’s health-benefit price benchmark (HBPB) for Paxlovid is $563-$906 per treatment course.

ICER’s HBPB is a price range suggesting the highest US price a manufacturer should charge for a treatment, based on the amount of improvement in overall health patients receive from that treatment, when a higher price would cause disproportionately greater losses in health among other patients in the health system due to rising overall costs of health care and health insurance. In short, it is the top price range at which a health system can reward innovation and better health for patients without doing more harm than good.

About ICER

The Institute for Clinical and Economic Review (ICER) is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. ICER’s reports include evidence-based calculations of prices for new drugs that accurately reflect the degree of improvement expected in long-term patient outcomes, while also highlighting price levels that might contribute to unaffordable short-term cost growth for the overall health care system.