1047-P: Estimating QALY-Based Price Ranges for Diabetes Drugs under IRA Negotiation

Congress intends to exclude QALYs from the Inflation Reduction Act’s (IRA) Price Negotiation, yet these measures provide valuable pharmacoeconomic insights. Despite concerns of discrimination against the elderly and disabled, QALY could serve as an objective measure of cumulative health, and the discrimination can be addressed by choosing different willingness-to-pay (WTP) levels across subgroups. We used the BRAVO diabetes microsimulation model to project lifetime outcomes for four IRA-listed diabetes drugs (dapagliflozin, empagliflozin, sitagliptin, insulin aspart) for a weighted sample of 1.03 million Medicare beneficiaries with diabetes from the National Health and Nutrition Examination Survey. Drug and service costs were derived from 2018 Medicare claims and QALYs were calculated using Health Utilities Index equation, both adjusted at 3% discount rates. We calculated QALY-based price ranges for the four drugs under various WTP thresholds. Price ranges for diabetes drugs to be cost-effective at different WTP levels are much lower than current price references (Figure). Adjustment of prices for all four drugs may be necessary depending on the payers’ chosen WTP level. Our scale provides QALY-based price benchmarks for diabetes drug pricing to aid payers in negotiations. In September, upon the release of the IRA-determined price, we will evaluate its position on our price scale and assess the reflected WTP.

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