Four Steps To Assess Drug Value

Can Number Needed to Treat (NNT) and drug cost provide a concise starting point to assess a drug’s comparative value and support price negotiations with pharmaceutical companies?

• NNT identifies how many patients you need to treat with one drug versus another drug or placebo to achieve one additional clinical benefit. ¹

Hypothetical Case Study

• Step 1 – Identify drugs to be compared.
  • Drug A
  • Drug B
  • Drug C

• Step 2 – Identify benefit.
  • Percent of patients achieving one additional clinical benefit

• Step 3 – Calculate ² NNT based on FDA label.
  • Drug A NNT = 2.0 versus placebo
  • Drug B NNT = 3.0 versus placebo
  • Drug C NNT = 4.0 versus placebo

• Step 4 – Determine value.
  • Drug cost over 6-month study period.
    • Drug A: $340 per month x 6 month study = $2,040
    • Drug B: $300 per month x 6 month study = $1,800
    • Drug C: $280 per month x 6 month study = $1,680

• Benefit
  • Drug A NNT = 2.0
  • Drug B NNT = 3.0
  • Drug C NNT = 4.0

• Drug value = Cost per one additional clinical benefit.
  • Drug A = $2,040 x 2 = $4,080 per one additional clinical benefit.
  • Drug B = $1,800 x 3 = $5,400 per one additional clinical benefit.
  • Drug C = $1,680 x 4 = $6,720 per one additional clinical benefit.

• Drugs B and C need to reduce their price to have comparable value to Drug A ($4,080 for one additional clinical benefit).
  • Drug B: $4,080 / 3 (NNT) = $1,360 per 6 months = $226 per month, a reduction from the current $300 per month
  • Drug C: $4080 / 4 (NNT) = $1,020 per 6 months = $170 per month, a reduction from the current $280 per month

Discussion

• If drugs have the same clinical benefit, comparing pharmacy costs is a reasonable approach. If the clinical benefit is different, it is critical to compare the clinical benefit and pharmacy costs.

Conclusion

• Using NNT and pharmacy cost is a concise starting point to assess the comparative value of drugs and begin price negotiations with pharmaceutical companies.

 

References

1 – http://clincalc.com/Stats/NNT.aspx?example

2 – http://effectivehealthcare.ahrq.gov/glossary-of-terms/?filterletter=e