Lawrenceville, NJ, USA—June 19, 2018—Value in Health, the official journal of ISPOR (the professional society for health economics and outcomes research), announced today the publication of a study introducing a novel strategy for obtaining reasonable drug cost estimates for US-based cost-effectiveness analyses. The report, A Transparent and Consistent Approach to Assess US Outpatient Drug Costs for Use in Cost-Effectiveness Analyses, was published in the June 2018 issue of Value in Health

To estimate the net drug price for any given brand or generic drug, the strategy suggests using the National Average Drug Acquisition Cost (NADAC) as the upper bound of the estimate, the Veterans Affairs Federal Supply Schedule (VAFSS) as the lower bound, and the midpoint between the two as the base case. This strategy is transparent, consistent, and applicable to all US-based cost-effectiveness analyses. 

This new cost assessment method stands in contrast to estimating a drug’s cost based on the wholesale acquisition cost (WAC), which is currently the most prevalent strategy used in cost-effectiveness analyses. The authors point out that the WAC fails to account for discounts pharmacies and payers receive when acquiring drugs and thus may be an overestimate for the base case when conducting a cost-effectiveness analysis. 

“Our article provides a clear methodology that improves on current practice to utilize metrics that do not rely on a particular National Drug Code list price,” said lead author Joseph Levy, PhD, Department of Pharmaceutical Health Services Research, University of Maryland School of Pharmacy, Baltimore, MD, USA. “Overall, our approach represents the best available recommendations to measure drug costs in the United States because it improves transparency in drug cost estimates and provides consistency in computing results to inform decision makers.” 



ISPOR, the professional society for health economics and outcomes research (HEOR), is an international, multistakeholder, nonprofit dedicated to advancing HEOR excellence to improve decision making for health globally. The Society is the leading source for scientific conferences, peer-reviewed and MEDLINE®-indexed publications, good practices guidance, education, collaboration, and tools/resources in the field.
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Value in Health (ISSN 1098-3015) is an international, indexed journal that publishes original research and health policy articles that advance the field of health economics and outcomes research to help healthcare leaders make evidence-based decisions. The journal’s 2016 impact factor score is 4.235. Value in Health is ranked 3rd out of 77 journals in health policy and services, 7th out of 347 journals in economics, and 9th out of 90 journals in healthcare sciences and services. Value in Health is a monthly publication that circulates to more than 10,000 readers around the world.
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Journal Link: Value in Health, Jun-2018