With drug prices on the rise, more and more drugs will be deemed ineligible for reimbursement, challenging drug developers to provide evidence of clinical superiority.
Exclusion lists, which catalogue all drugs that do not qualify for reimbursement, are intended to reflect both clinical and cost-effectiveness.
However, according to a recent study by Tufts Center for the Study of Drug Development, cost-effectiveness may not correlate with exclusion. Instead, the report states that drug manufacturer rebates for pharmaceutical benefit managers and patients play a key role in determining exclusions.
Exclusion lists present a challenge to the drug industry when products are excluded from coverage by a pharmaceutical benefit manager. Exclusions can limit the ability of a drug company to acquire market share, even with a small amount of products being excluded. As the size of the exclusion list grows, so do the challenges.
"In fact, the traditional rebate mechanism — drug companies provide rebates to pbm based on their ability to move market share — appears to continue to dominate," said Joshua P. Cohen, PhD, Research Associate Professor at Tufts Center for the Study of Drug Development. "This said, positioning of products on formulary as either excluded or recommended is increasingly a function of clinical and cost-effectiveness. So, in order for drug companies to compete they will have to demonstrate their product's value, specifically its clinical and cost-effectiveness."
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