As a key component of the Medicare Drug Price Negotiation Program under the Inflation Reduction Act (IRA), the Centers for Medicare and Medicaid Services (CMS) compares products under negotiation with therapeutic alternatives to establish comparative benchmarks for safety, effectiveness, and cost. Across the globe, health technology assessment (HTA) bodies use comparative processes to inform decisions about product coverage, cost-effectiveness, and other key metrics specific to each country’s healthcare system.  

Current guidance stipulates that CMS uses FDA-approved labels, clinical guidelines, medical literature, and drug compendia, among other factors, to identify appropriate therapeutic alternatives for each indication for every negotiated drug. The agency also reviews input from manufacturers, patients, and providers. However, it is unclear what factors are prioritized in such decisions and to what extent this input influences the outcome.  

Under the current administration, there has been renewed focus on Most-Favored Nation (MFN) pricing as a strategy to control drug costs by aligning US prices more closely with those paid in other high-income countries. Any such policy shift would also indirectly import ex-US HTA decisions and priorities into the U.S. system—even though they reflect different clinical practices, cost structures, and policy goals that may not align with U.S. healthcare needs. 

Avalere Health analyzed the extent to which comparator selection varies between peer health systems with standing HTA procedures to offer context for stakeholders preparing to engage with CMS on Medicare Negotiations or understand the potential impact of ex-US technology assessments MFN-influenced decisions.  

Analysis Approach 

Avalere Health assessed the comparators used across four countries and their corresponding HTA bodies for the same set of drugs. We evaluated Canada’s Agency for Drugs and Technologies in Health (CADTH), United Kingdom’s National Institute for Health and Care Excellence (NICE), France’s Haute Autorité de Santé (HAS), and Germany’s Gemeinsamer Bundesausschuss (G-BA). The drugs for this analysis have been selected for Medicare negotiation and cover a variety of therapeutic areas (oncology, hematology, diabetes, and respiratory). In total, the analysis assessed five products with six indications across four therapeutic areas.  

Key Findings 

First, Avalere Health compared the approved US indications for the analyzed products to those reviewed by each HTA. The results show that of the six total indications that were considered in the analysis, only one had the same set of indications reviewed across all HTA bodies, suggesting that the reimbursed price in those markets for a given product may not reflect the totality of all licensed indications in some markets (Figure 1).   

Figure 1. Selection of Product Indications for HTA Review 

COPD: Chronic obstructive pulmonary disease; FVC: Forced vital capacity 

Note. The red x indicates that the indication for the product was not considered, and therefore the HTA’s value assessment did not consider the indication. The text “No Formal Review” indicates that the HTA did not conduct a value assessment on the product. 

Then, Avalere Health compared the therapeutic alternatives that each HTA used as comparators in the evaluations. The results show that the selection of comparators varies widely across different countries’ assessments. Of the five medicines assessed across four disease areas, different comparators were used across all HTAs, in each scenario resulting in different prices. This is particularly complicated in cancer technology assessments, where indications are highly nuanced and approvals are focused on specific patient subgroups, tumor histology, biomarkers or line of therapy.  

For the oncology drug that Avalere Health reviewed in this analysis, HTAs across countries assessed chose highly variable comparators (Figure 2). 

Figure 2. Comparators Used Across HTAs For Commonly Used Oncolytic

Note. Green checkmark indicates that the class or treatment was included in the country’s HTA review. Red x indicates that the class or product was not included in the country’s HTA review. Classes with both indicate that while the class overall was not included as a comparator, products within the class were included. 

Conclusion

Comparator selection is a key driver of value assessment outcomes impacting coverage, price point, level of unmet need and other key patient access criteria. The choice of comparators fundamentally shapes how the clinical benefit of the assessed intervention is perceived, and an inappropriate or outdated comparator can misrepresent a product’s real-world value, thereby skewing value assessment results and impacting coverage and reimbursement decisions. This is especially important for complicated therapeutic areas like oncology as comparators can directly impact the evidence gathered and recommendations made to cover a product.

As CMS and manufacturers enter the third year of the Medicare Drug Price Negotiation program–which will include physician-administered drugs with complex and idiosyncratic clinical pathways–stakeholders must carefully consider how therapeutic alternatives are being selected and the impact of that decision on negotiation outcomes. Notably, CMS’s guidance for negotiations grants CMS the latitude to decide on therapeutic alternatives for use in the comparative effectiveness review, which can have a direct and meaningful impact on the initial offer in the price negotiation. Stakeholders should consider how different scenarios for comparators could change negotiations for products in the absence of more robust guidance, and identify opportunities to ensure that clinically appropriate comparators are used to optimize assessment credibility.

The Medicare Drug Price Negotiation program will continue to have wide-reaching impacts on drug manufacturers. Connect with us to learn more about how Avalere’s multidisciplinary team can help manufacturers understand CMS’s process for identifying therapeutic alternatives for negotiated drugs.