The challenge of value-based pricing in combination therapy: the case of trastuzumab and pertuzumab in HER2+metastatic breast cancer

Background Under current reimbursement (CR) practice even though an add-on drug in a combination therapy may produce marginal value in terms of health gain, the original therapy may also share in the reward for this additional value. We examine an alternative 'marginal value-based reimbursement' (MVBR) model in which an original therapy would not share in the marginal value. Methods In a case study for treatment of HER2+ metastatic breast cancer, we computed the incremental cost-effectiveness ratios (ICERs) of adding pertuzumab to trastuzumab and docetaxel (PHT) vs. trastuzumab and docetaxel (HT) under the CR and the MVBR models, respectively. We further estimated the revised cost of pertuzumab under three alternative willingness-to-pay thresholds based on (a) using the current ICER of PHT vs. HT, (b) the historical ICER of HT vs. docetaxel, and (c) applying the oft-used $150,000/quality-adjusted life year (QALY) gained. Results If reimbursement were changed from CR to MVBR, at the current price of pertuzumab, the ICER would decline from $409,213 to $323,236/QALY gained. If the price were adjusted under the three thresholds, the payment for pertuzumab would be increased by between 32% and 93%. Conclusion The proposed MVBR model would provide a stronger economic incentive to develop add-on drugs.