Money-saving Meds: Researchers Use Pharmaceutical Risk Assessment to Determine New Drug’s Cost-Cutting Benefits

In the April issue of the International Journal of Nephrology and Renovascular Disease, researchers from  the DaVita Clinical Research in Minneapolis, MN used Palisade's @RISK software to develop a cost-offset model that cuts costs for end-stage renal disease treatment using an innovative pharmacological treatment.
 
Currently, about 400,000 end-stage renal disease (ESRD) patients in the US undergo dialysis three or more times per week. The costs for these treatments are staggering—with 85% of patients relying on Medicare as the primary payer, the estimated amount spent on their care is $29 billion.
 
One of the major portions of this cost come from metabolic maintenance medications–the kidney is responsible for both regulating phosphorus levels and red blood cell production. But dialysis is unable to mimic these particular behaviors of a healthy kidney—thus, ESRD patients can suffer from significant anemia, as well as bone and mineral deregulation, resulting in calcium being deposited in arteries instead of bone, with associated increases in clinical events such as fractures and cardiovascular and cerebrovascular events. Thus, patients must use oral phosphate binders to decrease their serum phosphorus levels, and receive regular injections of epoetin alfa (an erythropoiesis-stimulating agent [ESA]) to stimulate red blood cell production, as well as intravenous (IV) iron. All told, oral and injectable medications account for more than half of outpatient dialysis expenses.
 
An experimental oral phosphate binder, ferric citrate, has been found to both manage serum phosphate levels and increase measures of iron and iron storage in the blood, indicating that this single drug may have multiple benefits: treatment as an oral phosphate binder medication and iron source in ESRD patients with anemia. Thus the authors of the study developed a budget impact model estimating the monthly cost associated with the use of ferric citrate in the treatment of hyperphosphatemia with the added benefit of treating iron deficiency associated with ESRD anemia, versus the cost of other currently available phosphate binders. The model was constructed from the perspective of a US managed care plan.
 
 
Monte Carlo simulations were used to address the high uncertainty of the cost-offset model parameters using @RISK. The simulation showed that for each patient with ESRD, a managed care organization, such as Medicare, will likely save between US$104 and US$184 (90% confidence interval) per month with ferric citrate use. These savings translated into a monthly savings of between US$52,164 and US$92,186 (90% confidence interval) per 500 ESRD patients when ferric citrate was compared to other conventional phosphate binders (Figure 2). The monthly model input variables were projected out to determine annual cost estimates. An additional Monte Carlo simulation demonstrated (at 90% probability) that a provider serving 500 dialysis patients could save between US$626,000 and US$1,106,000 annually with the use of ferric citrate.
 
With the help of @RISK, the researchers were able to prove that this promising new drug could help reduce expenses for a health care system that's desperate for cost reductions.
 
Read the original study here.
 

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