It is widely agreed that drugs should be priced to reflect their value, or clinical benefit. But how does one measure clinical benefit? Equinox Group uses a proven method to quantify clinical benefit, derived from our deep experience in assessing unmet medical need.
A new drug’s proposed cost (on Y-axis, inverted scale) should align with its promised clinical benefit (on X-axis) to place it in the “cloud” of successful recent launches.
Locating clinical benefit on a specific scale allows us to examine how benefit is related to drug price in many recent launches that have gained good market access. Our analysis of drugs that have achieved favorable market access shows a clear relationship between cost and benefit. That observation allows us to advise companies on appropriate pricing for their emerging oncology agents.
Our measure of clinical benefit reflects efficacy, safety/tolerability and dosing, and how efficacy affects disease burden – mortality, morbidity, and cost.
We can model the expected attributes of a new agent against the background of disease burden in a specific patient population to test the clients’ desired price for the asset. We can plot the results on the graph above to determine if the new drug falls within “the cloud” of successful agents. If it does, the drug will most likely achieve favorable market access at the desired price. If not, a rethinking of the pricing strategy may be called for. Our analysis can be applied to the US and each of the five major EU countries, and the same framework can deliver estimates of peak-year patient share and revenue.
Clinical benefit and drug cost vary by patient segment because of duration of treatment, disease seriousness, and a host of other factors, so we analyze each target indication separately. That way, agents with potential in multiple populations can be analyzed in each indication to find the optimizing price for the asset across the board.