OBJECTIVES: Drug prices are innately dynamic, yet conventional economic evaluation assumes a constant price over time. Some healthcare technology assessment agencies, including the Institute for Clinical and Economic Review, do permit the inclusion of life-cycle drug pricing (LCDP) under certain circumstances. However, little guidance is given when this should be implemented and how it should be done. Our aim was to identify methods of incorporating LCDP into cost-effectiveness models, and characterize the current state-of-the-art.

METHODS: We conducted a targeted literature review to identify economic evaluations adopting LCDP via snowballing from known key articles, and a supplementary search of PubMed. Articles were prioritized based on the inclusion of detailed modelling methodology, geography, and recency.

RESULTS: Of the 21 articles reviewed, nine considered the UK in the base case, eight US, and four referenced other countries. Ten articles assessed the impact of LCDP on cost-effectiveness prospectively, nine retrospectively, and two both prospectively and retrospectively. Seventeen included technology-specific assessments and four were technology-agnostic frameworks. Several articles captured price trends via stepwise reductions in price following loss of exclusivity, while others used regression models to extrapolate existing price trends. Methods for adjusting for inflation and obtaining a weighted average price based on the uptake of generics were described. Ten articles included future incident cohorts of patients, seven of which weighted cost-effectiveness results based on anticipated changes in population size.

CONCLUSIONS: A standard modelling framework for incorporating LCDP into economic evaluations – applicable across multiple indications, technologies, and geographies – is currently lacking. Further work is needed to move towards consensus on appropriate data sources for pricing trends, inclusion of future incident patient cohorts, and weighting of cost-effectiveness results across cohorts based on changes in population size. The impact of important healthcare policy changes, such as the Inflation Reduction Act, on price trends must also be considered.