Health Economics for Builders and Backers, September 2026

What’s New and What Matters this Month

In this month’s briefing, we start by providing our commentary on the content we released this month and close by discussing recently published literature that is relevant for this audience.

Is the unmet need in atherosclerotic cardiovascular disease still large enough for novel therapeutics to be worth it to society?

In a new analysis, we quantified the gaps in health-adjusted life expectancy, caregiver requirements, medical costs, and workforce participation between someone living with atherosclerotic cardiovascular disease (ASCVD) and a comparable person from the general US population without ASCVD. We then estimated how much societal value could be created if innovation was able to close those gaps.

We calculated a 3-year gap in health-adjusted life expectancy between those living with ASCVD and the general population. Fully closing this gap could create approximately $1 million to $4 million in value per person living with ASCVD. Beyond improving health, closing the gaps could free up approximately $2,400 worth of disease-related caregiver time, avoid approximately $175,000 in ASCVD-related healthcare costs, and generate more than $34,000 in additional labor production per person living with ASCVD. These estimates should not be interpreted as a price for an ASCVD secondary prevention therapy, but rather the magnitude of the unmet need and the potential value of closing it. We created an infographic to summarize the opportunity for innovation in ASCVD and it can be found here.

For builders and backers: Safe and effective therapeutics for the secondary prevention of ASCVD could still create enormous societal value. The societal value a therapeutic could create would extend far beyond its exclusivity period and would continue to generate societal returns long after its “high” price tag.

What evidence drives the value proposition of a drug for the secondary prevention of ASCVD and should be collected as part of the evidence package? The primary clinical endpoint that supports the pharmacoeconomic value proposition is the treatment’s effectiveness reducing major adverse cardiovascular events (MACE). Although this clinical endpoint is already commonly included in the evidence package, it is the downstream consequences (e.g., mortality, quality of life decrement, health system costs) of a MACE that drive the health economic value proposition. The health system costs to manage each event, the quality-of-life impact from each event, and the mortality risk associated with each event are what is really driving the health economic proposition. Therefore, evidence on the cost, quality of life, and mortality associated with each of these events, in addition to the risk of each event, is necessary to support the value proposition.

For builders and backers: Some evidence to support the value proposition will likely come from outside the trial such as the health and economic impacts of each of these cardiovascular events. The clinical evidence package can be supplemented with evidence from the literature, claims databases, and real-world evidence to gather data to support market access activities in addition to evidence for regulatory approval.

How does a drug’s net price vary across different insurance markets? Be sure to check out our full podcast episode with Dr. Inma Hernandez where we dig into this question much deeper, but briefly the net price realized by the drug’s innovator varies across the different insurance markets (e.g., commercial, Medicaid, Medicare Part B, and Medicare Part D). This is because each market has a different combination of negotiated rebates, statutory discounts, and other pricing rules. Even the meaning of “net price” matters: the net price realized by the drug’s innovator is not the same as the net price paid by the insurer. We created an infographic to explain how the net price is established in each major insurance market and it can be found here.

For builders and backers: Understanding the payer mix and the pricing rules associated with each market is important when translating a list price into expected manufacturer revenue.

How does a commercial rebate affect prices outside the commercial market? This was also discussed in our recent podcast episode with Dr. Inma Hernandez. The impact of commercial rebates can extend beyond the commercial market. Medicaid’s statutory rebate is based in part on ‘best price’, which generally captures the deepest discount a manufacturer offers in the commercial market. Additionally, because the 340B price uses a closely related formula to Medicaid, commercial discounts can also affect 340B pricing. A large rebate negotiated to secure formulary position in one commercial market can have pricing consequences across a much larger share of a product’s business (i.e., Medicaid and 340B).

For builders and backers: The implications of offering a large rebate in the commercial market can spill over beyond that one contract as it could have downstream consequences for Medicaid and 340B.

Does Medicare Drug Price Negotiation only affect Medicare? Not necessarily. As we discussed in the podcast episode, the Medicare Maximum Fair Price (MFP) applies directly to selected drugs in Medicare, but the effects can extend beyond Medicare. The MFP factors into the calculation of ‘best price’. If the MFP establishes a new ‘best price’, that can affect Medicaid rebates and 340B prices as well.

For builders and backers: Modeling the impact of Medicare Drug Price Negotiation as simply a price cut in the Medicare market may miss important interactions. The revenue implications can depend on payer mix, existing rebates and discounts, Medicaid exposure, 340B utilization, and how the negotiated price compares with the product’s existing ‘best price’.

How did U.S. drug pricing become so complicated? The complexity of the system is cumulative and has involved new policies layered onto existing policies which were layered onto earlier policies. A fascinating Health Affairs Scholar article traces the evolution of U.S. drug pricing policy from the 1960s through today, and discusses how new policies are frequently introduced to address gaps or unintended consequences created by earlier policies. This article is a nice complement to our podcast episode with Dr. Inma Hernandez as it explains the history behind the interconnected and complex framework we have today.

For builders and backers: As you decipher the impacts and economics of new policies, you also have to consider how they interact with and depend on existing and earlier policies.  

What applications of cost-effectiveness research resonate with U.S. decision makers? The U.S. does not have a centralized health technology assessment process and quality-adjusted life years (QALYs) are not used in some influential drug pricing decisions like Medicare Drug Price Negotiation. But that does not mean cost-effectiveness analysis is irrelevant for U.S. decision makers especially if applied in ways that resonate with U.S. decision makers. A recent article by Dominic Muston at LCP provided ways that cost-effectiveness research can be tailored to be relevant for U.S. decision makers. He said, “To be impactful in the US, health economics research must go beyond traditional population-level analyses of effectiveness and efficiency necessary for HTA submissions, and grapple with the questions that affect the diversity of individual outcomes and experiences with health care.”

For builders and backers: The relevant questions that cost-effectiveness research could answer for you may be: What unmet need are we solving? Which outcomes matter? How does the product compare with current and future alternatives? Which uncertainties could ultimately affect adoption and value?