Build a Budget Impact Analysis Model
Angelia19872020
No3.pptxHCDA 515: example summary deck
Weekend # 1: team presentation and individual assignment example
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Budget Impact of product “X” in Patients with Disease “Y”
Team Name or Individual Name
Case study Number
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The objective and research question
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For a health plan of 1M members, the model estimates the budget impact in each year over a five-year period that would result from the introduction of Product “X” as a treatment option for patients with Disease “Y”
Two scenarios are compared:
Assumes treatment of patients with disease “Y” without Product “X” as a treatment option
WORLD WITHOUT PRODUCT X
WORLD WITH PRODUCT X
Assumes treatment of patients with disease “Y” with Product “X” as a treatment option
Budgetary impact is calculated as the difference in costs between the two scenarios
1M: One Million
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Model overview
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1 to 5 year(s) with 3 years as base case
Commercial: Patients with Disease “Y”
Medicare Advantage: Patients 65+ with Disease “Y”
Third-party payer in the US
Comparator A (Brand)
Comparator B (Brand)
Comparator C (Brand)
Comparator D (Generic)
Comparator E (Generic)
Comparator F (Generic)
Comparator G (Generic)
Comparator H (Generic)
To estimate the budget impact of Product “X” for Disease “Y”
OBJECTIVE
TIME HORIZON
PERSPECTIVE
POPULATION
COMPARATORS
Drug acquisition costs (2019 US Dollars)
Drug administration costs (2019 US Dollars)
COST INPUTS
Total scenario costs
Total cost per member per month (PMPM)
OUTPUTS
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Model flow
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Patients with Disease “Y” and failing 1st Line
ELIGIBLE POPULATION
Therapies without Product “X”
Therapies with Product “X”
TREATMENT MIX
Drug acquisition
Drug administration
Treatment Duration
TREATMENT COSTS
$
Total scenario costs
Total PMPM
MODEL RESULTS
Hypothetical plan of 1,000,000 members
TOTAL POPULATION
Patients with Disease “Y”
DISEASE
PATIENT POPULATION
DISEASE TREATMENTS
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Epidemiology inputs
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| Input | Commercial | Medicare Advantage | ||
| Value | Details | Value | Details | |
| Disease “Y” | 50.80% | Source and methods to utilize | 55% | Source and methods to utilize |
| Failed 1st Line | 23.81% | Source and methods to utilize | 100% | Source and methods to utilize |
| Treated after 1st Line | 1.65% | Source and methods to utilize | 4.60% | Source and methods to utilize |
| With Recent Event | 54% | Source and methods to utilize | 54% | Source and methods to utilize |
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Treatment mix inputs
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| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Product “X” | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Comparator A | 43.9% | 43.9% | 43.9% | 43.9% | 43.9% |
| Comparator B | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
| Comparator C | 6.1% | 6.1% | 6.1% | 6.1% | 6.1% |
| Comparator D | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% |
| Comparator E | 7.5% | 7.5% | 7.5% | 7.5% | 7.5% |
| Comparator F | 0.8% | 0.8% | 0.8% | 0.8% | 0.8% |
| Comparator G | 29.2% | 29.2% | 29.2% | 29.2% | 29.2% |
| Comparator H | 0.3% | 0.3% | 0.3% | 0.3% | 0.3% |
| Total | 100% | 100% | 100% | 100% | 100% |
Current Scenario (without EVENITY™)
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Product “X” | 0.0% | 0.2% | 0.2% | 0.4% | 0.4% |
| Comparator A | 43.9% | 43.9% | 43.9% | 43.9% | 43.9% |
| Comparator B | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
| Comparator C | 6.1% | 6.1% | 6.1% | 6.1% | 6.1% |
| Comparator D | 9.3% | 9.3% | 9.3% | 9.3% | 9.3% |
| Comparator E | 7.5% | 7.5% | 7.5% | 7.5% | 7.5% |
| Comparator F | 0.8% | 0.7% | 0.7% | 0.6% | 0.6% |
| Comparator G | 29.2% | 29.2% | 29.1% | 29.1% | 29.1% |
| Comparator H | 0.3% | 0.2% | 0.2% | 0.2% | 0.2% |
| Total | 100% | 100% | 100% | 100% | 100% |
Current Scenario (with EVENITY™)
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Cost Inputs: Drug Acquisition and Administration
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| Drug | Brand/Generic | Dose Frequency | Strength | Doses per Administration / Year | WAC Annual Cost |
| Product “X” | Brand | Monthly | 210 mg | 2 / 12 | $22,173 |
| Comparator A | Brand | Weekly | 70 mg | 1 / 52 | $98 |
| Comparator B | Brand | Daily | 5 mg | 1 / 365 | $2,586 |
| Comparator C | Brand | Monthly | 150 mg | 1 / 12 | $340 |
| Comparator D | Generic | Annually | 5 mg | 1 / 1 | $300 |
| Comparator E | Generic | Daily | 60 mg | 1 / 365 | $1,341 |
| Comparator F | Generic | Daily | 20 mcg | 1 / 365 | $40,086 |
| Comparator G | Generic | Biannually | 60 mg | 1 / 2 | $2,438 |
| Comparator H | Generic | Daily | 80 mg | 1 / 365 | $22,173 |
Drug Acquisition Costs
Administration and Services Fees
| Commercial | Medicare Advantage | |
| Subcutaneous Injection | $21.72 | $16.94 |
| One IV Infusion | $93.33 | $72.80 |
Provide sources and methods
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Patient population – Commercial Perspective shown
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Provide sources and methods
Provide sources and methods
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Results: per member per month for commercial
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Over 5 years, the budget impact of Product “X” is estimated to be -$0.001 PMPM in a hypothetical 1M commercial member plan
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Year 1 Year 2 Year 3 Year 4 Year 5 Net (Years 1 - 5) 0 -1E-3 -1E-3 -2E-3 -2E-3 -1E-3
Results: cumulative budget impact for commercial
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Under the new scenario, cumulative costs are reduced by an estimated $75,566 over 5 years across 1M commercial members
Projected Total Costs Between Scenarios Over 5 Years
Net Difference
-$75,566
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Current Scenario New Scenario 6925739 6850172
Assumptions and Limitations
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The model assumes all patients complete the entire treatment duration
The model assumes the eligible population identified reflects the size of the population that may be eligible for Product “X”
The treatments included are assumed to reflect the treatments utilized among the eligible population
Treatment costs are assumed to be similar to the wholesale acquisition cost (WAC)
Assumptions
The model is focused on drug acquisition and drug administration costs only and does not consider differences in efficacy that may impact initial treatment
The model excludes the cost of other treatment-related resources including therapeutic drug monitoring, hospital costs, laboratory and diagnostic tests and any procedures or additional medications
Limitations
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Conclusions
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-$1,033,609
Budget Impact
Total Cumulative
-$0.017
decrease
Per Member Per Month
1M: One Million
The entry of Product “X” for Disease “Y” introduces the question of affordability for health plans.
The budget impact model demonstrates cost savings in a hypothetical 1M member health plan in both the Commercial and Medicare Advantage settings
The results should be interpreted within the context of the data inputs and modeling assumptions used as the results may be sensitive to changes in these inputs
-$75,566
Budget Impact
Total Cumulative
-$0.001
decrease
Per Member Per Month
Commercial
Medicare Advantage
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