A Blueprint for Assessing Affordability of SGLT2 Inhibitors in the United States

Sodium-glucose cotransporter 2 (SGLT2) inhibitors have emerged as a first-line therapy in diabetes due to their cardiovascular and kidney-protective benefits (1). A growing body of evidence has demonstrated that the clinical benefits of SGLT2 inhibitors extend to nondiabetic CKD (2). An important question is whether these benefits sufficiently offset their hefty price tag in order to justify their use.

In this issue of CJASN, McEwan et al. (3) find that dapagliflozin is cost effective for treatment of both diabetic and nondiabetic CKD in three European countries: the United Kingdom, Germany, and Spain. The authors do so by estimating the incremental cost-effectiveness ratio (ICER), the standard measure of cost-effectiveness in the health economics literature. Mathematically, the ICER is the ratio of the change in costs (with versus without the therapy) and the change in quality-adjusted life years (QALYs) over a patient’s lifetime. Conceptually, the ICER measures the cost of each additional year of perfect life “purchased” by the therapy. The ICER uses QALYs because a year of perfect life is much different from a year with poor quality of life. Very costly medications (such as SGLT2 inhibitors) might be a bargain if the upfront costs result in a large gain in QALYs.

Using longitudinal data from the Dapagliflozin and Prevention of Adverse Outcomes in CKD (DAPA-CKD) trial, the authors developed a clinical model that simulates the clinical course of CKD with and without diabetes. The model includes discrete clinical events, adverse events, CKD progression, and mortality over a theoretical patient’s lifetime. The total cost and accumulated QALYs over the average patient’s lifetime can be estimated with and without dapagliflozin, and they, in turn, are used to estimate its ICER or the drug’s cost-effectiveness. Although dapagliflozin reduces the need for dialysis, total health care expenditures with the drug are more costly for two reasons. First, the drug itself is costly. Second, because dapagliflozin conveys a mortality benefit, overall lifetime health care expenditures are higher when patients receive dapagliflozin. It is important, therefore, that the authors included the background cost of standard of care treatment into their model, including dialysis and transplant.

The authors estimated that dapagliflozin use in addition to standard of care would result in QALY gains of 0.82, 1.00, and 0.96 per patient at ICERs of $8280/QALY, $17,623/QALY, and $11,687/QALY in the United Kingdom, Germany, and Spain, respectively. ICERs were well below the threshold of $50,000/QALY, which most experts consider cost effective. A major limitation of this analysis is that it relies heavily on the simulation’s validity, which extrapolates lifetime costs and outcomes, whereas DAPA-CKD only followed patients for a maximum of 2.7 years (2). To address this concern, the authors carefully calibrated their model to observed data from the trial and ensured that their results were robust to a large range of sensitivity analyses, including a shortened time horizon, costs related to treatment of CKD and downstream complications, and clinical subgroups (supplemental table 10 in McEwan et al. [3]). All deterministic sensitivity analyses demonstrated cost-effectiveness. Additionally, the authors conducted a probabilistic sensitivity analysis, where they varied all parameters simultaneously, with over 99% of simulations cost effective in the United Kingdom, Germany, and Spain.

Subgroup analyses in all three countries suggest that dapagliflozin is more expensive (i.e., higher ICERs) in healthier and younger (eGFR ≥45 and age <65) patients (figure 2 in McEwan et al. [3]). Intuitively, these results are consistent with using an expensive medication that has a significant mortality effect with increasing benefits through long-term, sustained use. Unfortunately, this result may cause private payers (motivated primarily through profits) and public payers (constrained by limited government budgets) to preferentially invest in sicker, older patients who are perceived to be less “expensive.” However, healthier patients likely benefit the most from SGLT2 inhibitors. The authors further corroborate this intuition with a deterministic sensitivity analysis showing that ICERs were most affected by the drug’s cost (supplemental table 10 in McEwan et al. [3]). Thus, policy makers should consider whether more aggressively negotiating prices for these important drugs might offset the incentive to avoid covering SGLT2 inhibitors for younger, healthier patients.

This study adds to a plethora of work demonstrating the cost-effectiveness of SGLT2 inhibitors in both diabetic and nondiabetic kidney disease (Table 1). A key contribution of this study is its relevance to non-US countries, adding to the generalizability of the authors’ findings. The heterogeneity by country allows us to make some notable observations. First, unsurprisingly, the relative cost-effectiveness of the SGLT2 inhibitors appears to be predominantly driven by the drug’s cost. Deterministic sensitivity analyses showed that varying the cost of drug acquisition resulted in large variation on the ICERs for all three countries (supplemental table 10 in McEwan et al. [3]). Second, the authors found that the drug’s cost-effectiveness depends in part on the background costs of CKD treatment. Because taking care of CKD is expensive, a therapy that reduces mortality will result in higher total health care expenditures. Despite having higher drug acquisition costs in the United Kingdom than in Spain, dapagliflozin is more cost effective in the United Kingdom, likely owing to lower costs of standard therapy in the United Kingdom. Taken together, higher drug and overall health care costs explain why SGLT2 inhibitors were less cost effective in Germany. They also explain why other studies show SGLT2 inhibitors are not as cost effective in the United States. Even if the acquisition cost of SGLT2 inhibitors decreases in the United States, we should still expect that they will remain more expensive than in Europe due to the costly nature of US health care.

Table 1.

Summary of cost-effective analyses for SGLT2 inhibitors

Sodium-Glucose Cotransporter 2 Inhibitor	Disease	Country	Annual Cost of Druga	Incremental Cost-Effectiveness Ratio/Quality-Adjusted Life Year Gained	Sensitivity Analyses Highlights
Canagliflozin	Diabetic kidney disease	England	$610b	Cost savings (5)	Alteration to time horizons (5, 10, 20, and 40 yr) changed the degree of cost savings
Dapagliflozin	Nondiabetic kidney disease	United States	$4416	$60,000 (6)	Drug acquisition cost and baseline therapy cost have the biggest effect on cost-effectiveness Variation in cost of dapagliflozin could result in an ICER above a cost-effectiveness threshold of $100,000
Empagliflozin	Diabetic kidney disease	United States	$6360	$25,974 (7) (the cost of standard therapy was assumed to be $0, and thus, the ICER is likely conservative)	Drug acquisition cost and alternative time horizons were top contributors to cost-effectiveness
Dapagliflozin	Diabetic and nondiabetic kidney disease	United Kingdom, Germany, Spain	$665, $898, $477	$8280, $17,623, $35,503 (3)	Drug acquisition cost, background cost of CKD management, and discontinuation rate were top contributors to cost-effectiveness
Dapagliflozin	Diabetic and nondiabetic kidney disease	Thailand	$469	Cost saving (8)	Use in CKD 3b and 4 stages yielded a lower ICER, but the value was still below the accepted local threshold of $5169/QALY

ICER, incremental cost-effectiveness ratio; QALY, quality-adjusted life year.

^aApproximated from the monthly pricing used in the original papers.

^bConverted into US dollars at a rate of 1.28 US dollars per British pound on the basis of the average exchange rate reported in 2019.

As with other cost-effectiveness modeling studies, the results rely on the plausibility of the CKD progression model. Readers should recognize important limitations to this study. First, because the DAPA-CKD trial was stopped early (median follow-up of 2.4 years), the authors extrapolated lifetime outcomes from a short time period. Similarly, the authors do not have evidence on the efficacy of longer-term treatment with dapagliflozin. To test for this uncertainty, the authors conducted numerous sensitivity analyses and demonstrated that the drug remained cost effective even under shorter time frames of 10 years or less or if dapagliflozin was discontinued after 3 years (figure 3 and supplemental table 9 in McEwan et al. [3]). Finally, the authors’ results do not account for future innovations in the treatment of CKD or uncertainty in the future cost of SGLT2 inhibitors. The former would tend to reduce the cost-effectiveness of SGLT2 inhibitors, whereas the latter would tend to increase their cost-effectiveness. It is unclear which direction this uncertainty biases the authors’ results.

SGLT2 inhibitors have consistently demonstrated themselves to be cost effective in diabetic and nondiabetic CKD. Drug pricing seems particularly relevant, and lower drug costs could improve the cost-effectiveness of these therapies. This study provides a potential blueprint for how the United States could improve affordability of the SGLT2 inhibitors. The Inflation Reduction Act of 2022, signed into law recently by President Biden, grants Medicare an unprecedented ability to negotiate prescription drug pricing starting in 2026 (4). Although SGLT2 inhibitors are not immediately eligible for price negotiations, the law could set the stage for future policies that could make these high-value drugs more affordable and thus more cost effective. Still, even at their current price, these drugs remain a tremendous bargain for patients.

Disclosures

E. Lin receives consulting income from Acumen, LLC, a federal contractor; serves on the editorial boards of American Journal of Kidney Diseases, Kidney News, and Seminars in Dialysis; serves on the National Kidney Foundation Scientific Advisory Board; and serves on the Nephrology News and Issues Editorial Advisory Board. The remaining author has nothing to disclose.

Funding

E. Lin receives support from National Institute of Diabetes and Digestive and Kidney Diseases grant K08 DK118213 and from the University Kidney Research Organization.

Author Contributions

A. Khine and E. Lin wrote the original draft and reviewed and edited the manuscript.