The primary intent of this model-based budget impact analysis was to engage healthcare decision makers and hospital formulary stakeholders in cost-based discussions regarding substitution of existing treatment options for acute bacterial skin and skin structure infections (ABSSSI) with an intravenous (IV)‑to‑oral antibiotic such as omadacycline. ABSSSI is defined as skin lesions with a minimum surface area of 75 cm2 and may include cellulitis/erysipelas, wound infection, and major cutaneous abscess.1 Most patients with ABSSSI present to the emergency department (ED) for their care and treatment is typically empiric.1,2 Vancomycin is the most commonly prescribed antibiotic for hospitalized patients with ABSSSI, and it is often used in combination with an antibiotic with gram-negative activity such as piperacillin‑tazobactam, imipenem/meropenem, or ceftriaxone.2,3
Although mortality among patients with ABSSSI is relatively low, ABSSSI is a significant burden on the healthcare system. In the United States, skin and subcutaneous tissue infections were considered the fifth most frequent medical diagnosis for an ED visit in 2014 (3.3 million visits), which represented a 10% increase in skin infection diagnoses from 2006.4 Hospitalization rates due to skin and subcutaneous tissue infections almost doubled between 1997 and 2011.5 The average length of stay (LOS) in the hospital for adults with skin and skin structure infections per admission between 2005 and 2011 was approximately 5 days,6 and the mean cost of treating hospitalized patients with ABSSSI with vancomycin ranged from approximately $6000 to $10,000 per admission in a recent large hospital claims analysis (see Appendix).
Omadacycline is an aminomethylcycline and is approved in the United States for the treatment of adults with ABSSSI.7,8 Omadacycline is active in vitro against both gram‑positive bacteria (including methicillin‑resistant Staphylococcus aureus) and gram‑negative ABSSSI microorganisms.7 Omadacycline has been shown to be noninferior to linezolid for patients with ABSSSI in 2 registration clinical trials, Omadacycline in Acute Skin and Skin Structure Infections Study (OASIS, NCT02378480), an IV‑to‑oral switch trial, and OASIS-2 (NCT02877927), an oral‑only trial with treatment initiated in the outpatient setting.9,10
A budget impact analysis has not yet been conducted for omadacycline for the treatment of patients with ABSSSI. The primary objective of the current model-based study was to estimate the annual budget impact of introducing omadacycline for the treatment of patients with ABSSSI who present to the ED for their care relative to currently used treatments from the hospital perspective (Medicare payer). Although omadacycline has only been compared with linezolid in phase 3 clinical trials, the antibiotics currently used in the treatment of patients with ABSSSI were included in this budget impact model (BIM). A network meta-analysis has found no differences in the treatment success rates of any of the products used in the current analysis.11
A secondary objective of this study was to examine the potential economic impact of shifting inpatient care to the outpatient setting with omadacycline IV‑to‑oral therapy. Data suggest that using an antibiotic such as omadacycline that has both IV and oral formulations may avoid hospitalization or reduce hospital LOS when patients need to be hospitalized.9,10 Based on this hypothesis, the model explored various hypothetical scenarios to test the potential cost impact of these premises (ie, hospital avoidance, hospital LOS reduction) among hospitalized patients with omadacycline IV‑to‑oral therapy relative to the current inpatient standard of care. There are no actual data to support these scenarios for omadacycline at this time, and cost impact was not evaluated in the omadacycline clinical trials.12
A BIM was developed in Microsoft Excel® 2010 following the International Society for Pharmacoeconomic Outcomes and Research guidance on good modeling practices.13 This BIM was developed to estimate the budgetary impact of the introduction of omadacycline for treatment of ABSSSI among patients who present to the ED for their care and to make cost projections regarding replacement of currently used therapies with omadacycline in eligible patients over 3 years.
Budget Impact Model Structure
The BIM considered the hospital perspective for a theoretical cohort of 1 million covered Medicare members in the United States for the base‑case analyses. The treatment pathways in the BIM considered the introduction of omadacycline as a treatment for patients with ABSSSI who present to the ED for their care from the hospital perspective (Medicare payer) relative to currently used treatments. As part of the hospital perspective, the ED and observational units were assumed to be hospital-owned. The populations chosen for the base‑case analyses were consistent with those from the OASIS studies9,10 and real‑world analyses (see Appendix). The BIM model structure for omadacycline is closely aligned with BIMs used for other agents in the treatment of ABSSSI.14-16
Budget Impact Model Population Settings
The base‑case BIM population settings for patients with ABSSSI are shown in Table 1. The base‑case analysis assumed that the rate of ED visits for ABSSSI per year was 2.3% for a population of 1 million (23,000 patients).17 Of the 23,000 hypothetical patients who presented to the ED, 20% received care in the observation unit. In total, 42.2% were assumed to be admitted from either the ED or observation unit (9706 patients).
Market Share Assumptions
Final market share assumptions are shown in Supplementary Table 1. Market share for the United States was estimated without omadacycline (but included its comparators) and with omadacycline and its comparators. Market share for the analyses was based on a real‑world analysis of the Arlington Medical Resources database for the analysis without omadacycline. Details of this database and analysis can be found in the Appendix. For the analysis with omadacycline, the market share uptake was assumed to be 0.05% in year 1, 0.18% in year 2, and 0.40% in year 3 (assumption).
Clinical Inputs and Assumptions
Base‑case treatment response rates and treatment discontinuations due to adverse events (AEs) are shown in Table 2.15,18-23 Successful treatment response was defined as the total number of patients receiving treatment minus the total number of patients who had therapy discontinued due to treatment failure (ie, lack of efficacy) or to AEs. Treatment failure was defined as the proportion of patients who discontinued treatment due to lack of efficacy. The base‑case assumption was that all comparators, including omadacycline, had equal treatment responses (ie, efficacy) based on the results of historical noninferiority clinical trials for all comparators in the model (all recent comparative registration trials for antibiotics have been designed in conjunction with the US Food and Drug Administration [FDA] to assess noninferiority with currently approved agents).9,10 The incidence of AEs leading to discontinuation for antibiotics included in the model were obtained from phase 3 skin infection clinical trials, when possible.
The average times in the ED and observation unit were 0.29 and 0.71 days, respectively. The total hospitalization duration was 5 inpatient days for patients who were treatment successes. Based on the FDA guidelines for ABSSSI, the time to treatment failure due to lack of efficacy (1 minus the success rate) was set at 3 days.1 After treatment failure due to lack of efficacy, a cost of 5 additional inpatient days (8 total inpatient days) was applied (assumption). For AEs that led to treatment discontinuation, it was assumed that time to treatment discontinuation was 2 days. Following treatment discontinuation due to AEs, a cost of 6 inpatient days (8 total inpatient days) was applied (assumption). Day 2 of therapy was selected as the day of treatment discontinuation, because most AEs occur early during the course of therapy.24-27 Whereas we could have selected a later day during the course of therapy for AEs leading to discontinuation, we conservatively selected day 2 as the discontinuation day for AEs as a measure to have identical total hospital LOS (8 days) for treatment discontinuations due to lack of efficacy and AEs.
Cost Inputs and Assumptions
Base‑case analyses incorporated a hospital perspective over a 3‑year time horizon. The costs for all hypothetical patients who presented to the ED were included in the calculations (ED and observational units were assumed to be hospital-owned). ED, observation, and inpatient hospitalization costs were based on an analysis of the Vizient® database (see Appendix) and are shown in Supplementary Table 2. Treatment acquisition costs are shown in Supplementary Table 3. Wholesale acquisition costs for comparator treatments were obtained from Medi‑Span Price Rx®28 and costs were estimated in 2017 US dollars. Costs for omadacycline were provided by Paratek Pharmaceuticals, Inc. The cost of administration, monitoring, and other medical costs were not considered separately and were assumed to be included in site of care (ie, ED, observation, inpatient hospital) costs. Only daily hospital costs were considered for the excess hospital LOS associated with treatment discontinuation due to lack of efficacy or AEs. Additional treatment acquisition costs were not included for patients who had therapy discontinued due to treatment failure or an AE and were assumed to be part of daily hospital costs.
Model Analyses and Outputs
Model outputs for scenarios with and without omadacycline included:
Total and disaggregated costs by category
- Categorized by location as ED, inpatient, outpatient, or observation
Treatment acquisition cost
- ED, inpatient, outpatient, or observation
Total and incremental budget impact per year, presented as:
- Total per year
- Cumulative over the entire time horizon
- Cost per member
- Cost per member per month
- Cost per member treated (cost per case)
- Cost per member treated (cost per case) per month.
Sensitivity and Scenario Analyses
One-way deterministic sensitivity analyses were performed to evaluate the impact of uncertainty of key input variables on outcomes. Two scenario analyses were also conducted. The first scenario analysis evaluated the potential economic impact of outpatient treatment of ABSSSI with IV‑to‑oral omadacycline versus inpatient standard‑of‑care treatment. The second scenario analysis examined potential reductions in hospital LOS (1- and 2-day LOS reductions) associated with IV-to-oral omadacycline relative to current inpatient standard of care. Of note, no actual LOS data are available for omadacycline at this time, and this is based on the hypothesis that IV/oral antibiotics can reduce inpatient LOS. All other base‑case settings were applied to the scenario analyses.
Distribution of the hypothetical study population by inpatient treatment, treatment success, treatment failure due to lack of efficacy, and treatment discontinuation due to an AE is shown in Table 3. Results of the base-case BIM analyses are provided in Table 4A. In the base case, the total cost for treatment of ABSSSI was $77,724,335 for each of the 3 years (scenario without omadacycline). In the scenario with omadacycline, the total cost for treatment ranged from $77,735,503 in year 1 to $77,813,112 in year 3. The total incremental cost for treatment of ABSSSI with omadacycline was $11,168, $39,918, and $88,777 in years 1, 2, and 3, respectively. The incremental costs each year with omadacycline were largely a result of increased drug acquisition costs in the ED and inpatient settings. The incremental cost per member treated (cost per case) rose by $0.49, $1.74, and $3.86 over 3 years.
Treatment with Omadacycline, Sensitivity Analyses
The tornado plot in the Figure presents deterministic sensitivity analyses for the treatment of ABSSSI. The variable that affected the cumulative budget impact to the greatest extent was hospital LOS with omadacycline. Success rate and cost of omadacycline had the second and third greatest effects on cumulative costs. The success rates of other non-omadacycline antibiotics, when viewed in aggregate, also affected the cumulative budget impact in the deterministic sensitivity analyses.
Results of the scenario analyses are shown in Table 4B, Table 4C, and Table 4D. Reducing hospital LOS by 1 day among hospitalized patients with omadacycline resulted in incremental costs of $4311, $15,231, and $33,919 in years 1, 2, and 3, respectively. Under the assumption that patients may be discharged sooner when an oral formulation of the same drug with which they are being treated is available, reducing hospital LOS by 2 days reduced costs by $2546, $9455, and $20,939 in years 1, 2, and 3, respectively. Shifting inpatient care to the outpatient setting with omadacycline reduced costs by $38,777, $139,885, and $310,784 in years 1, 2, and 3, respectively.
The primary intent of this model-based budget impact analysis was to engage healthcare decision makers and hospital formulary stakeholders in cost-based discussions regarding substitution of existing treatment options for ABSSSI with an IV‑to‑oral antibiotic such as omadacycline. In infectious diseases, there is heightened awareness for the treatment of syndromes and pathogens that are associated with high mortality. Although this makes sense from a public health perspective, there is a tendency to overlook infections such as ABSSSI that are a considerable burden on the US healthcare system, which are mostly attributed to expenditures associated with hospitalization costs.6
The results of the base‑case analyses in the current BIM demonstrated that the introduction of omadacycline as a treatment option for ABSSSI resulted in modest increases in total and cumulative incremental costs over a 3-year period. Not surprisingly, the main sources of the cost increase for treatment with omadacycline upon its introduction into the market were drug acquisition costs in the ED and inpatient settings. The BIM was specifically designed with a highly conservative set of assumptions in the base‑case analysis; hospital LOS, efficacy, and admission rates were the same between current standard of care and omadacycline. In the one-way sensitivity analyses, the parameters that most influenced cost included hospital LOS with omadacycline, success rate of treatment with omadacycline, cost of omadacycline, and success rate of comparator treatments when viewed in aggregate. Combined, the findings from the sensitivity analyses suggest that alterations of these inputs will alter the incremental budget associated with omadacycline. For now, the results of the base‑case analyses should be considered a conservative estimate of the potential impact of adding omadacycline to a formulary in substitution for other therapies. The budgetary impact of adding omadacycline to a formulary should be revisited as more real-world comparator data become available.
It is well-established that patients with ABSSSI are often admitted to the hospital for the sole purpose of receiving IV antibiotics.29 One potential solution for reducing healthcare costs is the increased use of antibiotics with therapeutically equivalent IV and oral formulations such as omadacycline that cover common causative pathogens of ABSSSI. Studies in several disease states, including ABSSSI, have shown that transitioning from IV to oral antibiotics can reduce hospitalization LOS or avoid hospitalization entirely, compared with antibiotics such as vancomycin, which can only be administered as an IV infusion.18,30-34
Given that IV‑to‑oral antibiotics have been shown to reduce hospital LOS and avoid hospitalizations, 3 scenario analyses were conducted in the current model.30-32 In one scenario, cost-savings were realized with outpatient treatment of ABSSSI with omadacycline versus inpatient treatment with vancomycin. This finding was not surprising given that treatment of ABSSSI in the inpatient setting has been associated with up to 4-fold higher costs than treatment in the outpatient setting.35 In the other scenarios, omadacycline facilitated an earlier hospital discharge by 1 to 2 days compared with current standard-of-care inpatient therapies. In the hospital LOS reduction scenario analyses, 1-day shorter hospital LOS with omadacycline reduced the incremental yearly costs by over 50% relative to the base case (no LOS reduction), whereas a 2-day hospital LOS reduction with omadacycline resulted in yearly cost-savings.
Several things should be noted when interpreting the findings. The structure and results of this BIM are consistent with those of other published BIMs that have evaluated the economic impact of antibiotics administered to patients with ABSSSI.14-16,36 Because of the nature of BIM analyses, interpretation of the results of this analysis may be limited by assumptions made within the BIM. First, several assumptions had to be made to inform the BIM structure, inputs, and associated costs. When possible, published data were used to inform the BIM. However, many required inputs and associated costs were not available in the literature. Considering this, we conducted analyses with 2 different healthcare databases (Vizient and Arlington) to generate the data necessary for the BIM (see Appendix). In certain cases, assumptions had to be made because of lack of data. As data are published on the assumption-based inputs, the BIM should be revisited. Second, the market share of comparator antimicrobial agents was assumed to be reduced following the introduction of omadacycline as a treatment option for ABSSSI. The actual projected estimates of omadacycline market share are unknown and may affect overall model results. Third, the conservative assumption was made in this BIM that the clinical efficacy of comparators was equivalent to that of omadacycline.11 Regarding clinical efficacy, as additional comparative data with omadacycline become available, this assumption will need to be re-evaluated. Finally, future analyses that evaluate the budget impact of omadacycline for the treatment of ABSSSI could incorporate additional input parameters that were not included in the current model. For example, the incorporation of data that link success rates with hospital LOS and readmission rates would be a meaningful contribution to the model. In addition, a network meta‑analysis or real-world evidence study could uncover differences in antibiotic effectiveness rates.
Based on the BIM structure and assumptions, this analysis determined that adding omadacycline as a treatment option in addition to existing treatments would result in a modest increase in total cost over 3 years when this is the choice of the clinician for the treatment of ABSSSI, assuming no reduction in hospitalization LOS. Additional studies are required to further evaluate the clinical benefit of omadacycline to strengthen the findings of this BIM. Therapeutically equivalent antibiotics that are available as both IV and oral formulations such as omadacycline may enable an earlier transition to oral therapy and earlier discharge from the hospital in certain eligible patients (eg, those who do not have comorbidities or symptoms of systemic infections). In the hospital LOS reduction scenario analyses, 1-day shorter hospital LOS with omadacycline reduced the incremental yearly costs by more than 50% relative to the base case (no LOS reduction), whereas a 2-day hospital LOS reduction with omadacycline resulted in yearly cost-savings. Therefore, these additional scenarios should be considered by formularies despite the projected budgetary increase when drawing comparisons to currently prescribed treatment options.
The authors would like to thank Paul McGovern (Paratek Pharmaceuticals, King of Prussia, PA) for editorial and medical expert review, and Kim Poinsett‑Holmes, PharmD (Evidera, Bethesda, MD), for medical writing/editorial assistance and literature research during the development of the manuscript. The authors would also like to thank Robert Adamson, PharmD, FASHP, for his thoughtful contributions and perspectives during the development of this manuscript.
Paratek Pharmaceuticals, Inc commissioned PARAXEL Access to develop the model.
The data sets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.
Paratek Pharmaceuticals, Inc.
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King of Prussia, PA 19406
Author Disclosure Statement
Dr LaPensee is an employee of Paratek Pharmaceuticals, Inc; Mr Mistry has received consulting payments from Paratek Pharmaceuticals, Inc; Dr Lodise has received consulting payments from Paratek Pharmaceuticals Inc.
Dr LaPensee is Director, Health Economics and Outcomes Research, Paratek Pharmaceuticals, Inc, King of Prussia, PA; Mr Mistry is Senior Associate, Health Economics, PAREXEL Access Consulting, PAREXEL International, London, UK; Dr Lodise is Professor, Albany College of Pharmacy and Health Sciences, NY.
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