Oral semaglutide, which has undergone multiple phase 3 clinical trials, represents the first oral biologic medication for type 2 diabetes in the form of a daily capsule. It provides similar efficacy compared with its weekly injection counterpart, but it demands a dose on the order of 100× as high and requires more frequent administration.
We perform a cost effectiveness analysis using a first and second order Monte Carlo simulation to estimate quality-adjusted life expectancies associated with an oral daily capsule, oral weekly capsule, daily injection, and weekly injection of semaglutide.
We conclude that the additional costs incurred to produce extra semaglutide for the oral formulation are cost effective, given the greater quality of life experienced when taking a capsule over a weekly injection.
We also demonstrate that the potency of semaglutide allows the formulation to be cost effective, and less potent drugs will require increased oral bioavailability to make a cost effective oral formulation.
…It was possible to estimate the potential costs of the active pharmaceutical ingredient required for the oral capsules and subcutaneous injections based the doses required for each method to achieve comparable health outcomes. The subcutaneous injection of semaglutide is dosed at 0.51 mg per week. At a cost of $100/gram, this amounted to a cost of $2.60–$5.20 per year. The oral version of semaglutide required a dose of 21–40 mg per day to replicate the HbA1c effects of the respective injected doses 15. Therefore, the oral formulation used ~280× the amount of active pharmaceutical ingredient (API). It costs $770–$1,460 per year to produce the necessary API for the oral dosage form. Phase 3 clinical trials for oral semaglutide only tested 14 mg doses of oral semaglutide. Although they did not show comparable effects to the subcutaneous injections, they still demonstrated positive health outcomes. It costs $510 per year to produce the necessary API for this dose size. Figure 3c shows the lifetime costs associated with the prescription of each formulation and Figure 3d details the probability of cost effectiveness for each formulation strategy at varying willingness-to-pay thresholds. Because the cost to produce semaglutide might change as the process is scaled up to produce additional drug, or our estimation of the cost may be incorrect, we performed a sensitivity analysis around this value. Supplementary Figure S2 shows the relative cost of producing the active pharmaceutical ingredient semaglutide compared to the annual drug cost for patients and insurers for drug production costs ranging from $1–$100/g.
With the additional expense, the oral semaglutide costs $10,000 more in raw materials over the course of a lifetime when comparing daily dosed pills to weekly injections (taking into account adherence, drop-outs, and discount rates). Still, the QALYs gained from a pill allowed the oral formulation to provide greater QALYs at a lower cost-effectiveness ratio. Both the daily and weekly oral dosage forms were cost-effective in 50% of cases at a cost-effectiveness ratio of $85,000 per QALY. A cost-effectiveness table provides the incremental cost-effectiveness ratios (ICER) (Table 2). This compares to a cost effectiveness ratio of $110,000 per QALY gained for a weekly semaglutide injection. Changing the raw material drug cost to $50/g lowered the cost-effectiveness ratio of an oral pill by $5,000 per QALY.