Purpose: Fosamax (alendronate, Merck, NJ) is slated to lose patent protection in the U.S. in 2008. Loss of patent protection in Canada in 2005 has resulted in approximately a 40% price reduction in its retail price and the U.S. FDA has reported that drug prices typically drop more than 60% when multiple generic entrants come to market. While the cost-effectiveness of alendronate in women with severe osteoporosis (prior vertebral fracture and femoral bone density T-score of ≤-2.5) or osteoporosis (no prior fracture and T-score of ≤-2.5) is comparable to other interventions accepted as cost-effective, alendronate is not considered cost-effective in women with osteopenia (no prior fracture and T-score of -1.0 to -2.5). We evaluated the effect of price reduction on the cost-effectiveness of alendronate in post-menopausal women with severe osteoporosis, osteoporosis, and osteopenia.

Methods: We developed a Monte Carlo microsimulation to evaluate the cost-effectiveness of five years of alendronate therapy compared to usual care (vitamin D/calcium) in a hypothetical population of treatment-naïve post-menopausal Caucasian women with severe osteoporosis (T-score, -2.5), osteoporosis (T-score -2.5), and osteopenia (T-score -2.0). We evaluated the cost-effectiveness of alendronate at 100%, 80%, 60%, 40%, and 20% of its 2003 U.S. average wholesale price (AWP, $894). We employed a lifetime horizon and used data from the Study of Osteoporotic Fractures and studies evaluating the efficacy of alendronate in women with low bone density. The main outcome measure was cost per quality-adjusted life-year (QALY).

Results: The incremental cost-effectiveness ratio of alendronate therapy compared to usual care in a 65-year old woman with severe osteoporosis, osteoporosis, and osteopenia is $17,700, $47,000, and $126,100 per QALY, respectively. With a 40% price reduction in its AWP, alendronate therapy costs $72,200 per QALY compared to usual care in osteopenic women; with a 60% price reduction, this cost drops to $45,400 per QALY. Alendronate is cost-saving compared to usual care at approximately 60% of its AWP in women with severe osteoporosis, and 20% of its AWP in women with osteoporosis.

Conclusions: Expected price reductions from loss of patent protection will improve the cost-effectiveness of alendronate therapy and may make it cost-saving in women with severe osteoporosis and osteoporosis. Whether generic alendronate becomes a cost-effective therapy in osteopenic women will depend on the extent of future price reductions.