Value Assessments
Put Research to Work for Patients, Not Government Bureaucrats
PhRMA supports the use of sound evidence to guide health care decisions, and we’re committed to developing tools to help patients, physicians and others make informed decisions. For too long, however, conventional approaches to evaluating evidence (value assessment or health technology assessment) have served the needs of government officials and health insurance companies instead of patients and consumers.
PhRMA is supporting work to develop better value assessment tools that are more transparent, support doctor-patient decision-making and consider value across the full spectrum of patient care. We’re also working to ensure that value assessments are not misused by government health agencies to impose patient access barriers and delays in care.
Overview
Avoiding Government Misuse of Health Technology Assessments
Concerns over rising health care costs have led some to call for government price setting for medicines. Some of these flawed ideas include government use of health technology assessments to make important decisions about the value of a treatment and whether patients should have access to an innovative medicine.
We only need to look abroad to see how the story ends when the government makes rigid judgments of clinical benefit to set prices for medicines. For instance, in Germany, just 61% of all new medicines are available. As we move toward a value-driven health care system, we should avoid one-size-fits-all policies that ignore patient differences and equity considerations and create significant access barriers.
Avoiding Government Misuse
Collaborating on Better Approaches to Value
Value assessments should include all the outcomes that matter to patients and families and recognize differences in patient needs and clinical circumstances, including those in disadvantaged and minority communities. Conventional approaches to value assessment rely on flawed standards such as cost-effectiveness analysis (CEA) and quality-adjusted life years (QALYs) that obscure differences in patients’ needs and ignore important elements of value that matter to patients and society. For example, certain treatments provide ALS patients an improved quality of life by protecting their ability to swallow, but QALY-based assessments don’t recognize the value of important improvements like this. Outcomes that matter to patients should matter to everyone.
Value assessments must never discriminate against the elderly, people with disability or individuals in disadvantaged or minority populations with unique health needs. Conventional, QALY-based assessments frequently discriminate against vulnerable patient groups, including the elderly, people with disabilities and individuals in disadvantaged or minority populations. According to The American Association of People with Disabilities, “the U.S. established that QALYs discriminate by devaluing disabled lives as far back as 1992.” Unfortunately, we’ve made far too little progress since then in moving beyond QALY-based assessments. QALYs discriminate against these patients by assigning a lower numerical value to their life. And health technology assessments rarely account for patient differences, especially those faced in minority populations. According to Tufts Medical Center, fewer than 5% of HTAs include results by race or ethnicity. When insurers and other payers rely on these flawed models to set coverage policy, it can have dire consequences for patients.
Value assessment should span all of health care across the patient journey, not just medicines. Medicines represent just 10% of U.S. health care expenditures, but over 40% of all value assessments. As we look at how to build a more resilient, affordable and equitable health care system and as we look to solutions for keeping Americans healthy and reducing waste without hurting patient care, it will be vital to generate better evidence of value on the full spectrum of health care services, as well as non-health interventions to address the root cause of disease.
Collaborating on Better Approaches to Value
Related Resources
New analysis: Flawed assessments of a medicine’s value jeopardize patient access
Under the Inflation Reduction Act, government bureaucrats will unilaterally decide how much a treatment selected for price setting is worth. To make matters worse, the price setting process is a black box. No one knows how exactly the government is determining the value of medicines selected for price setting or how much input it will use from patients, providers and other stakeholders — but, alarmingly, we do know they expressed significant interest in using flawed cost-effectiveness metrics. In the 2023 final guidance for the first year of the price setting process, CMS stated that it: “…will review and consider cost-effectiveness measures and studies that use such measures for initial price applicability year 2026.”
Concerningly, one organization eager to weigh in is the Institute for Clinical and Economic Review (ICER). The group holds itself out as an expert in assessing the value of medicines despite relying on outdated and discriminatory cost-effectiveness metrics. And, as patient advocates and others have warned, ICER’s one-size-fits-all approach that ignores the unique needs of different patient populations can lead to discriminatory outcomes. Government adoption of flawed value assessments like these could be devastating for patients.
A recent analysis by Cencora (formerly Xcenda) looked at treatment options for five serious, complex medical conditions that are covered by Medicare Part B and have been evaluated by ICER. Cencora considered what would happen if the government adopted ICER’s value assessments as the basis for its coverage decisions. The results were startling:
- In 2020, nearly 185,000 Medicare Part B beneficiaries with multiple myeloma, asthma, multiple sclerosis, non-small cell lung cancer and rheumatoid arthritis used a physician-administered product evaluated by ICER.
- If the government adopted an ICER-based formulary for the Part B program, 63% of these Part B beneficiaries, or nearly 117,000 individuals, could lose access to their current treatment.
- The results were even worse for certain diseases, including 99% of Part B patients with multiple sclerosis losing access to their preferred treatment, 85% of Part B patients with non-small cell lung cancer and 83% of those with multiple myeloma.
“If the government used ICER-like assessments to set prices for medicines, many patients could lose access to the treatments that they and their physicians had previously determined were best for them based on individual needs and preferences, after careful consideration of the nuances of a patient’s condition,” explained Cencora.
Government shouldn’t interfere in decisions best left to patients and their doctors. The Inflation Reduction Act already threatens seniors’ access to care. Injecting ICER’s flawed value assessments to an already flawed government decision making about drug payment could further jeopardize patients’ ability to get the lifesaving treatments they need.
Nicole Longo
New analysis: Flawed assessments of a medicine’s value jeopardize patient access
Robust Evidence Synthesis To Support Transparent Medicare Drug Price Negotiation
Robust Evidence Synthesis To Support Transparent Medicare Drug Price Negotiation