Drug Value Assessment Here to Stay

Despite notable differences and deficiencies in the several frameworks for assessing the value of prescription drugs that have emerged in recent months, these initiatives are expected to have a major impact on drug use and reimbursement, and even on decisions related to developing new therapies. While there is considerable debate over what “value” means and how to assess it, the frameworks developed by medical societies, providers, and payers respond to real needs in the nation’s healthcare system and are not going away.

These conclusions emerged from a comparison of five prominent value assessment frameworks developed by the American College of Cardiology and the American Heart Association (ACC-AHA), the American Society of Clinical Oncology (ASCO), the Institute for Clinical and Economic Review (ICER), Memorial Sloan Kettering Cancer Center, and the National Comprehensive Cancer Network (NCCN). They all come to varying conclusions on the value of certain therapies due to differences in methodology for calculating benefits and costs, in the evidence assessed, and in consideration of patient viewpoints. So it’s not surprising that the different frameworks present varying results and recommendations to clinicians and health plans, according to experts participating in a conference on assessing pharmaceutical value organized by the National Pharmaceutical Council last week.

While pharma companies are leery of how value assessments will be used, particularly ICER’s calculation of drug prices that reflect value and their impact on overall healthcare spending, framework developers are working to improve and clarify this evolving process. Transparency is key to achieving more credible assessment reports, as is greater involvement of patients in identifying key values and measures. The assessment groups all seek greater clarification of intended audiences (clinicians vs. payers) and appropriate types of interventions to assess.

Amgen Senior Vice-President Josh Ofman agreed that drug prices should be aligned with value, but questioned what value to measure. Even some high-priced drugs “are of good value” to certain patients, Ofman commented, and setting budget caps on treatment is “exactly the opposite” of what should be the goal. Michael Sherman, senior vice-president and chief medical officer of Harvard Pilgrim Health Care, described the enormous pressure he feels to keep down premiums and copays, a process hindered by rising outlays for prescription drugs. He and other payers are eyeing pay-for-value deals with pharma companies, but such efforts require clearer definition of value and methods to ensure that a high-value drug is used appropriately. He suggested a value-based coverage approach that involves the health plan covering expanded indications of a drug only if the patient responds, but noted that no pharma company “has yet taken us up on that idea.”

Biopharma companies should examine how clinical trials in development programs can generate the evidence needed to support a value proposition, advised Cliff Goodman, senior vice-president of the Lewin Group. Innovators should look at how they design clinical trials, choose patient populations, and generate needed evidence. Data from an early trial indicating that a treatment will be very costly and have limited use may prompt a sponsor to think twice about continuing that research program.

Demand for drug assessment frameworks is growing, concluded NPC Executive Vice-President Bobby Dubois, noting that the five frameworks examined by NPC are operational and already in use.

Organizations like Harvard Pilgrim “want this stuff,” observed Goodman. He acknowledged that the impact of pharmaceutical costs on overall healthcare spending matters to stakeholders, but advised against conflating value assessment with budget impact. Current frameworks are imperfect, but their developers already are looking to improve methods and standards based on stakeholder feedback and to extend value assessments to diagnostics and medical products. A broader Initiative on US Value Assessment Frameworks organized by the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) may address these issues further.

Meanwhile, ICER issued a report the same day as the NPC conference that challenged too-high prices for leading new treatments for non-small cell lung cancer. Despite positive clinical results for TKI and PD-1 agents, the assessment called for deep discounts on list prices to reflect limited gains in extended life. ICER is also accepting comments on a draft report on the value of targeted immunomodulators for treating psoriasis, which it will discuss at a Nov. 18, 2016 public meeting in Boston. The patient community is concerned that such assessments may limit access to potentially important therapies, and biopharma companies are anxious that biased and ill-conceived value assessments may deter innovation.