Public scrutiny on healthcare costs, particularly drug costs, has been mounting over the past several years. Despite the validity or evidence supporting or naysaying the concerns about pricing and how drug costs fare versus other healthcare costs, public perception undoubtedly informs and creates reality. The perception that drug prices are increasing in countries such as Canada have fueled an interest in a National Pharmacare Program. As part of this momentum around unsustainable drug funding in the future, payer organizations have been trying to develop standard protocols on how drug “value” should be uniformly assessed to ensure consistency in evaluations, approvals, and reimbursement.

Why Value Frameworks Matter

Value frameworks are a double-edged sword. Although they will enable more unified decision making, they will inevitably result in “black and white” thinking around drug accessibility for certain patients. Alongside these value frameworks comes an entire lexicon of terms that also require careful consideration, not only on which ones apply, but how they should be defined. The consequences, of course, have serious impact on resource allocation and patient access, especially with the growing number of new entities in the rare disease and oncology space. The conversation is shifting from the volume of health services utilized to the “value” of health benefits that patients are accruing.

Value Framework Examples

Like many evaluations conducted by HTA countries, several U.S. organizations have developed value frameworks to inform decisions on patient care and formulary listings. Below is a summary of what has been established to date:

  1. ACC-AHA
    • Intended Audience: Patients and physicians
    • Scope: Cardiovascular treatments only and not just strictly drugs
    • Cost Effectiveness Measures: Health economic studies, literature reviews, and cost effectiveness (measured by ICERs)
  2. ASCO
    • Intended Audience: Patients and physicians
    • Scope: Oncology drugs (curable vs. advanced diseases)
    • Cost Effectiveness Measures: Clinical data, affordability thresholds based on patient willingness to pay, out-of-pocket expenses are considered
  3. DrugAbacus
    • Intended Audience: Patients, physicians, policy makers, and payers—online tool
    • Scope: Oncology drugs
    • Cost Effectiveness Measures: Medicare monthly costs included, no cost effectiveness analysis is completed
  4. ICER
    • Intended Audience: Payers and policy makers—negotiation tool between payers and pharma companies
    • Scope: Drugs selected for imminent FDA approval, projected budget impact, priority, and other factors
    • Cost Effectiveness Measures: Cost effectiveness (measured by ICERs), budget impact analysis, “health system value” analysis (long-term vs. short-term budget impacts)
  5. NCCN
    • Intended Audience: Patients and physicians
    • Scope: Oncology drugs
    • Cost Effectiveness Measures: Efficacy, affordability score determined by panel (consider drug cost and non-drug costs such as administration, supportive care, and hospitalization), affordability to patients is considered

Outside of the U.S., countries with HTA agencies (such as the NICE in the U.K., G-BA in Germany and CADTH in Canada) have been conducting detailed cost effectiveness evaluations for many years and have been fine tuning their value frameworks over this same period of time.

Value Framework Challenges

Several challenges are associated with the widespread creation and usage of these evaluation protocols such as being able to create consistency in methodology and outcomes. When different frameworks have been used to compare the value of a single drug entity for the same patient population using the same evidence base, results have differed. As a result, drug manufacturers have been faced with the increasing challenge of demonstrating value to multiple stakeholders who often are leveraging different drug valuation methodologies.

Questions in an Uncertain Future

With so many different frameworks to contend with, it is difficult to tell which ones will have the greatest influence on final decisions and whose interests are ultimately being served. Only time will tell if the U.S. will collaborate with other global agencies to develop more consistent methodologies. It also remains to be seen if the U.S. government will ultimately adopt or legislate one particular framework and if industry will buy-in on a large-scale basis or not.

Key Elements for the Ideal Value Framework

Several items need to be considered for value frameworks to work consistently and coherently. A few of key importance are:

  1. Evidence: Types and how will they be measured, weighed, and evaluated against other benchmarks.
  2. Patients: The patient voice needs to be addressed and adequately included in the overall assessment.
  3. Flexibility: Value can vary depending on extenuating circumstances so frameworks need to be fluid enough to incorporate other variables and parameters into the mix when required.
  4. Transparency: The full evaluation methodology, the criteria used, and the evidence reviewed needs to be publicly available and accessible for everyone to see and understand.
  5. Perspective: Cost effectiveness should be evaluated from multiple contexts and from a variety of interests such as the healthcare as well as the societal viewpoint, so that indirect benefits such as caregiver productivity and burden can be incorporated.
  6. Clear definitions: Lexicon and terms need to be clearly defined and explained (i.e., budget impact vs. value assessment).

Value Framework Concerns and Issues

The National Pharmaceutical Council has developed a “Guiding Practices for Patient-Centered Value Assessments” document. Based on this document as well as the Lewin Group’s “Comparison of Value Assessment Frameworks Using the National Pharmaceutical’s Council’s Guiding Practices for Patient-Centered Value Assessment” white paper, several concerns and issues have been raised about the current protocols for valuation. In order for value frameworks to a) promote value in patient care and outcomes; b) include all benefits that are important to patients; c) be developed with a holistic, system-wide perspective; and d) be clear and unambiguous, the following principles should be incorporated:

  1. Assessment Process:
    • Involve stakeholders throughout the process
    • Allow for public comment periods
    • Update assessments regularly to keep pace with innovation
  2. Methodology:
    • Focus assessments on all aspects of the healthcare system
    • Use established methods and transparent models and assumptions
    • Acknowledge uncertainty in input factors by reporting ranges around estimates
  3. Benefits:
    • Include a broad array of factors that matter to patients and society
    • Consider individual treatment effects
    • View the benefits of a treatment over a long-term horizon
  4. Costs:
    • Consider all healthcare costs and offsets over time
    • Ensure costs are accurate and relevant to the user of the framework
  5. Evidence:
    • Use all the sound, high-quality evidence that is currently available
    • Gather and synthesize in a transparent and robust manner, used accepted practices
  6. Dissemination and Utilization:
    • Label assessments clearly for their intended use
    • Make assessments easy for users to interpret
    • Disseminate publicly only after assessments have been finalized
  7. Budget Impact:
    • Agree that impact assessments measure resource use and not value
    • Assess all aspects of care (such as hospitalization or doctor visits) and not just medications
    • Keep budget impact and value assessments separate
    • Consider a longer time horizon that includes all costs and cost offsets
    • Acknowledge uncertainty in input factors by reporting ranges and estimates

Manufacturer’s Stepping Up to the Challenge

In this emerging environment, pharma manufacturers will be expected to continually demonstrate their drug’s value and to price their products accordingly. The challenge is that manufacturers must cater their drug development and value propositions to several different organizations and stakeholders.

The growth of value frameworks in the U.S. has been fueled by high-priced innovative medicines especially in the rare diseases and oncology space. It is inevitable that these frameworks are going to get more robust and established over time as payers and policy makers start to include them in their regular assessment protocols and eventually look to legislate them.

Ultimately, value frameworks are not going away but will, in fact, become a common element in the healthcare ecosystem. Manufacturers need to be proactive in their approach, leveraging the brain power of their customers and trusted advisers, to help navigate the system in order to optimize their drug development process and expedite access for their products.

  • Natalie Yeadon

    Natalie Yeadon is the Co-Owner and Managing Director for Impetus Digital. Her company specializes in virtual advisory boards and working committees and enrolls physicians, allied healthcare providers, payers, and patients in a series of online touchpoint activities over a course of time through their online platform. Natalie brings more than 18 years’ experience from working in a variety of pharmaceutical sales, marketing, and early brand commercialization management roles in Canada and the U.S., in several different therapeutic areas.


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