Opinion

Value Frameworks Are Expanding For Drugs & Devices

 

There’s no question many cancer drugs and specialty pharmaceuticals are expensive, and their benefits often vary from patient to patient. Several years ago, a number of non-government organizations (NGOs) began launching “value frameworks” to help patients and payers decipher which drugs and devices may be most beneficial – and to provide guidance on appropriate market prices.

There are over a half dozen U.S. value assessment frameworks including the Institute for Clinical and Economic Review (ICER); American Society of Clinical Oncology (ASCO); Memorial Sloan Kettering Cancer Center’s DrugAbacus; the National Comprehensive Cancer Network (NCCN); and a collaboration between the American College of Cardiology and the American Heart Association (ACC-AHA).

According to the National Pharmaceutical Council, these frameworks reflect the interest and expertise of the organizations developing them.  ACC-AHA, ASCO, and NCCN are designed by professional societies to assist with shared-decision making between patients and physicians. ICER and Drug Abacus have more of a payer focus. ASCO, NCCN and Drug Abacus all have an oncology focus and ACC-AHA is focused on cardiology.

While the federal government doesn’t oversee the frameworks themselves, they fit within the Obama administration’s vision for the future of health reform.  Health and Human Services Secretary Sylvia Burwell has stated that over 50 percent of payments in the Medicare program will be value based by 2018.

Among value frameworks, ICER is perhaps most influential in 2016 – and most feared among drug and device companies. The controversial CMS Part B drug demonstration includes value-based pricing strategies in Phase 2 that depend on a recognized value framework such as ICER.  Thus far ICER has mostly looked at the low-hanging fruit – high cost specialty pharmaceutical therapies – but it’s unlikely to stop there. ICER has already reviewed St. Jude’s CardioMEMS and devices for obesity management.  An expansion of medical device assessments could be next.

ICER is funded by several sources but largely by the Laura & John Arnold Foundation. The group has no limitations on the types of treatments that can be assessed.

Anecdotally, we know that health insurance plans selectively use ICER findings when it helps them with negotiations (e.g., Hepatitis C). However, ICER’s assessments are being used inconsistently. For instance, payers continue to place restrictions on Novartis’ Entresto despite ICER concluding that the heart failure medication is priced appropriately.

New value frameworks are being developed – such as FasterCures – that take into account the patient perspective are being developed and may hold promise.  Many of the current frameworks do not include all the benefits that are important to patients such as quality of life, work productivity, caregiver burden, unmet need and burden of illness.

Value remains a difficult target.  For one, “value” is often defined differently by patients and payers — and even between patients. Frameworks also focus on list prices for drugs and devices, but that is rarely the price paid by the payer or patient.

With drug pricing practices under a microscope by Congress, state governments and even the Presidential candidates, the issue of “value” is very likely to remain in the headlines. As frameworks are refined over time, they may become a useful tool that payers, PBMs and patients utilize for optimal outcomes at a reasonable price. And that means the medical device and pharmaceutical industries need to accept them in the new playing field.