Article2018-02-06T17:27:34+00:00

Restricting access based upon ICER estimates: value should not be one-size-fits-all

By: Jason Shafrin, PhD Sr. Director, Policy and Economics and Jacki Chou, MPL Senior Director, Policy and Economics

 

The recent announcement that CVS Caremark will use value-based metrics to inform formulary design at first appears a step in the right direction. However, using value measurements from a single nongovernmental organization—the Institute for Clinical and Economic Review (ICER)—based on a limited picture of treatment value may be problematic. Using this single assessment of value in an effort solely to exclude drugs from a major insurance formulary is even more worrisome and fails to recognize the heterogeneity in patient clinical needs and preferences.

Precision Health Economics (PHE) is a research consultancy that has dedicated itself to improving value measurement in health care. Having engaged in the ICER evaluation process over the past few years, PHE finds that increased use of ICER’s assessments in decision-making is concerning in part because of ICER’s lack of full transparency. ICER is a private organization, without formal peer review of its work. While ICER releases its study protocols and engages drug stakeholders and the public during open input periods, its underlying calculations and programming code are not publicly available. With the goal of transparency, PHE recommends following a value measurement approach similar to the one developed by the PHE-supported Innovation and Value Initiative, which promotes the development of fully transparent, open-source models as part of its Open-Source Value Project.

Furthermore, the benefits of a drug cannot be accurately stimated at launch before the bulk of its real-world use is implemented. Formularies are reevaluated every year as the treatment landscape and marketplace changes. However, ICER typically does not adjust its static estimates in response to new information, nor does it allow other researchers to make adjustments. ICER has updated previous reports as new treatments become available, but typically does not update these reports as new evidence arrives for the same treatments.

ICER’s approach also excludes important components of value that are broadly recognized by experts in the field. Guidelines from the Second Panel on Cost-Effectiveness in Health and Medicine recommend considering an inventory of societal impacts such as caregiver burden and productivity. These societal impacts are not consistently included in ICER’s assessments, nor are a number of additional ways that innovative treatments may generate value to patients and society. For example, new treatments may reduce the risk faced by healthy people from developing a disease in the future. Such insurance value can represent nearly half the value of multiple sclerosis treatments. When therapies allow patients to survive until the next major therapeutic breakthrough, they create option value that can represent a quarter of the value of certain cancer treatments. PHE research has led our understanding of these and other components of value, which have been endorsed by the ISPOR Special Task Force on Value Assessment Frameworks, but are not considered in ICER’s estimates.

Finally, ICER fails to account for patient variation in outcomes and preferences. The goal of healthcare should be to align care that provides greatest value to the individual rather than just the highest value treatment on average. When there is heterogeneity in treatment effects, restricting options reduces the ability of providers and patients to select appropriate treatments, which can lead to worse health outcomes and even higher costs. For example, a PHE article published in JAMA demonstrates the importance of considering how value varies depending on the particular stakeholder. Certain patients will favor treatments that have greater efficacy but also increased risk of adverse events, while other patients will focus on avoiding these adverse events even if it means sacrificing some efficacy. Restricting access based on average cost-effectiveness estimates means there are fewer options to match patients to treatments that will provide them with the greatest personalized value.

While it is tempting to use ICER’s one-size-fits-all estimates for decision-making, the applicability of ICER’s value estimates is limited due to a lack of transparency, a narrow definition of value, and failure to fully address patient heterogeneity. PHE fully supports movement toward a healthcare system that makes decisions based on value, but CVS Caremark’s approach uses incomplete information on value, which may prevent patients from accessing valuable treatments, and places too much power in the hands of a single, nongovernmental organization.

By:
 Jason Shafrin, PhD 
Sr. Director, Policy and Economics
Jacki Chou, MPL Senior Director, Policy and Economics

Precision Medicine Group is an integrated team of experts in fields from advanced lab sciences to translational informatics and regulatory affairs, payer insights to marketing communications. Together, we help our pharmaceutical and life-sciences clients conquer product development and commercialization challenges in a rapidly evolving environment.

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