Chairman’s Blog: Five Questions Decision-Makers Should Be Asking About Health Technology Agencies

As policymakers wrestle with solutions to improve sustainability, patient access, and affordability in health care, the debate around prescription medicines has led some to suggest that using a centralized, government-run health technology agency (HTA) to assess value would help lower spending.

Given the countless providers and payers involved in the U.S. health care system, decision-makers should exercise caution and consider the tradeoffs such an approach could present to American patients.

First, it’s essential that we make two important clarifications about pharmaceutical spending:

• Public demand for action on drug prices is likely due to the increasing out-of-pocket burden placed on patients by problematic insurance design. Over the past 15 years, premiums and deductibles have risen much faster than wages: The average employee deductible on individual coverage has gone from $584 in 2006 to $1,644 in 2020. At the same time, the average employee contribution to employer-sponsored individual coverage has gone from $627 in 2006 to $1,243 in 2020.
• Data from the Organisation for Economic Co-operation and Development (OECD) show that while the U.S. spends a higher percentage of its gross domestic product on health care than other economically similar countries, it spends a smaller percentage of its overall health spending on prescription drugs — less than Australia, Germany, Canada and Japan. In fact, if you look at what causes U.S. health care costs to be higher than other similar countries, 90% of that difference is driven by the high cost of U.S. inpatient and ambulatory care services and administrative services. Pharmaceuticals only make up 10% of the difference in health care costs between the U.S. and other similar countries.

With this in mind, policymakers, patients and other stakeholders should consider the following five questions when it comes to HTAs:

1. Do HTAs Influence Whether Patients Get the Treatments They Need?

For the most part, when new treatments become available, patients in the U.S. have access to them before patients in countries that use HTAs to cap spending, a tactic that delays access to new and innovative treatments.

The delay caused by HTAs in getting new treatments to patients can be extensive. In Europe, the mean delay for cancer treatments was 561 days, according to 2016-2019 data from the European Federation of Pharmaceutical Industries and Associations.

If the U.S. relied on a centralized HTA to determine drug reimbursement in public programs, patient access would almost certainly face negative impacts. In 2018, Xcenda examined data for more than 200,000 Medicare patients taking products that had been evaluated by the Institute for Clinical and Economic Review (ICER), a U.S.-based organization that conducts HTAs. The Xcenda study showed that if Medicare used the ICER-based analyses to determine drug coverage policy, nearly 140,000 of these patients with serious chronic conditions could be forced to switch to a different therapy, including 93% of patients undergoing treatment for multiple sclerosis.

2. Will We Use Quality-Adjusted Life Years?

One controversial aspect of HTA assessments is their frequent use of a metric known as the quality-adjusted life year (QALY) to measure the impact of a drug or a treatment on a typical patient’s life. Critics, including many in the patient advocacy community, and especially the disability community, contend that the use of this metric favors the lives of the able-bodied and diminishes the impact that a medicine or technology may have on people living with disabilities.

Policymakers may be taking notice. The Biden Administration’s drug pricing plan noted “important concerns about the equity implications” of QALYs and that changes “should avoid utilization of methodologies that adversely impact access to needed medications for vulnerable populations.”

3. What Are the Assumptions Underlying the Assessment Framework?

Research shows that HTA assessments are often dependent on the assumptions made by those doing the evaluations and that these assumptions – and the range of alternate plausible assumptions – are not always made transparent to stakeholders.

Numerous studies have shown the high variability in HTA assessments of the same products. Changing assumptions can dramatically change the outcome of the HTA review. A recent study from the Center for the Evaluation of Value and Risk in Health at Tufts University Medical Center looked at ICER’s 2017 assessment of ovarian cancer treatments known as poly ADP-ribose polymerase inhibitors, or PARP. The study found that the assumptions selected by two groups of outside experts led to cost-effectiveness estimates that differed from ICER’s in 9 of 12 cases. In 7 of those 9 cases, the revised cost-effectiveness estimates were more favorable than ICER’s.

These study results are a clear indication that any assessment risks at least some level of uncertainty and potential bias. Other stakeholders have noted these issues with ICER across disease areas and medicines. Key to understanding the assumptions is transparency, which is also a common problem among HTAs. So how reliable and accurate can the science of health technology assessment be, if we consistently see this level of variability in results and recommendations? If an HTA is going to be used, then the methodologies and models must be fully transparent and reproducible to ensure that assessments are valid and credible.

4. What Is ‘Value?’

Looking more broadly, one of the biggest challenges for an HTA is how to evaluate what is truly “value.” Many HTAs only take into account a small fraction of what is considered the “value” of a medicine, and what is included in value assessments may not represent what patients actually value. What is included when assessing the value of a product is highly variable across HTAs and is subject to a great deal of ownership bias. For example, some patients may value reduced disease severity, while others may value the ability to continue working or caring for their family. A severely ill patient may value “hope,” the possibility of extending life until a new treatment or cure is discovered.

The variability of how HTAs define and measure value determines how key stakeholders, including payers, perceive the actual value of a medicine. This is a particularly concerning issue when HTAs are incorrectly portrayed as having the capability to determine accurate and irrefutable exact point estimates of value. Thus, if a centralized HTA is used to guide coverage policies, that perceived value could have a direct impact on whether patients can access a treatment that their physicians think they need. Policymakers should be careful about the use of such subjective and variable assessments in decision-making and their potential to harm to patients, especially those with conditions where there is significant unmet need.

5. How Can HTAs Evolve?

For an HTA system to have any promise for managing costs, fairly assessing value, and preserving patient access to new treatments and cures, HTAs need to evolve in several ways, such as:

• Employing established methods with transparent and reproducible models and assumptions.
• Eliminating bias and measures that can be discriminatory.
• Incorporating health disparities into the assessment process.
• Ensuring there is a clear process for receiving and quantifying the patient perspective in the value framework and report.
• Acknowledging the lack of precision by using ranges instead of specific numbers.
• Avoiding budget caps that unduly delay or impede patient access to pharmaceutical innovation.
• Implementing and adhering to accreditation standards for all HTAs.
• Developing dynamic assessments that are regularly updated to keep pace with medical advancement.

In the current drug pricing debate, we need an honest conversation about the potential risks and tradeoffs of the U.S. relying on a singular HTA, with a focus on examining the impacts on access and patient affordability. Let’s continue the dialogue.

Michael Ryan is senior vice president, Worldwide Value, Access, Pricing Health Economics and Outcomes Research at Bristol Myers Squibb.