QALY Remains a Challenge, Societal Perspective Presents an Opportunity With ICER’s 2020 Value Assessment Framework

In the United States, our health care payment system is slowly moving from one based on paying for each service to one based on paying for the value of those services. As our payment system is evolving, so too are the tools to assess that value, especially for biopharmaceuticals and other treatments.

To assess value, a number of frameworks are currently being developed and tested, and each has different purposes, methods, inputs and outputs. Some, like the Institute for Clinical and Economic Review (ICER), are intended for use by payers, while other frameworks are focused on shared decision-making between physicians and patients.

ICER today announced updates to its Value Assessment Framework, which it plans to use for reviews conducted this year through 2023. The National Pharmaceutical Council (NPC) weighed in on needed changes during ICER’s public comment period, focusing on the need to include the societal perspective as a “base case” in its methodology, expand the focus of its assessments to the entire health system, and replace or modify its methodology based on the cost-per-Quality-Adjusted Life Year.

We took a closer look at how ICER addressed these important considerations in its updated framework:

Societal perspectives. NPC had urged ICER to quantitatively incorporate a broad array of benefits that are important to patients and society as part of its assessment process. Ideally, these benefits – such as productivity and caregiver burden -- would be included as a “co-base” case, providing a better understanding of the full societal impact of a treatment. Currently, ICER uses the payer’s perspective as a base case. As part of the updated framework, however, ICER has said it will consider including the societal perspective as a base case, but only when the impact of care outside the health system is substantial in proportion to health effects. This could be a welcome change, depending on how ICER puts this into practice – how robust will its consideration of societal factors be?

Health system considerations. In a separate announcement late last year, ICER said it would consider at least two non-drug topics for review in 2020. In previous comments, NPC called on ICER to broaden its view, given that 84% of health care spending is not on biopharmaceuticals. ICER’s announcement is a small step in the right direction. If ICER conducts more than two non-drug reviews and chooses truly impactful topics to study, it could be an even larger step in the right direction.

Quality-Adjusted-Life Years (QALY). Determining a cost-effectiveness threshold for one year of healthy life (known as a Quality-Adjusted Life Year, or QALY), remains the primary way that ICER decides what is good value, which can impact patient access to needed treatments. In fact, patient organizations are especially concerned that the QALY could discriminate against older patients or those with disabilities. Health economists also recognize that the QALY is an imperfect measurement, and that’s why other framework developers are testing other methods, including multi-criteria decision analysis. NPC believes it is critical to test and implement alternative value assessment methods.

We’ll also be keeping close watch on other changes to see how ICER puts them in motion. Among them, ICER has agreed to increase its use of real-world evidence (RWE) as part of its review process, although how and when it will use RWE remains unclear.  It also has agreed to update previous reviews on a regular basis, if new evidence becomes available.

It’s important to keep in mind that there is no “best” framework. All of them, including ICER’s framework, have strengths and weaknesses and should only be used in combination with other value assessment tools. There is a need – and room for – many different frameworks and voices to address health spending questions.

NPC has developed a broad range of peer-reviewed studies and public comments on value assessment.