Value Is in the Eye of the Beholder? NPC Takes Closer Look at ICER Framework

In recent months, a number of health organizations have developed “value assessment frameworks,” which are designed to inform coverage and treatment decisions made by payers. Many of these frameworks base their assessments largely on pricing data, without fully considering the broad benefits of a treatment on a population, over the long-term, or from a patient’s perspective.

By not considering the full value and benefits of medical innovation, especially when it comes to unmet medical needs and treatments that impact broad populations, any of these frameworks could be misused as barriers to block patient access to life-saving treatments.

One of these frameworks was discussed today during a webinar, when Institute for Clinical and Economic Review (ICER) President Dr. Steve Pearson publicly presented his conceptual value assessment framework. The National Pharmaceutical Council’s (NPC) chief science officer, Dr. Robert Dubois, participated as a reactor to the ICER framework.

To Dr. Pearson’s credit, he actively sought input from payers and the pharmaceutical industry in the development of his framework. Unlike other frameworks, the general approach of the assessment process is mostly transparent and takes into consideration additional benefits beyond cost effectiveness, such as addressing an unmet need, a large disease burden, or a new mechanism of action that might benefit patients who do not respond to other available therapies.

The ICER framework, which is composed of both a clinical care value assessment and health system value assessment, is still problematic. Some of the shortcomings of the ICER framework include:

• Although the general components that are considered in the care value assessment are transparent, the actual economic models that are used to evaluate treatments—and the related data points—are not available for public review.
• The health system value (HSV) assessment sets an annual threshold for the amount a drug could cost to keep overall health expenditures from increasing faster than the Gross Domestic Product (GDP) plus one percent. Methods to determine affordability price thresholds need broader input and validation from health care stakeholders.
• Under the HSV calculation, the framework relies on drug adoption rates that might not accurately reflect the uptake of a drug. Most payers tend to wait six to 12 months to see how a drug is being used and how well patients respond to it before making those types of calculations, which provides them with a more accurate adoption rate.
• The HSV assessment also uses the list price of a drug, which does not consider the actual discounts and negotiations made with public and private payers.
• HSV calculations assume that similar numbers of new drugs will be approved each year by the Food and Drug Administration and will have similar market experience. From historical experience, these numbers can fluctuate greatly from year to year.  
• Typically, payers only consider a 1-2 year timeframe for calculating budget impact, although the effects of a treatment are realized over a longer time horizon. The ICER health system value assessment uses five years for calculating the budget impact, although this still might not capture the true savings realized from curative therapies. Hepatitis C cures, for example, produce economic savings well beyond five years.
• The threshold prices do not reflect key economic benefits, such as improvements in worker productivity that are valued by employers, or the savings or reductions in caregiver burdens that are important to patients and their families.
• The method used to determine health system value creates a disincentive for the development of medicines to treat large, unmet burdens. Because it is based upon the number of individuals requiring treatment, drugs that treat broad, unmet need conditions such as hepatitis C, inadequately controlled high cholesterol, or (hopefully, in the near future) Alzheimer’s, would be viewed as having low health system value merely because of the large treatable population, even though they may be very cost effective for individual patients. 
• Despite an acknowledgment by most health care stakeholders that we need to have a broader, constructive discussion about value, too often these conversations devolve into criticisms of price.

The ICER framework is still a work in progress, and NPC does not believe it is ready to be utilized as a reference tool by payers or other entities seeking to determine value for biopharmaceutical products. There will be opportunities to comment on the methodologies going forward. NPC plans to continue playing an active role in the conversation and welcomes the opportunity to engage in a constructive dialogue with Dr. Pearson.

NPC also has weighed in on other frameworks and recently submitted comments to the American Society of Clinical Oncology (ASCO) that focused on how to improve the patient-centricity of ASCO’s framework to enhance its ultimate value as a shared decision-making tool. In particular, NPC recommended broadening the framework to include more factors that patients value, strengthening the assessments of clinical benefits and toxicity, ensuring cost information is relevant to patients, expanding the evidence base that underlies the framework, and safeguarding against framework misuse.