Knowing Your Values

Many healthcare authorities place a strong emphasis on value when it comes to deciding which medicines to include in national health programs. Decisions are strongly driven by health technology assessment agencies who closely scrutinize the price and expected health benefits of a new medicine. In other countries, it’s more of a blackbox approach. The US appears to fall into the latter category.

Jon Campbell and colleagues at the University of Colorado Skaggs School of Pharmacy and Pharmaceutical Sciences, in collaboration with international experts, recently took a close look at the healthcare system in the US (1). Even at the outset of the study, Campbell had a hunch about what the final results would show. “As a scientist, I am trained to not put much weight on expected findings so as to lessen the potential for bias related to trying to shape or interpret unexpected findings into expected ones. But as a human with a Bayesian approach to life, I have priors. The prior expectations for this research included the general idea that within the US, the pharmaceutical marketplace and specifically pharmaceutical pricing from the past few decades was likely not heavily influenced by a traditional understanding of the pharmaceutical’s health gains or value.”

The team used a forecasting model to look at the prices of common cardiovascular drugs in the US, estimate their value in terms of added cost per health outcome achieved, and  to find out if there was a common payment threshold. But Campbell’s initial expectations were correct – prices of cardiovascular medicines in the US were not consistently aligned with value. The US can pay up to twice as much for branded drugs as other wealthy countries, and Campbell believes that the US has done a “poor job” of signalling to innovators what it is willing to pay for improvements in health, and which health improvements are most important.

The US health care system involves many stakeholders and decision makers, and the transaction price paid for drugs is often masked by rebates and different entities involved in the drug supply, who may take a cut of the price paid in ways that are difficult to track. “Sometimes, the payer receives rebates or kickbacks that are not easy to observe in the market,” adds Campbell. “The value of a drug is even more difficult to comprehensively grasp as drugs impact patients differently.  Further, such differences may be measured or unmeasured. Metrics such as the quality-adjusted life year, which is used by the UK and elsewhere, attempt to aggregate health signals within a disease and allow for health signal comparisons across diseases. Measuring value is an area of continued research within the field.”

Campbell hopes that the study will generate more discussion about fair pricing in the US and how to measure improvements in health. “More targeted and individualized therapies are emerging that have the potential to improve health in big ways, but change is needed to ensure that such therapies reach those who will benefit from them. For example, certain subpopulations may be able to improve their health the most by making behavioral or changes,” says Campbell. “Identifying and treating the subpopulations who will benefit from pharmaceuticals and who will achieve good value for money is a way forward toward being wise stewards of our healthcare resources. If we continue to nudge the system toward incentivizing payments for value, we will reduce wasteful spending and continue to make improvements in population health.”

First, the US needs to have a more unified vision on what constitutes value in health. Campbell also urges pharma to take an active role toward achieving fair drug pricing, and to support research within methods of assessing value, including multicriteria decision analysis and augmented cost-effectiveness analysis.