Getting the Math Right: The Growing Movement to Improve How Medicines Are Valued Will Take Center Stage at ISPOR 2024
03 Mayo 2024 - 8:00AM
Leading health economists will gather in Atlanta on May 5-8 for a
meeting of the Professional Society for Health Economics and
Outcomes Research (ISPOR), where a growing number of experts will
make the case for updating the cost-effectiveness methodology
conventionally used by health plans and foreign governments to
determine whether a prescribed drug is worth its price. The shift
reflects a growing consensus in health economics that the value
calculations performed by health technology assessment entities in
the United States and abroad should more accurately reflect the
quantifiable real-world value of medicines to patients and society.
"For too long, health plans and foreign governments have relied
on faulty, outdated, and biased math that undervalues the benefits
of lifesaving medicines to society. Conventional cost-effectiveness
analysis is often used to deny, delay, or discourage the use of
appropriately prescribed treatments,” said Peter Rubin, Executive
Director of No Patient Left Behind (NPLB). “What we’re seeing at
ISPOR and across the field of health economics is a new movement to
replace broken cost-effectiveness methodology with an improved
approach that provides a more comprehensive understanding of the
value of innovation to patients and society.”
Simplified cost-effectiveness analysis (CEA) is increasingly
being inserted into the treatment-access decisions that impact
American patients. Organizations like the Institute for Clinical
and Economic Review (ICER) have sought to require the federal
government to adopt outdated CEA methodology in its ongoing
negotiations with pharmaceutical companies to set prices for the
Medicare prescription drug program. Several states also are
considering adopting conventional CEA through so-called
Prescription Drug Affordability Boards.
As multiple presentations and panelists at the upcoming ISPOR
conference will highlight, conventional CEA produces faulty
calculations that bias public perception and influence coverage
decisions, which in turn may determine patient access to
life-saving medicines. Updating the methodology with new approaches
that correct for these errors will be crucial to preserving patient
access to medicines that actually are worth paying for. It will
also preserve society’s incentives for the development of the next
generation of innovative and valuable medicines.
In contrast to conventional CEA, experts presenting at ISPOR
will discuss techniques for implementing an improved approach known
as generalized cost-effectiveness analysis (GCEA), which quantifies
a broader set of variables in determining value, such as dynamic
price changes over time, the number of patients likely to benefit
from a therapy in subsequent years, and disease severity.
Critically, multiple panels and presentations will demonstrate how
to incorporate GCEA into current cost-effectiveness calculations
and discuss implications for healthcare decision-making.
“If we use the wrong math to mislead ourselves into thinking
that today’s medicines aren’t worth paying for, then investors
aren’t going to bother funding tomorrow’s," said Peter Kolchinsky,
Founder of NPLB and Managing Partner of RA Capital, a Boston-based
investment firm. “GCEA math shows that the market has been far more
rational than many health economists have given it credit for all
these years, negotiating prices that actually reflect a bargain for
society when you consider that medicines go generic but hospitals
don’t. Once it’s clear that a medicine is worth its price,
hopefully it also becomes clear that the right way for us to pay
for it is out of everyone’s premiums, not by cruelly burdening
today’s patients with high out-of-pocket costs that some can’t
afford. Where’s the moral hazard in covering chemo with a zero
copay? No one fakes cancer to score free chemo. The ultimate
conclusion of GCEA will likely be that we need insurance reform to
lower out of pocket costs for patients.”
“Patients and their families deserve a fair and robust model
that adequately values the medicines we rely upon, and that’s what
GCEA does. For too long overly simplistic math has stood between
patients and breakthrough medications so bureaucrats can score
political points both abroad and more recently here in the United
States. It’s hard to live with a terminal rare disease. It’s
immeasurably more difficult to live with one when the academic
class willfully overlooks the value of what better health means to
us,” said Gunnar Esiason, a patient advocate living with cystic
fibrosis.
One featured panelist will be Darius Lakdawalla, PhD, who
co-authored a September 2023 paper that identified several
significant flaws in value assessments conducted by ICER.
Lakdawalla’s research showed that, after incorporating just two
missing elements of value (outcome certainty and dynamic pricing,
i.e. the fact that drugs go generic), at least nine out of twenty
drugs previously evaluated by ICER for their fully approved
indications were incorrectly classified as cost-ineffective. The
study also demonstrated how three GCEA-focused updates to ICER’s
analysis – such as accounting for the fact that drug prices go down
significantly over time when generics become available – would
better reflect the transformative and permanent benefits that
society enjoys from new treatments.
At ISPOR 2024, attendees can learn more about GCEA and
affordable innovation at the following events and panels:
- Global Differential Pricing Workshop - Promising Approaches and
Implementation Challenges
- Estimating a Drug's Price after Loss of Exclusivity As a
Function of the Cost of Goods Sold
- Actually, Me Too Drugs Are Awesome: Multi-Stakeholder
Perspectives on the Value of Me Too Drugs
- The Impact of the Inflation Reduction Act on Early-Stage
Biomedical Investment Decisions, an Illustrative Real-World Case
Example
- Meet the Speakers & GCEA Practitioners
- Valuing Obesity Treatments - an Application of Generalized
Cost-Effectiveness Analysis (GCEA)
- How Elastic Is Biopharmaceutical Innovation with Respect to
Expected Reward? What Is Missing from Existing Literature on
Elasticity of Innovation?
- Meet the Speakers and Organizing Committee of NPLB’s Quest for
GCEA and Affordable Innovation
- How Can GRACE and Other Novel Methods Estimate ISPOR Value
Flower Components? A User Guide to Generalized Cost Effectiveness
Analysis
- How to Adjust Economic Models for Health Equity in the Conduct
of Generalized Cost-Effectiveness Analysis
No Patient Left Behind (NPLB), a coalition of biotechnology
innovators, investors, economists, and patient advocates working to
lower out-of-pocket drug costs, champions GCEA to help policymakers
and broader health care industry stakeholders more accurately
assess the value of medicines. In addition to supporting
peer-reviewed research, NPLB created this animation to help
illustrate the importance of “getting the math right.”
During the ISPOR conference, NPLB will invite all participants
to join a Quest for Generalized Cost-Effectiveness Analysis and
Affordable Innovation. This initiative will encourage attendees to
take a path through the conference program, exhibits, and social
events that will expose them to GCEA math and the economics and
policy framework of affordable innovation. This journey is
particularly recommended for health economists who work in industry
and those who work on projects for industry.
About No Patient Left Behind
No Patient Left Behind (NPLB) is a coalition of biotechnology
innovators, investors, healthcare professionals, and patient
advocates working to ensure that patients have access to the
medicines they need today and in the future. Through rigorous,
independent research and data analysis, NPLB promotes biotech
affordability and innovation, advancing common-sense solutions that
enable every patient to afford the drugs prescribed by their doctor
at low or no out-of-pocket cost — while also preserving the
incentives for investment that spur the development of new,
life-saving treatments. In tandem with its research efforts, NPLB
educates leaders and stakeholders across the biotech ecosystem
about thoughtful and balanced policy solutions. Learn more about
NPLB’s latest initiatives at www.nopatientleftbehind.org.
Contact: NPLBpress@nopatientleftbehind.org