Andrew Briggs, DPhil
Chair of Health Economics, University of Glasgow, Glasgow UK.
Senior Scientist, Memorial Sloan Kettering Cancer Center, New York, NY, USA.
Director and Principal, Avalon Health Economics, Morristown, NJ, USA.
This blog was created from a presentation given at the ISPOR Annual Meeting in New Orleans, May 21st, 2019 as part of an Issues Panel entitled: “Gazing into the HEOR crystal ball: What might the future be for HEOR in the 2020s?” Thanks must go to my co-presenters: Finn Børlum Kristensen, Nancy Devlin, and Ross McLean, to the audience, but especially collegues in the twittersphere who wanted to know more which encouraged me to write this up.
Among the many challenges faced in our field, I choose five challenges that seemed to me to be more recent, and which I believe could shape the discipline over the next decade:
For each of these I chose to identify ‘smoke and mirrors’ elements of the debate, a potential ‘wild goose chase’, but to finish with some more constructive comments on the challenges ahead and where I believe the HEOR research community should focus its efforts.
In case ‘smoke and mirrors’ and ‘wild goose chase’ are colloquialisms, I offer, if not the dictionary definition, then at least the sense in which I am using the terms.
Smoke and Mirrors: originally referring to a particular magical/illusionist technique from the 1800s, I use this term in the more political sense of being something designed to obfuscate rather than illuminate. A (possibly deliberate) attempt to confuse or distract from the real issue.
Wild Goose Chase: although the Wikipedia definition suggests a pursuit of something unattainable or non-existent, I use it more in the sense of a waste of time or a fool’s errand because the endpoint is unobtainable.
Proliferation of Value Frameworks
In recent years we have seen an astonishing number of ‘value frameworks’ developed and it almost seems as if every professional society wants to develop their own value framework. The American Society for Oncology (ASCO) released one, and this was followed by a similar (but stylistically different) effort by the European Society for Medical Oncology (ESMO). The National Cancer Coordinating Network (NCCN) has its own framework in the form of an ‘Evidence Block’. The stimulus for this interest in ‘value’ is undoubtedly the same – the perceived ever-increasing price of new cancer products at launch. While this interest in ‘value’ is a positive step forward – I argue that the development of disease/professional society specific frameworks is a retrograde step.
To understand why, I bring into evidence a ‘concept paper’ entitled ‘Perspectives on Value in Cancer Care’ published by Grayling and funded by Eli Lilly. At the centre of this concept paper is a ‘heatmap’ that looks at 14 ‘attributes’ of value across nine different value frameworks in terms of how important each attribute is for each framework. Without revealing their methodology, the heatmaps paint a picture of value frameworks in disarray with different attributes receiving more / less (no?) emphasis depending on the framework. The not-so-hidden subtext? “If the scientific community cannot agree on what represents ‘value’ then how can the industry be expected to demonstrate the value of its products?”
This is disingenuous and a true smoke and mirrors argument. The concept of value is not nebulous, but has been the subject of intense debate in the economics literature for many decades. The sub discipline of health economics has economic evaluation and associated concepts of value at its core, and has much to offer to the debate. ISPOR’s own journal is entitled ‘Value in Health’ for a reason. Furthermore, an ISPOR task-force to review US Value Frameworks, came to the conclusion that the core methodology, cost-utility analysis and the associated quality adjusted life-year (QALY) measure of health, to be core to the notion of value. The first US Panel on cost-effectiveness recommended cost-per-QALY back in 1996 and this was endorsed 25 years later by the second US Panel. The American Heart Association and American Cardiology Association published joint guidance on value that put the QALY at the ‘heart’ of value assessment. Does the QALY capture every nuance of value? No, of course not. But too many experts and expert societies support the fundamental principle of the QALY for it to be ignored. Perhaps the reason that prioritization based on the QALY was ‘outlawed’ under Obamacare reflected the fear of an industry that did not want to be held to account. The irony (and who says the US doesn’t do irony?) is that the Institute of Clinical and Economic Review (ICER), a not-for-profit value assessment body in the US, uses cost-per-QALY as its core value concept and is gaining increasing traction among private-sector payers mirroring the public sector success of the QALY metric employed in other countries.
As certain sectors in the US attempt to avoid the use of the QALY, perhaps due to the ‘socialised medicine’ connotations that it invokes, there has been increasing interest in the use of multi-criteria decision analysis (MCDA) as a technique to assess value. However, I believe this to be a wild goose chase for two main reasons. Firstly, if practiced appropriately, then MCDA will be consistent with welfare / extra welfarist economic principles and so no different from the current endeavor and concept of value practiced within the discipline. The second reason is much more dangerous, and unfortunately much more prevalent. I believe that MCDA methods are being used to further the cause of those that object to the QALY – not on scientific grounds, so much as political grounds. When practiced poorly, MCDA could easily lead to worse decisions, not better decisions. Again, in evidence, I give you the (commercially orientated) Real Endpoints: a disease specific MCDA tool.
What are the challenges to the HEOR research community around value frameworks as we enter the 2020s? I suggest three main areas. First, to explore how the existing fit-for-purpose cost-utility framework can be adapted and augmented to incorporate legitimate value concerns that go beyond cost-per-QALY. Secondly, that where that endeavor leads researchers to MCDA, those MCDAs should be conducted according to established economic principles. That means they need to explicitly use sacrificial methods to establish the weightings between attributes, and that they explicitly need to address the economic principle of opportunity costs. Finally, the HEOR community needs to take their skills outside of their own community. Just as most statistics are calculated by non-statisticians, with the result that poor application of established methods abound, so value assessments are increasingly performed by those without good training in HEOR. Value assessment in health care is in the purview of health economists, and we need to both call out ‘value quackery’ when we see it, but also, we are beholden as a discipline to help those that mean well, but are less experienced, to improve their value assessments.
New Regenerative Therapies & Cures
For a long time, commentators have argued that companies have not offered ‘true’ innovation. That their focus has been on licensing new molecular entities (NMEs) and treating that as innovation, when properly innovation should be measured in terms of health. But in recent years we have seen some truly innovative products hit the market (with correspondingly high price tags). Suddenly the payers have changed their tune. “Affordability,” they scream, “that’s also important alongside cost-effectiveness.” Take Sovaldi™ for example. It’s difficult to think of a more innovative product. We are talking about cure for a potentially deadly infection and a treatment that is literally revolutionizing the treatment of this disease. Yet, we are also reluctant to pay, the admittedly high, but cost-effective price, set by the manufacturer.
The ability to produce health, at a reasonable cost, is the key to value assessment. This principle means that if a new innovation is valuable, we, as a society, and having set the rules of the game, should endeavor to pay for it. Having requested truly valuable innovation, it is surely smoke and mirrors to suddenly switch to affordability as a criterion for not paying for a valued treatment?
Likewise, some commentators have argued that HTA methods need to ‘evolve’ to take on the challenges of these new ‘innovative’ treatments. But this is another wild goose chase – the methods we have are themselves fit for purpose. What may need to evolve ultimately is the threshold (cost-per-QALY) that we use for decision making. There are all kinds of reasons why that threshold may have been set too high, including (but not limited to) political expediency, public pressure, media coverage and lobbying. But the principle remains sound. It is quite possible that we may need to revise our threshold downwards. That will be a difficult public debate, but one that needs to happen, if we are to achieve the nirvana of valuable health care for our populations.
The challenge, I believe, for the HEOR community is to hold our nerve in the face of these pressures. To stand by the principle of value, but to ensure that in doing so we apply our principles consistently and symmetrically. That means steadfastly saying ‘no’ to treatments that do not pass the ‘cost-per-QALY’ threshold notion of value, but also steadfastly saying ‘yes’ when value as been clearly demonstrated, even if the affordability issue becomes painful. Of course, we should be cognizant of the fact that our decision thresholds themselves need to evolve and should be based on the concept of opportunity cost (technologies displaced at the margin) which itself should become a greater part of our collective research effort.
Innovative Funding Mechanisms
Where there is true innovation delivered at a price point that shows value, then, if affordability is an issue, innovative funding mechanisms should be considered.
There are smoke and mirrors issues here on two sides of the debate. On the industry side, I believe that innovative funding mechanisms, such as outcomes-based contracts (OBCs) have been used to propose a solution to high-drug prices. I believe OBCs are a solution to the affordability issue, if, and only if, value has been rigorously demonstrated. On the other side of the debate, outcome-based contracts may have been used by payers to give the appearance of accepting a ‘list price’ of a treatment while effectively achieving a discount.
Whatever side of the debate you are on, I want to argue that OBCs should be based on securing value, not on achieving arbitrary discounts nor justifying high list prices. The wild goose chase here, in my view, is focusing OBCs on short-term responder-type analysis. Let’s take CAR-T therapy as an example. At launch, Novartis secured an OBC with CMS tied to response status at 30 days. But this outcome was already (reasonably well) established in the clinical data. The OBC only served to reduce the high sticker price, not to tie that price to the delivery of true value, which would require longer term outcome endpoints.
The corresponding challenge to the HEOR community is to focus on showing how value assessments can truly address uncertainties related to value. This could either be in relation to the generalization of clinical trial results to the real world, or to the resolution of uncertain long-term outcomes such as survival. The first of these would be appropriate where the concern is that the short-term benefits seen in an experimental setting may not translate to routine clinical practice. The second, where the value proposition is based on long-term claims of cure, or highly extended survival. The latter would suit CAR-T therapy since it is long term survival that is most uncertain. Annuity-based funding arrangements could ensure value by rewarding true long-term survival but falling short of the cost of the therapy if patients die early. Although there may be challenges for implementing annuity-based schemes, particularly in the US insurance sector, these are not insurmountable with the appropriate political will for change.
Increasing Prevalence of “Rare” Diseases
We are all well aware that we live in an era of precision medicine. Although it is possible that the potential revolutionary nature of precision medicine has been overstated, what is clear is that there are an increasing number of genetic mutations that are associated with particular cancer treatments, for example. The net effect is that ‘rare disease’ is becoming more common as cancer treatments in particular become ever more personalized. And of course, the issue is that the smaller the patient group, the higher the cost a company will seek in order to recoup its investment. But this is smoke and mirrors if the same treatments are being used across multiple ‘personalized’ indications.
One of the reasons that companies are interested in an orphan designation is that most health systems accept higher prices for rare diseases on the grounds that it is more difficult to recoup return on investment in the rare disease space. But I would argue that not holding companies to account on value in rare diseases is a wild goose chase – it misses the point that we still need innovation to represent value according to agreed criteria.
For legitimately rare diseases, there are other policy levers that we can pull in order to encourage research and development in the rare disease space. If we really believe it necessary to allow a higher threshold on value, there is research that could be done on how price-setting could be undertaken. For example, a traditional cost-per-QALY calculation might be based on the costs of production that have to satisfy the usual value threshold, but then additional payments could be agreed based on proven R&D spend.
Accelerated Approval Approach
In the US, the FDA has implemented an accelerated approval approach to allow for earlier approval of drugs that treat serious conditions, and that fill an unmet medical need based on a surrogate endpoint. This has led to an ever-increasing number of licenses seeking accelerated approval as companies seek earlier access to the market in an attempt to maximize their period of exclusivity. Even more concerning is the number of approvals granted without a comparative control arm. The smoke and mirrors element here is the idea that ‘earlier access is better for patients’ which presupposes that the ‘promising interventions’ granted accelerated approval really do work. But as was seen recently with Lartruvo™ which was withdrawn from the market after the confirmatory phase III study showed no benefit over existing chemotherapy, but not before the company had amassed an estimated $0.5B in revenue – resources that could have been spent elsewhere on more effective health care to benefit patients.
But it is not just the opportunity cost of wasted payments that harms patients. Coming to market with immature data on comparative effectiveness could also delay reimbursement as payers struggle to determine whether the new treatment is worthwhile. The wild goose chase here is again the idea that ‘HTA methods need to evolve’ in the face of challenges posed by an immature evidence base that may mean single arm trials on a surrogate endpoint gaining accelerated approval. It is not the HTA methods that are lacking, but the evidence base.
The solutions to these challenges could involve additional focus on the interface between value of information methods and evidence development at an early stage, before licensing occurs based on accelerated approval. This requires increased collaboration between regulators and reimbursement agencies – in particular, regulators need to acknowledge that their remit properly goes beyond simply ensuring that new products are safe and effective. Perhaps an acknowledgement that opportunity cost is a real ‘safety issue’ would help – that when faced with expensive therapies there is a duty of care to ALL patients to avoid wasting resources and thereby causing harm in terms of benefits forgone. Finally, the concept of OBCs can and should be extended to early approval. Perhaps if it was clear going into the accelerated approval program that all revenues earned prior to confirmatory phase III results becoming available would have to be repaid in the event of a negative result, the manufacturers would have been less keen to market a product with a shaky evidence base.
In Conclusion. . .
We live in exciting times. Never has there been a greater need and demand for good health economics and outcomes research to guide increasingly difficult coverage decisions across the globe as all health systems grapple with rising health care costs.
As we constantly refine our methods of evaluation, it is important to build on work that has gone before, and avoid reinventing the wheel. This will require taking the challenge outside of our discipline when other professional societies start to grapple with the problem of defining value in their own fields. In doing so we should stand up for the HEOR principles that have been crafted over the past decades and that incentives are key to steering all stakeholders towards delivering high value health care.
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