Assessing Value of Drugs for Formulary: A Challenge for Stakeholders

Boston—Many developed countries with a national health service have a single dominant method used by the national insurer to assess and compare the value of health services. Yet, the United States lacks a uniform system to assess the value of drugs by insurers and a framework for describing decisions to key stakeholders, such as patients, physicians, and manufacturers. Little has been done to create consensus on methods to consider acquisition cost, cost-effectiveness, and budget impact as part of formulary decision-making.

During a session at the AMCP meeting, speakers discussed the challenges in assessing value, provided a conceptual framework that can serve as a “best practice” method for performing an assessment of value, and suggested ways by which value determination can be integrated into medical policy decisions.

Steven D. Pearson, MD, MSc, president, Institute for Clinical and Economic Review, opened the session by outlining how payers should determine value: define the elements of value; measure and judge the elements of value; and integrate the elements of value in a value assessment (eg, value flowchart).

He identified the 4 value consideration domains that US payers should assess in addition to the core considerations of safety and effectiveness:
(1) Comparative clinical effectiveness
(2) Additional benefits
(3) Contextual consideration
(4) Incremental cost per outcomes achieved

Comparative clinical effectiveness examines the magnitude of the comparative net health, the level of certainty in the evidence on net health benefit, and measurement options (eg, disaggregated, aggregated, and categorical summary). He noted that incorporation of the level of certainty remains a challenge.

The additional benefits domain determines if there are benefits of treatment that extend beyond patient-specific health improvement (eg, reductions in need for family caregiving). It examined whether the treatment will expand the population that will benefit from the treatment (eg, removes or reduces the barrier to treatment through new route or delivery mechanism).

Payers also determine if there are other practical advantages related to the preparation, storage, or delivery of the treatment. For contextual considerations, payers assess whether there are no other treatments available for consideration and if it involves vulnerable populations, such as children. The incremental cost per outcomes achieved can be examined in 2 ways: (1) relative measure, which is the incremental per some outcome achieved; and
(2) affordability, including the budget impact on the organization and the impact on overall healthcare costs.

Jim Murray, PhD, research fellow, Eli Lilly and Company Inc, provided an industry perspective on value framework. He said value is a matter of perspective, citing a study that summarized points from a Health Technology
Assessment International Policy Forum discussion [Int J Technol Assess Health Care. 2013;29(4):353-359]. The study’s researchers found that most people placed patient health at the core of value. Wider elements of value comprise other benefits for patients, caregivers, health and social care systems, and overall society.

“Measuring health is multidimensional and complex,” said Dr. Murray. He also noted that cost is factor. “Costs are complicated and, as with value, are a matter of perspective for what matters and how costs are counted.”

Sean Karbowicz, PharmD, concluded the session by discussing the benefits of implementing value frameworks. Dr. Karbowicz, director, prescription policy and clinical development, OmedaRx, a national pharmacy benefit manager (PBM), shared 3 reasons implementation of a value framework is important:
(1) Provides consistent synthesis and application of critically-appraised literature
(2) Delineates priorities/emphasis in framework
(3) Incorporates uniform lexicon for coverage conversations with decision-makers, including health plans, members, providers, and manufacturers

He provided a brief overview of the OmedaRx process for medication evaluation. The first step includes appraisal of the quality of clinical evidence. The PBM then synthesizes the evidence, which encompasses describing and comparing the net treatment effect, costs, and options. This leads to a management strategy to determine if the medication should be added to the formulary, if it will require prior authorization, or if it will need quantity limits, according to Dr. Karbowicz.
He said that agreed upon grading, synthesis, and decision-making guidelines help drive quality and consistency in decision-making. Framework guides, not dictates, decisions. Documentation of the process facilitates discussions with stakeholders.

In addition, continuous evaluation and revision improves usability, buy-in, and uptake.—Eileen Koutnik-Fotopoulos