Improving Health Plan Implementation, Value-Based Formulary Design

Researchers recently advised that a unique criterion and process must be used to evaluate drugs for placement in a value-based formulary. 

“A value-based formulary design incorporates clinical safety and efficacy, weighs costs and evaluates the net benefit of a drug to the patient to maximize access for high value drugs while discouraging the use of low value drugs,” wrote researchers. “While there are well defined processes for evaluating literature, there is no specific framework for assessment towards a value-based formulary.” 

In order to develop a value-based benefit design aimed at assessing the relative effectiveness versus the cost of treatments when designing a value-based formulary, the study authors developed a value-based tier structure. They used components of the Institute for Clinical and Economic Review (ICER) Evidence Rating Matrix, Hayes Rating System, and consultation with experts in formulary design and value-based formularies and applying them to a value-based assessment process. 

The researchers said that the tiers were organized as follows by Tier/Co-pay:  

• T0/$0 (Cost saving and preventative treatments);
• T1/$5-$15: (Moderate to high level of certainty with outcomes at least comparable to standard treatment/ higher price vs. T0) ;
• T2/$50-$75: (Potential, but unproven benefit with low to moderate certainty);
• T3/50% coverage: (Limited impact on outcomes with low certainty) Non-Formulary/no coverage: (No proven benefit, unsafe or low value compared to clinically appropriate alternatives);
• Specialty T1/$150: (Preferred specialty medications with high certainty, but at a high net cost);
• Specialty T2/$250: (Non-preferred specialty medications with a higher net cost compared to Specialty T1); and
• Specialty NF/No coverage: (Specialty medications with insufficient evidence of clinical value). 

The researchers followed the ISPOR Special Task Force guidelines as a standardized process for the qualification of treatments into value-based tiers. Further, they used the Real-world Evidence Assessments and Needs Guidance (READi) web-based tool to standardize the literature searches and quality ratings. Finally, the study authors used the ICER Evidence Rating Matrix in order to combine the assessment of quality and the assessment of net health benefit for comparing between treatments. 

“Evaluating drugs for placement in a value-based formulary requires a unique set of criteria and process for evaluation,” the authors concluded. “The methods and results presented can assist other health plans in creating their own, customized approaches towards developing a value-based formulary.” 

—Julie Gould  

Reference:

Panchal R, Pan R, Parker T, Eichler M, Britton L, Brixner D. Creating a value-based assessment framework for health plan implementation. Poster presented at: AMCP 2021, April 12-16, 2021; Virtual.

View the full poster: