Measuring the Value of Pharmaceuticals Over Time
Measuring treatment value is difficult. Costs are relatively easier to measure but benefits are often more difficult, particularly impact on caregiver burden, productivity, quality of life and other factors. Not only that, but the “benefits” that accrue to a person may vary by individual. Some individuals may prefer treatments that are more effective, but with more side effects; others may be willing to sacrifice some efficacy to avoid side effects.
In addition to those challenges, a treatment’s value–particularly its estimated value–change over time. Value changes when the price changes, but the estimated value also changes as we get new evidence to better understand cost and benefits from additional clinical trial information, real world data, surveys, and other data sources.
With that background, ICER has decided to evaluate treatments for unsupported price increases. Re-evaluating treatment value over time is an important challenge to address. For instance, the Innovation and Value Initiative does this by creating dynamic tools online and putting source code freely available online in order to allow model updates as new information becomes available. ICER has chosen to do report updates, which is less flexible, but a needed improvement to doing a single value assessment at one point in time.
With that as a backdrop, I was interviewed by PharmaLive to further discuss this topic:
“The value of a treatment changes over time based on the evidence available about its benefits, risks, and costs. In fact, Dana Goldman and others have proposed a three-part pricing model, where drug prices start out relatively low and increase over time as uncertainty resolves, and then fall after patent expiration. A key question is, how do we determine when new evidence would justify price increases? Thus, ICER addresses a pressing issue.”
Health economics and outcomes researchers have recommended the inclusion of nonclinical value assessments into HEOR such as a treatment’s effect on productivity, caregiver burden, educational outcomes, and other factors. Dr Shafrin continued:
“As this evidence accumulates, it is important for ICER to incorporate these components into its value assessment as well. My own research has shown that including these recommended components can significantly affect a treatment’s estimated value.”
Commentary posted with permission from Dr Shafrin.
