Value Assessment: Next-Gen Cost-Effectiveness Analysis Needed?

In this Roundtable we will discuss the role, including key opportunities and challenges, for cost-effectiveness analysis (CEA) in value assessment, particularly for but not limited to pharmaceuticals. ISPOR’s recent Special Task Force on US Value Frameworks recommended CEA as a starting point for frameworks that inform coverage and reimbursement decisions1. However, it also acknowledges some of the limitations of the standard cost per quality-adjusted life year (QALY) approach in representing patient and societal values, recommending consideration of novel value elements in health economics and health care decision-making – in the form of “augmented” CEA and/or net monetary benefit (NMB). Important challenges remain in several areas – its use for rare diseases, curative treatment, personalized medicine, equity concerns and short-term budgetary challenges. Furthermore, the debate continues about how knowledgeably it is used in practice, and how well its regular use would incentivize innovation. QALYs and health care costs often form the basis of value assessments based on CEA. However, QALYs capture only a subset of impacts that may be produced by a health care intervention, so the standard CEA framework neglects numerous alternative aspects of value that should also be considered. Such value elements include reduction in uncertainty, fear of contagion, insurance value, severity of disease, value of hope, real option value, equity, and scientific spillovers. Some of those elements affect the patient, while others accrue to society at large. There are two potential approaches to including these added elements within a general CEA framework. One approach is to selectively, and systematically, add elements to either the numerator (net cost) or denominator (net benefit as measured in QALYs or utility), as most appropriate. This approach has the advantage of retaining a cost per outcome ratio form but is likely to affect what threshold is applicable. The other approach is to monetize all benefits so that a net monetary benefit (NMB) can be calculated.2,3 Several examples of these approaches will be presented during the Roundtable. The situational and pragmatic challenges with CEA that would not necessarily be addressed by these improvements will also be discussed during the Roundtable, and will include industry and health technology assessment group perspectives. For example, there has been much discussion about appropriate CEA thresholds for rare diseases – where small patient populations have been used to justify prices higher than normal thresholds would justify, as needed to recoup development costs – and curative therapies – where high patient demand may result in large budget impacts, even at “cost-effective” prices. With all of the above considerations in mind, the session will conclude with a discussion of the pros, cons, and potential impacts of more widespread use of CEA in coverage and reimbursement in the US. References 1 Garrison LP, Neumann PJ, Willke RJ, et al. A health economics approach to US value assessment frameworks—summary and recommendations of the ISPOR Special Task Force report [7]. Value Health 2018;21:161–5. 2Lakdawalla D, Malani A, Julian R. The insurance value of medical innovation. J Pub Econ 2017;145:94-102 3https://innovationvalueinitiative.github.io/IVI-RA/model-description/model-description.pdf.