A Change Is Coming

Health technology assessment is building up steam in the US – and pharma needs to prepare for it



Fundamentally fragmented in nature, the almost unique US healthcare system has, until recently, remained largely immune to the sharp health economics tools transforming healthcare delivery in other countries across the globe.

While health technology assessment (HTA) is now well-established in Europe, Australia and Canada, this contrasts with the situation in the US, which has no central, independent body making assessments on the clinical and cost benefits of new medicines.  In recent years, however, assessments have begun to creep in, albeit in a choppy and ad hoc manner – private health plans, government bodies, as well as somewhat independent bodies like the Institute for Clinical and Economic Review (ICER), are beginning to change the conversation around HTA in US healthcare.

A recent survey by Dymaximum of payer feedback found that the current use of the assessment reports is “high”, with decision-makers using them in a number of different ways. They concluded that the existence of ICER assessments is likely to have an important impact on formulary decision-making processes in the US, what they call the “ICER effect”.

Ed Pezalla works as a consultant for pharmaceutical companies on technology assessments, particularly in the US. He explains to eyeforpharma that a form of HTA has been practised widely in the US for years, although this may not be the classic cost-effectiveness evaluation that people think of when they see the acronym. 

“When people think about HTA, as it’s done in Europe, they are thinking only about making a cost effectiveness analysis, a calculation of quality-adjusted life years (QALY), and that’s really not true –there is much more that goes into it. We are still doing HTA where we ask is it beneficial to the patient from a clinical point of view, is it beneficial to the patient from a social point of view, does it benefit the health system because it improves efficiency and reduces cost.”

Much of this is being done privately by health insurance companies in the US; who Pezalla says almost every day are being confronted by “another new technology, whether it is a new device, or a new procedure, or a new pharmaceutical”.

“They have to make a decision about its coverage, about where it sits in the treatment scheme for certain kinds of patients and there is much more to it than how much it costs me to buy a QALY.”

He agrees, however, that the absence of a state or federal agency that carries out this work means that it is disjointed and inconsistent

“A major problem is that private payers cannot sit down and agree on something. They could in principle agree on the way they go about an assessment but they can’t agree on the actual assessment because if they all decide not to cover or fund something, then that constitutes a sort of boycott, which is an anti-trust issue. There are legal constraints despite there being quite a lot of similarity between what many insurance companies do. And although most payers say they are using the same data, they tend to look at different things when you drill into it. There’s not a lot of consensus here and there is a lot of variability.”

It is evident that addressing this lack of consensus would ultimately require the establishment of a Government body, much like the National Institute for Clinical Excellence (NICE) in the UK. Is there an appetite among payers for such an independent body? Pezalla says there is, and notes that some smaller healthplans with more limited resources are already paying private companies to carry out these types of assessments independently.

“I think payers would like to see more independent evaluations. There are some, largely under the radar, companies that carry out drug and device assessments and sell them on – smaller firms without the requisite personnel can purchase these reports, but they are not publicly available because they are proprietary. I think payers would like to see more transparency and have it done in the public realm.”

Yet while cost-effectiveness is part of the vernacular in many countries, it remains something of a taboo topic in the US. Pezalla notes that only a few health plans formally use cost effectiveness analysis in any way, and explains that at his previous company, AETNA, and other health plans, formal cost-effectiveness is not used because it may not be accepted by members and government agencies.

This also filters into public perceptions – a brand new concept for the US healthcare consumers, cost-effectiveness remains misunderstood and as a result, there is widespread mistrust about its use.

“Most people have no clue how it is decided,” agrees Pezalla. “The impression you get from talking to people is that it is solely based on money and most don’t understand how their health plans work. People complain that insurers charge too much but the majority of the money paid to insurance companies goes right back out the door to doctors, hospitals and drugs. There is suspicion about cost-effectiveness analysis because they don’t have much experience with it. While it is used all the time, it is not discussed in public.”

Concepts such as QALYs, in particular, are proving anathema to patients. “We have to explain that it’s not about the value of the patient, it’s the value of how we are treating the patients – there is a lot of misunderstanding out there.”

As these pharmaco-economic tools become not only more widespread, but also more necessary, how do US-based pharmaceutical companies plan for this?

Pezalla believes pharma are well aware of this, and says these issues are now being integrated early in the drug development process. “Companies are really recognising that they need to talk to the payer customer much earlier than they used to. You are much better off, if you are developing a drug, to talk to your payers before you even enter the Phase III trial stage, meaning you have to talk to them before you are even in phase II, because phase II implies a lot about Phase III.”

He notes that companies are now having advisory board meetings much earlier in the development process than before, and this impacts clinical trial design. “While the primary outcomes will be the standard ones the FDA is seeking, the secondary outcomes are often ones that payers have requested or that they think payers will request. Looking at previous NICE or ICER evaluations, they can learn that something was refused because there was a piece of information missing, and companies can learn from this and endeavour to get this information in their development program.”

Does all this add up to a revolution in the way drugs, devices, and procedures are priced and paid for in the US? Pezalla is doubtful – he sees more of a gradual shift occurring, with payers becoming more “sophisticated” in the way they evaluate data.

“Change will be incremental,” he states. “I don’t see a big breakthrough happening because it is unlikely that a public agency will be created to do these kind of assessments or that an existing agency will be tasked with them. The FDA are not going to do them for example it is not their remit and they know hardly anything about payers, and they have enough challenges in terms of throughput. Payers are also looking very carefully at whether the value frameworks developed by ASCO and the NCCN are going to be useful or not. Payers will get more sophisticated about evaluation of clinical trial data including outcomes and endpoints and I think we are going to see gradual improvement.”

Ed Pazella will be sharing his industry insights at the upcoming Data, Evidence and Access Summit 2017 event in November. 

 

 

 


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