Defining Value

Inside Edge Consulting, Princeton

November 13, 2013

The issue of defining value came up many times at last week’s Academy of Managed Care Pharmacist (AMCP) Nexus 2014. Value, as applied to health and healthcare in the US, can be a tricky topic. Patients talk about the right to have access to any medicines, regardless of the benefits and costs; any pushback on this leads to a discussion of “death panels”. There aren’t many facets of our life where we don’t consider the cost-value equation, however when it comes to our health, the equation changes.

Defining value in healthcare largely falls on the shoulders of Managed Care companies, who are responsible for analyzing both the costs and the benefits of new medications as they come on to the market. In the UK, we have seen NICE reject drugs deemed too expensive and/or unable to provide benefits over standard of care or currently available medication. It was a shock when this first occurred, but there was not an outcry against the system. So, how do we in the US find our balance?

Currently, most managed care companies have a structured approach to assessing value beyond safety and efficacy. With many specialty drugs launching between now and 2018, the cost pressures to payers, patients, and providers will only continue to increase. How can value be best assessed? The following are some areas which were discussed at AMCP:

  • Comparative clinical effectiveness
  • Level of certainty on net health benefits
  • Incorporation of ICER Evidence Rating Matrix –
  • Benefits beyond the patient, such as reduction of dependence on other caregivers
  • Contextual considerations including such things as no other treatment option, high severity of condition, vulnerable populations
  • Affordability
  • We don’t yet have the answer to assessing value. However, hopefully within the next few years the healthcare industry including payers, patients, providers, and pharmaceutical companies can work together to find the equitable equation that determines the value of drugs.

    Global healthcare, Managed care