Authors: Patricia Deverka, Jennifer Bright, Louis Garrison, Samuel Nussbaum
We have seen the COVID-19 pandemic decimate people’s lives, health care systems, and the global and US economy, with investments by the US government exceeding $4 trillion dollars and with unemployment approaching 20%. In recent days, numerous articles have speculated on the pricing for Gilead’s new therapeutic, remdesivir. This first therapeutic is indeed a test-case for the race to find the balance between price and value to society. Many have commented on the work of the Institute for Clinical and Economic Review (ICER) in conducting a first cost-effectiveness analysis of the product, with an eye toward informing its potential “value-based price”. As companies tackle rapid investigations into therapies—including yet-unrealized vaccines and potential cures—we think it crucial to take a broader perspective in defining value.
ICER’s analysis included two pricing scenarios that could “set the bar” for pricing of future COVID-19 treatments more broadly. First, they assessed cost recovery for the manufacturer, or the minimum costs for production of a course of therapy, assuming zero costs of research and development. And second, they modeled cost-effectiveness and assessed value by comparing the incremental health benefits and health system costs of remdesivir versus standard of care for hospitalized patients with advanced infections and lung involvement. The model captures quality-of-life improvements, mortality benefits, and the benefits of fewer days in the ICU, on ventilation, and reduced length of hospital stay. Notably, ICER considered the substantial uncertainty underlying the clinical evidence, particularly the impact of remdesivir on mortality.
As a non-profit organization focused on engaging stakeholders to drive rigorous, patient-focused value assessment on an open source platform, The Innovation and Value Initiative (IVI) has a number of concerns about the process and substance of the analyses. Our concerns represent fundamental limitations we’ve explored in this field since IVI’s inception and are consistent with our mission to improve the science and practice of value assessment. We applaud ICER for creating a public forum for review and ongoing modification of their work, but we are troubled by the lack of stakeholder evaluation of this early model’s assumptions and the potential for an overly narrow assessment of value. As the nation and world invests billions in vaccines and new therapies, and people broadly recognize the importance and cost of scientific discovery and well-conducted clinical trials, ICER’s approach could lead to disincentives for investment in development and use of more valuable innovations. Below we outline some key limitations of this preliminary model and offer some principles to guide future value assessments.
First, there is tremendous uncertainty in the underlying evidence regarding prevalence of COVID-19 infections and of treatment effectiveness for remdesivir. This is a common problem for new-in-class therapies, but is particularly relevant in the setting of a rapidly conducted clinical trial for a new indication, such as occurred for remdesivir. Why does the concern about uncertainty matter? Because it means we don’t have a strong indication of when and for whom such a therapy will work most effectively. In a drug that is primarily indicated for reducing severity and duration of symptoms in hospitalized patients, we don’t know what proportion of patients will benefit because we lack comprehensive data about patient characteristics. While ICER acknowledges that “results will evolve as further data are released and as the context for the patient population treated evolves,” the decision to release an assessment given the uncertainty may lead to premature conclusions that therapies will be low cost.
Second, there is lack of flexibility in the structural assumptions in ICER’s two models. IVI has shown through its own research that model assumptions can substantially impact cost-effectiveness. In our models we have incorporated multiple model structures for simultaneous simulation—allowing the decision maker to see the effects of different assumptions on outcomes. In the ICER cost-recovery model, the key assumption for debate is whether setting recoupment for R&D costs to zero is an acceptable approach for pricing. Alternatively, evaluating a plausible range of assumptions would yield more nuanced discussion of accompanying price estimates that trade off the development and distribution implications of setting the price at $10 for a course of therapy. Remdesivir was initially developed for Ebola infections and was ineffective in this viral illness, yet the company continued investment in other indications. To be prepared for future pandemics, we will need to develop an armamentarium of drugs which can be available near immediately for clinical studies and patient care.
In their cost-effectiveness (CE) model, ICER scaled down the threshold for pricing analysis to $50,000 per QALY (quality-adjusted life-year) exclusively, based on the premise that this is the more policy relevant threshold in a public health emergency. Although ICER has routinely used this threshold in previous assessments, this has been the lower bound of comparisons to other acceptable thresholds such as $100,000/QALY and $150,000/QALY. Although there may be good arguments for using different rules in the current COVID-19 situation, ideally such changes would be based on a prior stakeholder-informed dialog. Similarly, ICER omitted impacts on health system capacity and health care personnel from their CE model (which is standard practice), but in the current environment where front-line health care workers are losing their lives to COVID-19 and are rightly embraced as America’s heroes, models need to assess the impact on heath professional resources, capacity, mental health, and loss of life.
ICER’s simplified cost-effectiveness model presentation is unclear concerning the magnitude and derivation of the cost savings from reduced ICU average length of stay. The ability to understand the impact of parameter uncertainty on cost-effectiveness when varying model inputs, such as patient age or probability of survival for ventilated patients, is also desirable. While average age in early prevalence data may be the assumed 62 years, evolving data has already demonstrated the impact of COVID-19 on younger patients, including children. In our view, economic models should allow decision-makers to assess the impact of a plausible range of parameters on costs and outcomes by evaluating new or context-specific real-world data.
Third, ICER’s initial assessment overlooks emerging thinking about augmented value frameworks that better account for broader societal benefits. In 2018, ISPOR’s Special Task Force on Value Assessment Frameworks published recommendations for vigorous research and testing to incorporate benefits beyond net costs and net QALYs into value assessment. These novel elements of value include such factors that are highly meaningful as a result of the COVID-19 pandemic, including fear of contagion, severity of illness, and elements related to uncertainty, such as insurance value and the value of hope: they can be seen as features of the societal impact of a therapeutic intervention. There may also be scientific spillovers from use of remdesivir—viz., the knowledge that we gain about treating the virus is valuable and could be the first step toward combination therapy, analogous to the introduction of AZT for HIV/AIDS. Country-level health technology assessment bodies such as NICE in the UK have explored expanding similar methodologies in the assessment of emerging therapies, antimicrobials, and potentially curative therapies. The absence of these in currently available analyses for remdesivir is a missed opportunity to align the reward-for-value equation with signals for long-term investments that generate valuable innovation over time.
How “value” is determined will have long-term consequences on the future investments in COVID-19 treatments. The unintended impact of narrow assessments could create disincentives for investment in novel treatments that could offer improvements or even a cure. If a vaccine is approved soon, remdesivir and other treatments may no longer be needed, or used much less frequently. Also, our evolving understanding of how COVID-19 attacks various organs and affects the immune system is likely to require investment in treatments with novel mechanisms of action. Thus, the innovation reward for the manufacturer is highly uncertain and might be quickly reduced. And—much as we have seen in the antibiotic space—without factoring in the investments required to develop and to continue to refine therapies in an evolving pathogens scenario, innovation can dwindle or perhaps stop altogether.
Our comments do not detract from the call for “fair pricing” particularly in a global pandemic—that challenge exists in all aspects of health care from medicines and ventilators to the cost for personal protective equipment and emergency room or critical care in the current pandemic. Rather, we propose that it’s time to approach value differently. Patients lose when we lack therapeutic options or an understanding of how to optimize their use just as much as when their prices are unjustifiably high. The win-win approach is to expand our national conversation about value to inform the long-term view of investment and use of our scarce healthcare resources. To increase confidence in efforts to base reimbursement and policy decisions on value, IVI advocates for the following value assessment principles: consensus on model inputs, methods and structures based on public input; flexibility to accommodate the information needs of stakeholders; transparency to allow real-time review and updating; and open-source development of models to enable widespread use and customization. Just as we hold companies accountable for the quality of their products, we need accountability in the methods we use to arrive at the label of “value.”
Major new investments in public health infrastructure, vaccines, and anti-viral therapeutics will be essential to protect the globe from the specter of economic decline, fear, major illness, and death. As this pandemic has shown, the consequences to our health and our economy are bleak in a world where we don’t foster ahead-of-the-curve science. Our goal is to ensure that approaches to determining the value-based price of current treatments reflect cutting-edge health technology assessment methods, reward risk-taking and innovation, and emphasize comprehensive strategies to improve public health.