Costs have always figured into drug coverage decisions, but value assessments have become a separate and more formalized part of the process at payer organizations, said members of a panel on value frameworks at the 2023 AMCP annual meeting. The Institute for Clinical and Economic Review (ICER) came up often during the discussion.
Pharmacy and therapeutic (P&T) committees at payer organizations still hold sway over which drugs get covered, but separate value assessment or business committees are playing a prominent role in coverage and contracting decisions, according to members of a panel that discussed incorporating value frameworks into coverage and reimbursement yesterday at the Academy of Managed Care Pharmacy (AMCP) meeting in San Antonio.
“This is the most ISPORish discussion I have heard at AMCP,” quipped one of the panelists, John O’Brien, M.P.H., president and CEO, of the National Pharmaceutical Council, a research organization supported by pharmaceutical manufacturers. ISPOR is the professional society of health economics and outcomes research.
The Institute for Economic and Clinical Review (ICER) and its value assessment reports came up often during the panel discussion, which had a standing-room-only audience of several hundred people.
Patrick Gleason, Pharm.D., assistant vice president at Prime Therapeutics, pharmacy benefits manager (PBM) owned by 19 Blues plans, described ICER as “one of the best out there, in terms of providing a neutral body, nonbiased as best they can … using the quality-adjusted life year, the QALY, as the metric, so you can do apples-to-apples comparisons across drug classes.”
Kimberly Westrich, M.A., director and access strategy at Xcenda and the panel’s moderator, shared the results of an online survey of PBM, health plan and integrated delivery network executives conducted in December 2022 that found that 57% of the respondents found ICER’s value assessment frameworks extremely or very useful for making formulary decisions and 53% found them extremely or very useful for pricing negotiations.
O’Brien, who gently teased Gleason about making an ICER informercial, was less laudatory, especially in his description of how ICER assessments get used.
“What I see all too often happen is (an ICER) value assessment comes out and a reporter reads the executive summary and publishes the point estimate and then somebody at a payer calls somebody at a manufacturer and kind of reads them the riot act: ‘This is your price and this is what ICER says your price should be.’ And at the end of that conversation, that document is not used to inform care or achieve anything but to beat an account manager over the head and try to obtain a greater rebate.”
O’Brien also spoke more generally about the limitations of the economic and clinical models used by ICER and others to calculate a drug’s value and, by extension, an appropriate price
“If you limit a model to only some comorbidities and some costs, you are going to get a very different answer than if you build a larger model that includes other comorbidities and other costs,” he said. O’Brien only made a pitch for tailoring such calculations to particular populations and groups.
Gleason and two other panelists, Jessica Hatton, Pharm.D.,an associate vice president, pharmacy for CareSource, and Brenden O’Hara, R.Ph., team leader, provider engagement, pharmacy initiatives, BlueCross and BlueShield of North Carolina, discussed how value assessment has been incorporated into their organization’s decision about drug coverage and formulary placement.
Gleason said the Prime’s P&T committee focuses solely on a drug’s efficacy, safety and uniqueness. He showed a schematic of Prime’s committee structure that showed an internal value assessment advising an external national P&T committee. The decisions of the P&T committee about which drugs to cover are reviewed by business committee comprised of representatives of the Blues plans that Prime serves. That business committee can elaborate on decisions made by the P&T committee — picking, say, particular drugs in a particular class of drugs that the P&T committee says should be covered — but it cannot directly contradict it, Gleason said.
Hatton said that CareSource, which started out as a single Medicaid plan in Ohio, used to have one committee handle both clinical and financial analyses of drugs. Now it has a separate P&T committee and a value assessment committee that feed into decisions about formulary design and coverage decisions. The value assessment committee evaluates a drug’s cost and formulary placements. She said the value assessment committee’s decision cannot be inconsistent with the drug “designations” by the P&T Committee.
O’Hara said that the P&T committee is still the mainstay of drug coverage decisions at organization but a separate team reviews the values of the drug. He said the traditional P&T committee process makes sense but also said that new medications with large price tags require consideration of value, not just clinical information.