October 12th, 2018
When insurers refuse to cover expensive new treatments, who is to blame? Is it the drug companies that price new treatments at unaffordable levels? Is it the payers that deny reimbursement without reviewing patient records?
Or are the independent researchers who evaluate the effectiveness of medications the true villains, as Susan Linn, president and CEO of the Epilepsy Foundation New England, argues in an op-ed in Commonwealth Magazine. Linn claims that cost-effectiveness analyses are a method of rationing care that restrict patients’ access to medications.
It’s not unusual for advocacy groups that accept industry funding to stay silent on high drug prices, support legislation that helps their funders, or target insurers for refusing to cover expensive health care services. However, EFNE goes one step further, not just blaming insurers for lack of access to medications, but attacking researchers that conduct cost-effectiveness analyses. This is an unprecedented move for patient advocate organizations, and one worth examining.
While patient access to medications is crucial, Linn’s argument is full of misleading statements and misconceptions. Here’s what she gets wrong:
In her op-ed, Linn targets the Institute for Clinical and Economic Review (ICER), an independent watchdog on drug pricing in America that conducts cost-effectiveness analyses for medications. ICER has developed a value-based framework, which researchers use to analyze the effectiveness of drugs and estimate a range of prices that correspond with the drug’s clinical value.
Linn claims that ICER sets a cap for how much insurers will pay for a medication, limiting patients’ access to medications priced above that cap. In fact, the reports that ICER produces are in no way binding for insurers, and do not represent a budget cap. The purpose of these reports is to provide information to patients, clinicians, and payers about the cost-effectiveness of drugs, which stakeholders can use as they see fit. If drugmakers set prices so high that the drug is no longer worth the cost, we should be putting pressure on drug companies to lower the cost, not blaming those who point out the discrepancy.
Linn argues that putting a value on medications is akin to putting a dollar value on human life. She decries the measurement that ICER uses, Quality-Adjusted Life Year (QALY), as callous. However, Linn doesn’t mention that QALYs are not only used by ICER, but are a standard measure of disease burden used in health economics research since the late 1960s. In fact, economists have used QALYs to justify higher drug prices. As John LaMattina, director at Ligand Pharmaceuticals, wrote in Forbes about the price of cancer drug Kymriah:
“Kymriah restores the life of a child or teenager, which is invaluable to his or her parents and family. In addition, the contributions that a person makes to society over the course of a lifetime are quite meaningful. How do we value that? In the U.K., using a calculation called ‘Quality-Adjusted Life Years’ (QALY), they use a value of $50,000 per QALY. Using this methodology, one could argue that a drug that restores the life of a child could be worth $50,000/year for the rest of that patient’s life… Against this backdrop, Novartis’ price of $475,000 doesn’t seem unreasonable.”
In Linn’s view, even if a high-priced medication does not show enough clinical value to be proven “cost-effective” by ICER’s standards, that does not mean it isn’t worth paying for. She writes:
“If someone can manage a disease through medical therapy and, in doing so, is able to contribute to their communities and live longer with their families, does that simply not count? If these therapies mean they can avoid hospitalizations, which increase health care costs, does that not count?”
Of course human life is priceless, but to refuse to compare the clinical effectiveness of drugs to their cost means that we will accept any price for a drug, no matter how high and no matter how little it does. ICER is one of the very few organizations that uses evidence to create downward pressure on drug prices – which is likely the reason it’s being targeted.
Linn mistakenly claims that ICER is “made up of people with ties to several large insurance companies.” In fact, ICER has a strict policy against any members of their voting bodies to have any conflict of interest or be working for a public or private insurance company. Their research funding comes almost exclusively from non-profit foundations, and the rest from government grants.
The Epilepsy Foundation of New England does not receive industry funding. The Epilepsy Foundation of America, on the other hand, is funded not only by non-profit foundations, but also by Abbott Laboratories and the Phrma Foundation, which represents pharmaceutical companies.
Could it be that this op-ed is yet another consequence of patient advocacy groups taking money from pharma companies? These companies give advocacy groups more than $100 million in 2015, according to a Kaiser Health News report (Abbott Laboratories gave advocacy groups more than $2 million). Either way, it’s curious that Linn would take such a hard stance against ICER when ICER has not evaluated any epilepsy drugs yet. Is there a new drug in the pipeline about to come out with a high price tag? We don’t know, but it wouldn’t be surprising.
If advocacy organizations are concerned about the well being of patients and gaining access to medications, they would be scrutinizing the actions of drug companies as much as they are the actions of researchers.