This week, the President’s Cancer Panel published a new report entitled “Promoting Value, Affordability, and Innovation in Cancer Drug Treatment” that examines the price of cancer treatments in America and their value to the patients who need them. With health care costs on the rise, adopting an approach that rewards for quality – not quantity – is garnering support from stakeholders across the board. And as the Panel makes clear, the need to ensure drug prices are aligned with value is “urgent”:
“An ideal framework would integrate information on clinical outcomes, toxicities, impact on quality of life, and costs. It would inform negotiations between drug manufacturers and payers and also could guide development of value-based payment models and benefit designs that promote selection of high-value drugs by physicians and patients. Value assessments also could inform shared decision making among patients and providers and potentially improve patient outcomes,” the group writes.
This is a message that is consistent with what BIO has been saying for some time. In an opinion piece featured in The Hill, Jim Greenwood, BIO’s President and CEO, underscores the importance of a value-based model and discussed the need for expanding this approach across the entire health care system.
“Outcomes-based pricing is already happening”
For starters, Mr. Greenwood explains, doctors and hospitals are increasingly being paid not for the quantity of care they provide, but for the outcome or quality of care patients receive. Our health care system is shifting towards paying for what works, opposed to how much is administered.
“Future treatments will be more accessible and affordable”
Second, because drugmakers are accountable for patient outcomes, a value-based approach encourages insurers to ease coverage restrictions on more costly, innovative medicines. As a result, patients would have access to the affordable treatments they need and greater opportunity to enjoy healthier lives.
“This will bend the cost curve in health care”
Next, by ensuring future cures are accessible and patients adhere to their medications, value-based pricing will lower the trajectory of health care spending. By keeping patients out of the hospital and away for unnecessary doctor visits, we can lower health care costs for everyone.
“Outdated federal policies are standing in the way”
And finally, providing more legal and regulatory flexibility will help expand the use of outcomes-based drug pricing, and more importantly, advance patient health by providing better access to the treatments they need.
While value measurement in health care is not a new concept, groups like the Institute for Clinical and Economic Review (ICER) – who claim to be early advocates for this process – have also proven to lack sufficient input from third-party validators and have not been fully transparent. Echoing similar concerns raised by BIO, the President’s Cancer Panel writes:
“Limitations noted for one or more of these frameworks include lack of patient-centeredness, lack of systemwide perspective, inadequate provisions for updates as new data are obtained, lack of transparency about methodologies, and failure to engage all stakeholders.”
BIO welcomes the efforts by the President’s Cancer Panel and its emphasis to adopt an approach to health care pricing focused on value – not volume. That’s why we continue to highlight the work of the Innovation and Value Initiative (IVI), which recently introduced its Open-Source Value Project. This transparent and holistic approach for assessing value in health care puts patients first, allows for a broad range of perspectives, incorporates the latest available evidence, and considers the full range of scientifically defensible approaches. The promotion of market-based policies will help ensure patients have access to affordable, innovative medicines they need.