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  • Writer's pictureAventria Health Group

It’s happening now: How payers and providers are revisiting pharma value

“One of the very worst uses of time and money is to do something very well that need not to be done at all.” 

It’s not exactly breaking news, but let’s just get this on the table: To be the most efficient, start with the endgame and work backwards. If the endgame in question is proving your product’s value over the standard of care or competitors, then step one is to nail down exactly how your customers will evaluate your product. In other words, what value framework will your customers use to determine the costs and benefits of your brand? Documented, open-source value frameworks in the US are still relatively new. But make no mistake even though cross-industry collaborations have only been around since about 2015, there have always been, and still are, frameworks to evaluate value. The frameworks were and are just built internally at each organization and kept a secret.

And that’s why recent reveals of cross-industry value frameworks are so tantalizing, or at least tantalizing to those of us who specialize in proving value. Published frameworks are like brightly lit value roadmaps—roadmaps showing terrain that has always been cloaked in some pretty heavy shadows.

But here’s another provocative factor to consider about value frameworks: their use is on the rise. Increasing numbers of decision-makers are saying they are using publicly available frameworks to make formulary decisions, negotiate pricing or use as a basis for risk-based/innovative contracts. Even more tangibly, CMS has signaled a desire to move to value-based purchasing tools in Medicare Part B.

Established value frameworks definitely have their differences, but as Tomas J. Philipson and Jason Shafrin point out they tend to have 4 primary steps:

  • Selecting health outcomes of interest

  • Identifying a relevant evidence base to identify the impact of treatment on the outcomes of interest

  • Aggregating the outcomes into a single measure of health benefit

  • Calculating the cost of care and comparing it to health benefit

For example, here’s a diagram of the value framework used by ICER:

Despite these similarities, frameworks calculate value differently and from different perspectives. ASCO, for example, measures value from the patient and provider perspective, whereas ICER measures value from the lens of a payer/organized provider.

As a typical output, these value frameworks classify therapies into high-, medium-, and low-value interventions. Some frameworks (such as ICER’s, for example) recommend the price threshold for an intervention/product to be considered high value.

Prominent value frameworks to be aware of now:


Links to worthwhile information about value frameworks:

The Institute for Clinical and Economic Review (ICER) value framework overview. ICER is an international non-profit focused on clinical and economic reviews: The ICER value framework can be applied to any therapeutic category.

What the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) has been up to:

Also for oncology, if you go to the Drug Abacus from the Memorial Sloan-Kettering Cancer Centers, you’ll find a nifty calculator to see if your drug is priced for high value (or not).

Avalere and Faster Cures have a value framework in the works: Patient Perspective Value Framework Initiative.

But not everyone is a wild fan. Here’s a critical point-of-view.


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