Health Technology Assessment With Diminishing Returns to Health: The Generalized Risk-Adjusted Cost-Effectiveness (GRACE) Approach

Cost-Effectiveness of Lovotibeglogene Autotemcel (Lovo-Cel) Gene Therapy for Patients with Sickle Cell Disease and Recurrent Vaso-Occlusive Events in the United States

BACKGROUND AND OBJECTIVE

Gene therapies for sickle cell disease (SCD) may offer meaningful benefits for patients and society. This study evaluated the cost-effectiveness of lovotibeglogene autotemcel (lovo-cel), a one-time gene therapy administered via autologous hematopoietic stem cell transplantation, compared with common care for patients in the United States (US) with SCD aged ≥ 12 years with ≥ 4 vaso-occlusive events (VOEs) in the past 24 months.

METHODS

We developed a patient-level simulation model accounting for lovo-cel and SCD-related events, complications, and mortality over a lifetime time horizon. The pivotal phase 1/2 HGB-206 clinical trial (NCT02140554) served as the basis for lovo-cel efficacy and safety. Cost, quality-of-life, and other clinical data were sourced from HGB-206 data and the literature. Analyses were conducted from US societal and third-party payer perspectives. Uncertainty was assessed through probabilistic sensitivity analysis and extensive scenario analyses.

RESULTS

Patients treated with lovo-cel were predicted to survive 23.84 years longer on average (standard deviation [SD], 12.80) versus common care (life expectancy, 62.24 versus 38.40 years), with associated discounted patient quality-adjusted life-year (QALY) gains of 10.20 (SD, 4.10) and direct costs avoided of $1,329,201 (SD, $1,346,446) per patient. Predicted societal benefits included discounted caregiver QALY losses avoided of 1.19 (SD, 1.38) and indirect costs avoided of $540,416 (SD, $262,353) per patient. Including lovo-cel costs ($3,282,009 [SD, $29,690] per patient) resulted in incremental cost-effectiveness ratios of $191,519 and $124,051 per QALY gained from third-party payer and societal perspectives, respectively. In scenario analyses, the predicted cost-effectiveness of lovo-cel also was sensitive to baseline age and VOE frequency and to the proportion of patients achieving and maintaining complete resolution of VOEs.

CONCLUSIONS

Our analysis of lovo-cel gene therapy compared with common care for patients in the US with SCD with recurrent VOEs estimated meaningful improvements in survival, quality of life, and other clinical outcomes accompanied by increased overall costs for the health care system and for broader society. The predicted economic value of lovo-cel gene therapy was influenced by uncertainty in long-term clinical effects and by positive spillover effects on patient productivity and caregiver burden.

Comparing Preferences for Disease Profiles: A Discrete Choice Experiment from a US Societal Perspective

OBJECTIVES

There is increasing interest in expanding the elements of value to be considered when making health policy decisions. To help inform value frameworks, this study quantified preferences for disease attributes in a general public sample and examined which combination of attributes (disease profiles) are considered most important for research and treatment.

METHODS

A discrete choice experiment (DCE) was conducted in a US general population sample, recruited through online consumer panels. Respondents were asked to select one of a set of health conditions they believed to be most important, characterized by attributes defined by a previous qualitative study: onset age; cause of disease; life expectancy; caregiver requirement; symptom burden (characterized by the Health Utilities Index with varying levels of ambulation independence, dexterity limitations, and degree of pain and discomfort); and disease prevalence. A fractional factorial DCE design was implemented using R, and 60 choice sets were generated (separated into blocks of 10 per participant). Data were analyzed using a mixed-logit regression model, and results used to assess the likelihood of preferring disease profiles. Based on individual attribute preferences, overall preferences for disease profiles, including a profile aligned with Duchenne muscular dystrophy (DMD), were compared.

RESULTS

Fifty-two percent of respondents (n = 537) were female, and 70.6% were aged 18-54 years. Attributes considered most important were those related to life expectancy (odds ratio [OR], 95% confidence interval [CI] 1.88 [1.56-2.27] for a 50% reduction in remaining life expectancy vs no impact), and symptom burden (OR [95% CI] 1.84 [1.47-2.31] for severe vs mild burden). Greater importance was also found for pediatric onset, caregiver requirement, and diseases affecting more people. As an example of disease profile preferences, a DMD-like pediatric inherited disease with 50% reduction in life expectancy, extensive caregiver requirement, severe symptom burden, and 1:5000 prevalence had 2.37-fold higher odds of being selected as important versus an equivalent disease with adult onset and no life expectancy reduction.

CONCLUSIONS

Of disease attributes included in this DCE, respondents valued higher prevalence of disease, life expectancy and symptom burden as most important for prioritizing research and treatment. Based on expressed attribute preferences, a case study of an inherited pediatric disease involving substantial reductions to length and quality of life and requiring caregiver support has relatively high odds of being identified as important compared to diseases reflecting differing attribute profiles. These findings can help inform expansions of value frameworks by identifying important attributes from the societal perspective.

Can Generalized Cost-effectiveness Analysis Leverage Meaningful Use of Novel Value Elements in Pharmacoeconomics to Inform Medicare Drug Price Negotiation?

OBJECTIVES

Decision makers considering using cost-effectiveness analysis (CEA) to inform health-technology assessment must contend with documented and controversial shortfalls of CEA, including its assumption of disease severity independence and static pricing. ISPOR has recently introduced novel value elements besides direct healthcare cost and effectiveness for the patient, and these should be captured in CEA. Although novel value elements advance our understanding of "what" should be measured (value of hope, severity of disease, health equity, etc), there is limited direction on "how" to measure them in conventional CEA. Furthermore, with Medicare empowered to set drug prices under the Inflation Reduction Act, it is not clear what role CEA might have on where prices are set, given objections to the quality-adjusted life year in conventional approaches.

METHODS

We critically reviewed the evidence for expanding conventional CEA methods to a more generalized approach of generalized CEA (GCEA).

RESULTS

GCEA accounts for methods that address objections to the quality-adjusted life year and incorporate novel value elements. Although GCEA offers advantages, it also requires further research to develop "off-the-shelf" resources to help inform, for example, maximum fair price in the context of Medicare drug price negotiation.

CONCLUSIONS

Should a shift toward GCEA reveal that the societal value of novel medicines exceeds their market-based costs, which will raise the key question of what market failure Medicare negotiation is meant to solve, if any, and therefore what the appropriate role of such negotiation might be to maximize the value society might garner from the development of novel medicines.

Risk preferences over health: Empirical estimates and implications for medical decision-making

Mainstream health economic theory implies that an expected gain in health-related quality of life (HRQoL) produces the same value for consumers, regardless of baseline health. Several strands of recent research call this implication into question. Generalized Risk-Adjusted Cost-Effectiveness (GRACE) demonstrates theoretically that baseline health status influences value, so long as consumers are not risk-neutral over health. Prior empirical literature casts doubt on risk-neutral expected utility-maximization in the health domain. We estimate utility over HRQoL in a nationally representative U.S. population and use our estimates to measure risk preferences over health. We find that individuals are risk-seeking at low levels of health, become risk-averse at health equal to 0.485 (measured on a 0-1 scale), and are most risk-averse at perfect health (coefficient of relative risk aversion = 4.51). We develop the resulting implications for medical decision making, cost-effectiveness analyses, and the proper theory of health-related decision making under uncertainty.

A principled approach to non-discrimination in cost-effectiveness

The US Inflation Reduction Act (IRA) prohibits the Centers for Medicare and Medicaid Services (CMS) from using standard quality-adjusted life-years or other value assessment methods that discriminate against the aged, terminally ill, or disabled when setting maximum fair prices for prescription drugs. This policy has reignited interest in methods for assessing value without discrimination. Equal value of life-years gained (EVL), healthy years in total (HYT), and Generalized Risk-Adjusted Cost-Effectiveness (GRACE) have emerged as proposals. Neither EVL nor HYT rests on well-articulated microeconomic foundations. We show that they produce decisions that are inconsistent over time in a variety of ways, including: (1) failure to support additivity and indirect comparison in cases where the standard-of-care therapy changes over time; (2) strictly negative value of survival gains that accrue from a new, better standard-of-care, particularly for the disabled themselves; (3) unbounded average value of survival gains; and (4) non-convex survival preferences. We propose an alternative method that relies on GRACE and its microeconomic foundations.

Values Beyond "Health" in Budget-Constrained Healthcare Systems

OBJECTIVES

Most current methods to value healthcare treatments only incorporate measures such as quality-adjusted life-years, combining gains in health-related quality of life and life expectancy in specific ways. Failure of these methods to recognize other dimensions of value has led to calls for methods to include additional values that are associated with the healthcare treatments but not captured directly by quality-adjusted life-years. This article seeks to provide methodologically sound ways to incorporate additional health-related outcomes, focusing on budget-constrained healthcare systems, in which using standard welfare economics methods are often eschewed.

METHODS

The analysis develops standard extra-welfarist approaches to maximizing aggregate health, subject to fixed-budget constraints, using Lagrange multiplier methods. Then, additional valuable health-related outcomes, eg, reduced caregiver burden, real option value, and market- and non-market productivity are introduced. The article also introduces a social welfare function approach to illuminate how disability, disease severity and other equity-related issues can be incorporated into complete welfare measures.

RESULTS

Resulting analysis, fully developed in an Appendix in Supplemental Materials found at https://doi.org/10.1016/j.jval.2024.02.005 and summarized in the main text, show that understanding how average and marginal healthcare costs increase with output and how health augments "additional values" provides ways to assess willingness to pay for them in these fixed-budget situations.

CONCLUSIONS

In budget-constrained healthcare systems, only from actual budget allocations can values both of health itself and "additional values" be inferred. These methods, combined with methodologically sound social welfare functions, demonstrate how to move from "health" to "welfare" in measuring the value of increased healthcare use.

Incorporating Real Option Value in Valuing Innovation: A Way Forward

BACKGROUND

Considerable progress has been made in defining and measuring the real option value (ROV) of medical technologies. However, questions remain on how to estimate (1) ROV outside of life-extending oncology interventions; (2) the impact of ROV on costs and cost effectiveness; and (3) potential interactions between ROV and other elements of value.

METHODS

We developed a 'minimal modeling' approach for estimating the size of ROV that does not require constructing a full, formal cost-effectiveness model. We proposed a qualitative approach to assessing the level of uncertainty in the ROV estimate. We examined the potential impact of ROV on the incremental cost-effectiveness ratio as well as on the potential interactions between ROV and other elements of value. Lastly, we developed and presented a 15-item checklist for reporting ROV in value assessment.

RESULTS

The minimal modeling approach uses estimates on the efficacy of current treatment and potential future innovation, as well as success rate and length of new treatment development, and can be applied to all types of ROV across disease areas. ROV may interact with the conventional value, value of hope, productivity effects, and insurance value. The impact of ROV on cost effectiveness can be evaluated via threshold analysis.

CONCLUSION

The minimal modeling approach and the checklist developed in this paper simplifies and standardizes the estimation and reporting of ROV in value assessment. Systematically including and reporting ROV in value assessment will minimize bias and improve transparency, which will help improve the credibility of ROV research and acceptance by stakeholders.

Alternative approaches to measuring value: an update on innovative methods in the context of the United States Medicare drug price negotiation program

INTRODUCTION

The United States has begun assessing the value of pharmaceuticals to inform negotiated prices in the Medicare program. Given strong political objections in the United States to the use of QALYs, Medicare will need to adopt an alternative approach to measuring value.

AREAS COVERED

In this narrative review, we identified six alternative approaches to measuring value (equal value life-years, health years in total, generalized risk-adjusted cost-effectiveness, severity weighting based on absolute or proportional shortfall, comparative effectiveness based on conventional clinical endpoints, and comparative effectiveness based on both conventional endpoints and patient-centric value elements) and five criteria for assessing these approaches (responsiveness to concerns about discrimination, feasibility, transparency, flexibility, and the ability to incorporate factors beyond traditional value elements).

EXPERT OPINION

Four of the alternatives are broadly aligned with the cost-effectiveness framework, but none fully addresses all aspects of the stated concerns that QALYs may be used to unintentionally implement discrimination. We note, however, that the extent to which these concerns lead to discrimination in practice is unknown. Finally, we recommend an approach for measuring value in terms of comparative effectiveness that combines quantitative ranking and weighting of distinct criteria (including patient-centric value elements) with deliberation.

Methodological challenges and potential solutions for economic evaluations of palliative and end-of-life care: A systematic review

BACKGROUND

Given the increasing demand for palliative and end-of-life care, along with the introduction of costly new treatments, there is a pressing need for robust evidence on value. However, comprehensive guidance is missing on methods for conducting economic evaluations in this field.

AIM

To identify and summarise existing information on methodological challenges and potential solutions/recommendations for economic evaluations of palliative and end-of-life care.

DESIGN

We conducted a systematic review of publications on methodological considerations for economic evaluations of adult palliative and end-of-life care as per our PROSPERO protocol CRD42020148160. Following initial searches, we conducted a two-stage screening process and quality appraisal. Information was thematically synthesised, coded, categorised into common themes and aligned with the items specified in the Consolidated Health Economic Evaluation Reporting Standards statement.

DATA SOURCES

The databases Medline, Embase, HTADatabase, NHSEED and grey literature were searched between 1 January 1999 and 5 June 2023.

RESULTS

Out of the initial 6502 studies, 81 were deemed eligible. Identified challenges could be grouped into nine themes: ambiguous and inaccurate patient identification, restricted generalisability due to poor geographic transferability of evidence, narrow costing perspective applied, difficulties defining comparators, consequences of applied time horizon, ambiguity in the selection of outcomes, challenged outcome measurement, non-standardised measurement and valuation of costs as well as challenges regarding a reliable preference-based outcome valuation.

CONCLUSION

Our review offers a comprehensive context-specific overview of methodological considerations for economic evaluations of palliative and end-of-life care. It also identifies the main knowledge gaps to help prioritise future methodological research specifically for this field.

Multistakeholder Perceptions of Additional Value Elements for United States Value Assessment of Health Interventions

OBJECTIVES

Limitations in conventional cost-effectiveness methods have led to calls for incorporation of additional value elements in assessments of health technologies. However, gaps remain in how additional value elements may inform decision making. This study aimed to prioritize additional value elements from the perspective of healthy individuals without a specific condition or indicated for a specific treatment in the United States among a multistakeholder panel and compare the importance of perspective-specific value elements.

METHODS

Additional value elements were prioritized in 2 phases: (1) we identified and categorized additional value elements in a targeted literature review, and (2) we convened a multistakeholder group-based preference elicitation study (N = 28) to evaluate the description of each value element and rank and generate normalized weights of each value element for its significance in value assessment. The importance of additional value elements was also weighted relative to patient-centric value elements.

RESULTS

The rank and weight of contextual value elements among 28 stakeholders were "severity of the disease" (26.2%), "disadvantaged and vulnerable target populations highly represented" (21.8%), "broader economic impact" (17.3%), "risk protection" (13.8%), "rarity of the disease" (11.3%), and "novel mechanism of action" (9.7%). Relative weight of the additional value elements versus patient-centric value elements was 52% and 48%, respectively.

CONCLUSIONS

Study findings may inform priority setting for value frameworks and emerging US government assessments. The group-based elicitation method is repeatable and useful for structured deliberative processes in value assessment and may help improve the consistency and predictability of what is important to stakeholders.

On the (Near) Equivalence of Welfarist and Extra-Welfarist Methods to Value Healthcare With Implications for Assessing Equity

OBJECTIVES

While welfarist economics (WE) methods rely wholly on individuals' valuations, extra-welfarist (EW) methods seek alternative measures of value. Major reviews of the EW literature conclude that EW studies almost universally replace "utility" with "health" as the maximand. This analysis seeks to understand what conclusions are necessary and sufficient to make EW and WE methods concurrent and discusses implications for measuring social value.

METHODS

Using standard WE methods, I demonstrate that EW is equivalent to WE with 2 key restrictions-individuals have constant returns to health in producing utility and health budgets are fixed. Fixing budgets removes a key WE step, determining the marginal rate of substitution between consumption and health, the willingness to pay for health gains.

RESULTS

Because EW methods equate with WE with these 2 restrictions, I show how formal models to construct aggregated social welfare functions (SWFs) in WE frameworks lead directly to SWF models using EW models of value. I also show that, in fixed-budget health systems, when SWFs place different values for improving health of different subpopulations, aggregate health output fails as a SWF criterion. I demonstrate how different societal values can and should enter EW SWF models using WE criteria. I also discuss the implications when either of these key restrictions does not properly represent people's preferences.

CONCLUSIONS

Once EW methods are shown to be a restricted form of WE methods, those WE methods can illuminate how best to measure SWFs in EW environments.

Methods to Adjust Willingness-to-Pay Measures for Severity of Illness

OBJECTIVES

Both private sector organizations and governmental health agencies increasingly use illness severity measures to adjust willingness-to-pay thresholds. Three widely discussed methods-absolute shortfall (AS), proportional shortfall (PS), and fair innings (FI)-all use ad hoc adjustments to cost-effectiveness analysis methods and "stair-step" brackets to link illness severity with willingness-to-pay adjustments. We assess how these methods compare with microeconomic expected utility theory-based methods to value health gains.

METHODS

We describe standard cost-effectiveness analysis methods, the basis from which AS, PS, and FI make severity adjustments. We then develop how the Generalized Risk Adjusted Cost Effectiveness (GRACE) model assesses value for differing illness and disability severity. We compare AS, PS, and FI against value as defined by GRACE.

RESULTS

AS, PS, and FI have major and unresolved differences between them in how they value various medical interventions. Compared with GRACE, they fail to properly incorporate illness severity or disability. They conflate gains in health-related quality of life and life expectancy incorrectly and confuse the magnitude of treatment gains with value per quality-adjusted life-year. Stair-step methods also introduce important ethical concerns.

CONCLUSIONS

AS, PS, and FI disagree with each other in major ways, demonstrating that at most, one correctly describes patients' preferences. GRACE offers a coherent alternative, based on neoclassical expected utility microeconomic theory, and can be readily implemented in future analyses. Other approaches that depend on ad hoc ethical statements have yet to be justified using sound axiomatic approaches.

Assessing the value of delandistrogene moxeparvovec (SRP-9001) gene therapy in patients with Duchenne muscular dystrophy in the United States

Background: Delandistrogene moxeparvovec (SRP-9001) is an investigational gene therapy that may delay progression of Duchenne muscular dystrophy (DMD), a severe, rare neuromuscular disease caused by DMD gene mutations. Early cost-effectiveness analyses are important to help contextualize the value of gene therapies for reimbursement decision making. Objective: To determine the potential value of delandistrogene moxeparvovec using a cost-effectiveness analysis. Study design: A simulation calculated lifetime costs and equal value of life years gained (evLYG). Inputs included extrapolated clinical trial results and published utilities/costs. As a market price for delandistrogene moxeparvovec has not been established, threshold analyses established maximum treatment costs as they align with value, including varying willingness-to-pay up to $500,000, accounting for severity/rarity. Setting: USA, healthcare system perspective Patients: Boys with DMD Intervention: Delandistrogene moxeparvovec plus standard of care (SoC; corticosteroids) versus SoC alone Main outcome measure: Maximum treatment costs at a given willingness-to-pay threshold Results: Delandistrogene moxeparvovec added 10.30 discounted (26.40 undiscounted) evLYs. The maximum treatment cost was approximately $5 M, assuming $500,000/evLYG. Varying the benefit discount rate to account for the single administration increased the estimated value to #$5M, assuming $500,000/evLYG. Conclusion: In this early economic model, delandistrogene moxeparvovec increases evLYs versus SoC and begins to inform its potential value from a healthcare perspective.

Cost-effectiveness of camrelizumab plus chemotherapy versus chemotherapy alone as first-line therapy in advanced or metastatic esophageal squamous cell carcinoma

OBJECTIVE

Camrelizumab combination therapy for advanced or metastatic esophageal squamous cell carcinoma (ESCC) has considerable survival benefits. This study investigated the cost-effectiveness of camrelizumab combination therapy versus chemotherapy alone as a first-line treatment for patients with ESCC from the perspective of the Chinese healthcare system.

METHODS

A three-state partitioned survival model was developed to estimate total costs, life years (LYs), quality-adjusted life years (QALYs), incremental cost-effectiveness ratios (ICERs) and incremental net health benefits (INHBs) over a 20-year time horizon. Sensitivity and scenario analyses were also performed.

RESULTS

Camrelizumab plus chemotherapy increased QALYs by 0.30 (0.43 LYs), with an incremental cost of $9,272. The ICERs for camrelizumab plus chemotherapy vs chemotherapy alone was $31,062/QALY ($21,599/LY), and the INHB was 0.05 QALY at the cost-effective threshold of $37,653/QALY (3 times China's GDP per capita). One-way sensitivity analyses showed that the ICER was the most sensitive to utility values in the PFS state. Probabilistic sensitivity analyses suggested that camrelizumab combination therapy had a probability of 74.04% cost-effectiveness at a threshold of $37,653/QALY. Scenario analyses confirmed that the findings were robust.

CONCLUSIONS

Camrelizumab combination therapy is likely to have a cost-effectiveness advantage over chemotherapy alone for previously untreated advanced or metastatic ESCC in China.

How are health technology assessment bodies responding to the assessment challenges posed by cell and gene therapy?

BACKGROUND

The aims of this research were to provide a better understanding of the specific evidence needs for assessment of clinical and cost-effectiveness of cell and gene therapies, and to explore the extent that the relevant categories of evidence are considered in health technology assessment (HTA) processes.

METHODS

A targeted literature review was conducted to identify the specific categories of evidence relevant to the assessment of these therapies. Forty-six HTA reports for 9 products in 10 cell and gene therapy indications across 8 jurisdictions were analysed to determine the extent to which various items of evidence were considered.

RESULTS

The items to which the HTA bodies reacted positively were: treatment was for a rare disease or serious condition, lack of alternative therapies, evidence indicating substantial health gains, and when alternative payment models could be agreed. The items to which they reacted negatively were: use of unvalidated surrogate endpoints, single arm trials without an adequately matched alternative therapy, inadequate reporting of adverse consequences and risks, short length of follow-up in clinical trials, extrapolating to long-term outcomes, and uncertainty around the economic estimates.

CONCLUSIONS

The consideration by HTA bodies of evidence relating to the particular features of cell and gene therapies is variable. Several suggestions are made for addressing the assessment challenges posed by these therapies. Jurisdictions conducting HTAs of these therapies can consider whether these suggestions could be incorporated within their existing approach through strengthening deliberative decision-making or performing additional analyses.

The Broader Opportunity Costs in the Broader Cost-Effectiveness Analysis Framework

BACKGROUND

The traditional cost-effectiveness analysis framework usually takes a healthcare system perspective, where the aim is to maximise population health from a fixed budget allocated to healthcare. Extensions to this framework have been suggested, including: (i) incorporating impacts that fall outside the healthcare sector; (ii) accounting for outcomes beyond health; and (iii) assessing equity considerations. Several alternatives have been proposed that serve these purposes, for example, the extended "impact inventory", the "beyond-the-QALY" approach and the distributional cost-effectiveness analysis.

OBJECTIVE

This paper aims to develop a comprehensive framework that incorporates into the cost-effectiveness analysis framework some of its most advocated extensions and provides a means of arriving at a unidimensional cost-effectiveness analysis result measure.

METHODS

Building on previous work, I proposed a framework that explicitly incorporates the full extent of the opportunity costs that arise when new dimensions and distributional concerns are included in cost-effectiveness analyses. A hypothetical example is provided as a way of illustration.

RESULTS

Operationalising the proposed framework requires system-wide representative values and/or robust estimates concerning: (i) selecting dimensions; (ii) measuring opportunity costs associated with each dimension; (iii) quantifying equity weights and percentages of beneficiaries and losers meeting equity considerations; and (iv) attaching monetary values to dimensions measured using a non-monetary metric.

CONCLUSIONS

Extending the cost-effectiveness analysis framework entails extending the measurement of the opportunity costs of funding decisions. This implies populating an ambitious puzzle that in some cases poses fundamental conceptual and empirical questions. Potential routes of further research that might facilitate such undertaking are proposed.

The impact of conventional cost-effectiveness analysis on pricing dynamics in the market of new medicines: a proposed countervailing approach

BACKGROUND

Countries using cost effectiveness ratio as a decision tool for price and reimbursement decisions still witness accelerating price increases. The objective of this paper is to propose a change in the application of the incremental cost effectiveness ratio as a criterion for price policy.

RESEARCH DESIGN

We develop a model that sets a price for marginal effectiveness equal to the marginal willingness to pay, but it reimburses average effectiveness according to the size of increased QALY gain.

RESULTS

This new formula also allows to split the economic value of drug between patients and the industry and creates a reward to invest into QALY gains. We show some empirical data of the new prices derived from the application of the new formula, as well as the implications in terms of the consumer and manufacturer´s surplus based on two potential scenarios of the incentives generated by this new formulation.

DISCUSSION

We propose that small increases in life expectancy be priced differently from substantial as a way of containing the price dynamics.

CONCLUSIONS

A change in the application of the ICER threshold will help to reduce the price pressure on public budgets.

Framework for Patient Experience Value Elements in Rare Disease: A Case Study Demonstrating the Applicability of Combined Qualitative and Quantitative Methods

BACKGROUND AND OBJECTIVE

Several novel methods have been suggested to extend a conventional value assessment to capture a more comprehensive perspective of value from a patient perspective. The objective of this research was to demonstrate a framework for implementing a combined qualitative and quantitative method to elicit and prioritize patient experience value elements in rare diseases. Neuromyelitis optica spectrum disorder was used as a case study.

METHODS

The method for eliciting and prioritizing patient experience value elements involved a three-step process: (1) collecting potential patient experience value elements from existing literature sources followed by deliberation by a multi-stakeholder research team; (2) a pre-workshop webinar and survey to identify additional patient-reported value elements; and (3) a workshop to discuss, prioritize the value elements using a swing weighting method. Outcomes were prioritized value elements with normalized weights for patients considering a treatment for neuromyelitis optica spectrum disorder.

RESULTS

A literature review and deliberation resulted in the following initial value elements: ability to reach important personal milestones, patient's financial burden, value of hope/balance or timing of risks and benefits, Uncertainty about long-term benefits and safety of the treatment, Patient empowerment through therapeutic advancement and technology, Caregiver/family's financial burden, patient experience related to treatment regimen, Therapeutic options, and Caregiver/family's quality of life. Eight patients with neuromyelitis optica spectrum disorder participated in the case study. In the online survey, participants found the nine proposed patient experience value elements both understandable and important with no additions. During the workshop, 'Uncertainty about long-term benefits and safety,' 'Patient experience related to treatment regimen,' and 'Patient's financial burden' were found to be the most important patient experience value elements, with a respective weight of 25%, 19.2%, and 14.4% (out of total 100%).

CONCLUSIONS

This case study provides a framework for eliciting and prioritizing patient experience value elements using direct patient input. Although elements/weights may differ by disease, and even in neuromyelitis optica spectrum disorder, additional research is needed, value frameworks, researchers, and manufacturers can use this practical method to generate patient experience value elements and evaluate their impact on treatment selection.

The Zero-Price Conundrum: Exploration of Scenarios Where a Clinically Effective New Drug Might Not Be Cost-Effective at Zero Price

OBJECTIVES

The zero-price conundrum occurs when a clinically effective drug can justify no greater than a price of zero based on cost-effectiveness criteria from a health system perspective. This is relevant for health systems that require evidence of cost-effectiveness, in addition to safety and efficacy for drug approval and other analyses that may shape drug coverage policies, such as budget impact and comparative effectiveness. This study aimed to clarify and explore the zero-price conundrum to provide a resource in the development of practical and methodological solutions.

METHODS

We specified equations representing previously identified zero-price scenarios and used them to elucidate factors contributing to the zero-price conundrum and explore relationships between them. We present real-world considerations and discuss solutions from the literature.

RESULTS

The analyses demonstrated that a primary cause of the zero-price problem for a new drug that increases quality-adjusted survival pertains to healthcare costs beyond the influence of the new drug, specifically, disease background costs, costs of existing drugs used in a combination regimen, and costs of future health interventions patients may become eligible to receive. Pragmatic solutions have been to exclude such costs from cost-effectiveness analyses. Proposed modifications to cost-effectiveness analysis include assessing each drug in a combination regimen based on its relative contribution to improved health.

CONCLUSIONS

The zero-price dilemma may arise more frequently as the number of drugs in high-cost disease areas continues to grow. As cost-effectiveness methods evolve, there is the opportunity to develop robust solutions that can be applied consistently.

Value-Based Pricing for Patent-Protected Medicines Over the Product Life Cycle: Pricing Anomalies in the "Age of Cures" and Their Implications for Dynamic Efficiency

OBJECTIVES

Conventional cost-effectiveness analysis (CEA) for the value-based pricing of new medicines largely ignores the implications of limited market exclusivity (ie, patent-protection periods plus any exclusivity granted by regulators). This paper explores the implications of this methodological shortcoming, which produces several pricing anomalies with potentially unintended effects on research and development (R&D) incentives.

METHODS

We illustrate these implications by comparing 4 stylized examples of increasing complexity, from short-term cures for acute conditions to long-term cures for rare, health-catastrophic conditions.

RESULTS

(1) Conventional-CEA will project a different result than an adjusted CEA that considers generic or biosimilar entry; (2) free and flexible pricing of long-term treatments (eg, statins for hypercholesterolemia) or repeated-dose cures (eg, insulin for type 1 diabetes) for chronic conditions will likely result in predictable price increases at the end of the exclusivity period that may be perceived as unjustified or unsupported; and (3) one-time administration "cures" (eg, gene therapy for spinal muscular atrophy) have the potential to allocate a large share of the social surplus to the manufacturer over the product lifetime, which may or may not be dynamically efficient per se, but may also inadvertently disadvantage the development of valuable long-term treatments or repeated-dose cures for chronic conditions.

CONCLUSIONS

We highlight the need for additional research on long-term solutions to these issues that would aim to promote dynamically efficient global R&D. More work is needed on the following: (1) relationships between social surplus allocation and the amount and composition of global R&D, as we may be as likely to be encouraging excessive R&D in some areas as to be undersupplying it in others; and (2) relating the size of the surplus reward to R&D cost and, thus, the return on investment.

Incorporating risk preferences of patients in the valuation of immune checkpoint inhibitors for non-small cell lung cancer

Immunotherapy offers a distinctive mechanism of action compared to traditional treatments, arising from additional value dimensions that may not be captured in standard health technology assessments. Cancer patients may have the expectation that immunotherapy provides durable, long-term survival gains. Moreover, some patients may be willing to take a 'risk' to undergo immunotherapy to achieve better survival outcomes. We reviewed quantitative methods that explored patients' risk preferences in their non-small cell lung cancer (NSCLC) treatment choices, in PubMed (MEDLINE), from January 1, 2015, until July 1, 2022. The consideration of a value dimension ('hope') based on patients' risk-seeking preferences is specifically addressed for the valuation of immune checkpoint inhibitors in NSCLC. We reported that the quantitative methods that aim to measure patients' risk preferences or 'hope' empirically are emerging. Value assessments should not only comprise survival improvements for the mean or median patient but also consider methods that reflect durable, long-term overall survival gains for risk-seeking patients. However, the published evidence for incorporating 'hope' based on patients' stated preferences for uncertain treatment profiles is not strong, and future research could strengthen this evidence base. We encourage further research on the development and validation of quantification methods to incorporate 'hope' and risk preferences of patients treated with immunotherapy for NSCLC and beyond.

Toward comprehensive value assessment for Alzheimer's disease innovations

INTRODUCTION

Assessing medical technologies for Alzheimer's disease (AD) creates challenges for current methods of value assessment. New value assessment approaches for AD are also needed.

METHODS

We adapted concepts from health economics to help guide decision makers to more informed decisions about AD therapies and diagnostics.

RESULTS

We propose a value framework based on five categories: perspective, value elements, analysis, reporting, and decision making. AD value assessments should include the perspective of the patient-caregiver dyad. We propose a broader array of value elements than currently used. Analytics and decision methods can synthesize evidence for all elements of value. Decisions should use a "deliberative appraisal" approach informed by the composite evidence and be transparently reported.

DISCUSSION

Using the proposed framework, the value of forthcoming innovations for AD may be more thoroughly assessed for and by all stakeholders. It can guide decision makers to carefully consider all relevant elements of value contributing to more holistic and transparent decision making.

RESEARCH HIGHLIGHTS

Alzheimer's disease challenges common methods of evaluating medical technology. Using current methods, new AD innovations might not be appropriately valued. Poor value assessments will adversely affect patient access to AD innovations. A full AD value framework expands perspective, elements, analysis, decision-making, reporting.

Considering Severity in Health Technology Assessment: Can We Do Better?

There is strong evidence that individuals and the public assign relatively greater value to health gains from relatively more severe health states. This preference is increasingly reflected in health technology assessment, with some consideration of severity incorporated by health technology assessment bodies in, among others, The Netherlands, England and Wales, Norway, Sweden, and the United States. If a societal "severity premium" is to be considered fairly and consistently, we argue that a more explicit and quantitative approach is needed. We highlight drawbacks of categorical approaches, especially discontinuities between severity categories that arguably violate concepts of vertical equity, and argue that a more continuous approach to understanding severity is needed. We also note challenges to more explicit approaches, including implications of a lower threshold for less severe conditions and the relative complexity of calculating a continuous severity adjustment.

Cost-Effectiveness of Tislelizumab Versus Docetaxel for Previously Treated Advanced Non-Small-Cell Lung Cancer in China

Background: Tislelizumab, a new high-affinity programmed cell death protein-1 (PD-1) inhibitor, significantly prolonged the overall survival in pretreated non-small-cell lung cancer (NSCLC). This study aimed to assess the cost-effectiveness of tislelizumab versus docetaxel for this population in China.

Methods: A three-state partitioned survival model was developed to simulate advanced NSCLC. Efficacy and safety data were based on a global phase 3 clinical trial (RATIONALE 303). Utilities were mainly extracted from previously published resources. Costs were calculated from the Chinese healthcare system’s perspective, and only direct medical costs were covered. The main outcomes included total costs, life years (LYs), quality-adjusted life years (QALYs), and incremental cost effectiveness ratio (ICER). One-way and probabilistic sensitivity analyses were carried to test the uncertainty of the modeling results. In addition, several scenarios including tislelizumab price before negotiation, different docetaxel price calculation, 50-year time horizon, and alternative utility values were assessed.

Results: The model predicted an average gain of 0.62 LYs and 0.51 QALY for tislelizumab vs. docetaxel, at the additional cost of $9,219. The resulting ICER was $15,033.92/LY and $18,122.04/QALY, both below the cost-effective threshold (CET) of three times gross domestic product (GDP) per capita in China. Sensitivity analyses showed that the results are robust over a plausible range for majority of inputs. Utility of progression-free survival (PFS), followed by the price of tislelizumab, had the greatest impact on the ICER. The probability of being cost-effective for tislelizumab was 96.79% at the CET we set.

Conclusion: Tislelizumab improves survival, increases QALYs, and can be considered a cost-effective option at current price compared with docetaxel for pretreated advanced NSCLC in China.

Assessing the value of orphan drugs using conventional cost-effectiveness analysis: Is it fit for purpose?

Conventional cost-effectiveness analysis—i.e., assessing pharmaceuticals through a cost per quality-adjusted life year (QALY) framework—originated from a societal commitment to maximize population health given limited resources. This "extra-welfarist" approach has produced pricing and reimbursement systems that are not well- aligned with the unique considerations of orphan drugs. This framework has been slow to evolve along with our increased understanding of the impact of rare diseases, which in turn has complicated the assessment of orphan drugs meant to treat rare diseases. Herein, we (i) discuss the limitations of conventional cost-effectiveness analysis as applied to assessing access to, as well as the pricing and reimbursement of, orphan drugs, (ii) critically appraise alternative and supplemental approaches, and (iii) offer insights on plausible steps forward.

A guide to extending and implementing generalized risk-adjusted cost-effectiveness (GRACE)

The generalized risk-adjusted cost-effectiveness (GRACE) model generalizes conventional cost-effectiveness analysis (CEA) by introducing diminishing returns to Health-Related Quality of Life (QoL). This changes CEA practice in three ways: (1) Willingness to pay (WTP) increases exponentially with untreated illness severity or pre-existing permanent disability, and WTP ends up lower for mild diseases but higher for severe diseases compared with conventional CEA; (2) Average treatment effectiveness should be adjusted for uncertainty in outcomes; and (3) The marginal rate of substitution between life expectancy and QoL varies with health state. Implementing GRACE requires new parameters describing risk preferences over QoL, the marginal rate of substitution between life expectancy (LE) and QoL, and the variance and skewness of treatment outcomes distributions. In this paper, we provide: (1) a generalized WTP threshold incorporating the possibility of permanent disability; (2) a simpler method to estimate the tradeoff rate between QoL and LE, eliminating the need to carry out treatment-by-treatment estimates; (3) a more-general method to adjust WTP for illness severity that permits non-constant relative risk-aversion in QoL; (4) a new approach to estimating risk-preferences over QoL, leveraging established empirical methods from "happiness" economics; and (5) a step-by-step guide for practitioners wishing to implement multi-period GRACE analyses.

The History and Future of the "ISPOR Value Flower": Addressing Limitations of Conventional Cost-Effectiveness Analysis

OBJECTIVES

Since its publication as part of the 2018 ISPOR Special Task Force (STF) on US Value Assessments, the "ISPOR value flower," with its petals highlighting elements that may be overlooked or underappreciated in conventional drug value assessments, has been discussed and debated. We review the history of the value flower, describe recent developments, and consider implications for future value assessments.

METHODS

We discuss various antecedents to the value flower, as well as conceptual and empirical articles published in the past 4 years.

RESULTS

Since the publication of the ISPOR STF report, researchers have provided more rigorous theoretical and mathematical foundations for certain novel value elements (eg, severity of illness, value of insurance, value of hope) through "generalized risk-adjusted cost-effectiveness analysis," which incorporates risk aversion in people's preferences and uncertainty in treatment outcomes. Empirical estimates are also emerging to support key elements, such as insurance value, real option value, value of hope, and value of knowing. Although health technology assessment bodies have applied or are considering certain elements (eg, severity modifiers to cost-effectiveness thresholds), other elements have yet to gain traction.

CONCLUSIONS

Five years after the STF began its work, the development of novel value measures continues to evolve. Although it is encouraging to see supporting empirical studies emerging, more are needed. Additional efforts are also needed to illustrate how the estimates can be used in the deliberative processes that are integral to health technology assessments.

QALYs and ambulatory status: societal preferences for healthcare decision making

BACKGROUND

This research aimed to review the theoretical and methodological aspects of the quality-adjusted life year (QALY) which give rise to potential for bias against certain patient populations, including those with problems with walking or an inability to walk (ambulatory disabilities), when health technology assessment decisions rely on QALY gain to show cost-effectiveness. Societal preferences for treating ambulatory versus non-ambulatory patients were also investigated.

METHODS

We reviewed published literature to identify information on theoretical underpinnings of the QALY, measurement of utilities for QALY assessment, and empirical evidence of societal preferences for the treatment of ambulatory and non-ambulatory patients.

RESULTS AND DISCUSSION

Health states which represent mobility impairment and the inability to walk receive low valuation from general public preferences. Non-ambulatory patients, for example those with advanced neuromuscular disease, have lower utilities determined by standardized preference-based measurement (PBM) tools. Any treatment that increases survival but could not restore ambulation would result in lower lifetime QALY gains for non-ambulatory versus ambulatory patients. Treatments could therefore potentially be deemed less cost-effective, or not cost-effective at all for this patient population.Empirical research indicates a societal preference for equal treatment of patients regardless of ambulatory status. The main limitation of our review was the non-systematic approach to evidence search and review, however, given the broad scope of content required to meet the aims of the review, we believe that the targeted approach was appropriate. The evidence presented in this article highlights the need for alternatives to strict QALY-based approaches to prevent avoidable health inequities when determining cost-effectiveness of healthcare interventions for non-ambulatory populations against fixed cost-effectiveness thresholds. An alternative metric, the Equal Value of Life Years Gained (evLYG), has been proposed as a supplementary measure for use alongside the QALY for its potential to alleviate bias against disabled patient populations during the assessment of healthcare treatments.

Principles of Economic Evaluation in a Pandemic Setting: An Expert Panel Discussion on Value Assessment During the Coronavirus Disease 2019 Pandemic

As the coronavirus disease 2019 (COVID-19) pandemic continues to generate significant morbidity and mortality as well as economic and societal impacts, the landscape of potential treatments has slowly begun to broaden. In the case of a novel disease with widespread consequences, society is more likely to place significant value on interventions that reduce the outsized economic burden of COVID-19. Treatments for severe disease will have a different value profile to that of large-scale vaccines because of their application in targeted and potentially small subsets of those with symptomatic disease vs broad deployment as a preventative measure. Where vaccines reduce transmissibility of COVID-19, use of therapeutics will target symptoms, up to and including death for infected individuals. This paper describes discussions from a virtual expert panel that met to attempt a consensus on how existing principles of economic evaluation should be applied to therapeutics that emerge in a pandemic setting, with specific focus on severe hospitalised cases of COVID-19. The panel concluded that the core principles of economic evaluation do not need to be drastically overhauled to meet the challenges of a pandemic, but that there are several additional elements of value such as equity, disease severity, insurance value, and scientific and family spillover effects that should be considered when presenting results to decision makers. The panel also highlighted the persistent challenges on how society should value novel therapies, such as the appropriate cost-effectiveness threshold to apply, which are particularly salient during a pandemic.

How Much Is a Human Life Worth? A Systematic Review

OBJECTIVES

To systematically review studies eliciting monetary value of a statistical life (VSL) estimates within, and across, different sectors and other contexts; compare the reported estimates; and critically review the elicitation methods used.

METHODS

In June 2019, we searched the following databases to identify methodological and empirical studies: Cochrane Library, Compendex, Embase, Environment Complete, Informit, ProQuest, PubMed, Scopus, and Web of Science. We used the Preferred Reporting Items for Systematic Reviews and Meta-analyses guidelines for reporting and a modified Consolidated Health Economic Evaluation Reporting Standards checklist to assess the quality of included studies.

RESULTS

We identified 1455 studies, of which we included 120 in the systematic review. A stated-preference approach was used in 76 articles, with 51%, 41%, and 8% being contingent valuation studies, discrete-choice experiments, or both, respectively. A revealed-preference approach was used in 43 articles, of which 74% were based on compensating-wage differentials. The human capital approach was used in only 1 article. We assessed most publications (87%) as being of high quality. Estimates for VSL varied substantially by context (sector, developed/developing country, socio-economic status, etc), with the median of midpoint purchasing power parity-adjusted estimates of 2019 US$5.7 million ($6.8 million, $8.7 million, and $5.3 million for health, labor market, and transportation safety sectors, respectively).

CONCLUSIONS

The large variation observed in published VSLs depends mainly on the context rather than the method used. We found higher median values for labor markets and developed countries. It is important that health economists and policymakers use context-specific VSL estimates. Methodological innovation and standardization are needed to maximize comparability of VSL estimates within, and across, sectors and methods.