Plenty of catching up to do today. Thanks for spending your Friday with me. Thank goodness it’s a bye week for the Hockey East-leading Terriers.
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I’ve made reference to this paper a handful of times in the past two weeks, but I haven’t come right out and talked about it in any sort of detail. That’s because there’s been a lot going on, and I didn’t want to give this short shrift.
The work has an innocuous title, “Valuing the Societal Impact of Medicines and Other Health Technologies: A User Guide to Current Best Practices.” That belies its importance, but the significance is hinted at by an all-star cast of authors, led by Jason Shafrin and including the best thinkers from Tufts, USC, University of Washington, Harvard, Penn, and beyond.
The piece seeks to recast how we think about value. This is not a new effort. For years, economists affiliated with ISPOR have pushed the idea of a “Value Flower,” which expands the traditional way of treating cost-effectiveness to go beyond the usual focus on clinical outcomes and cost offsets.
The Value Flower suggested that measuring value must go further, into ideas like productivity, scientific spillover, and option value. This is how it was usually presented:
That’s a good and useful construct, but it didn’t do much to group different kinds of emergent value, and the knock on the Value Flower was that it included a lot of theoretically interesting ways of assessing value without a lot of guidance on how, exactly, to do that measurement.
The “User Guide” seeks to update the Value Flower by putting the usual cost-effectiveness approaches at the center of the flower (the pistil, for you botanists) and surrounding that with an expanded set of petals in four groups. It looks like this.
A rethinking of the Flower itself would have been noteworthy, but the group also worked hard to make sure that it was usable. My favorite element of the paper is “Table E.1,” which literally makes the Flower into a checklist, offering researchers a way to more fully flesh out those different elements.
And for those curious about how, exactly, to flesh out those elements … there are 88 pages of explanation and references. It’s really quite a resource.
If you’ve been reading Cost Curve this week, it’s clear that the rethinking of the Value Flower comes at an auspicious time. I’m standing firm in my belief that more and more groups — in particular patients — are going to have to make determinations about drug value.
And those groups are likely to see value through a lens that is far more expansive than the payer lens — outcomes and costs — that usually dominates.
Hailing out the “User Guide” and going through the new Flower (and the checklist) will not only be best practice for economists but, also, those like me who need to think more broadly about communicating these ideas.
We’re going to see a million flowers bloom here. A million Value Flowers.
A couple of weeks ago, I floated the idea that not all premium increases are a bad thing and that what drives Americans nuts is not ever-increasing premiums but the idea that premiums are going up even as insurance is getting worse.
I argued that it’s possible — even likely — that we’d all be willing to pay a little more if we knew we were getting access to critical intervention (Alzheimer’s meds, obesity therapies, etc.)
I knew I was being provocative, and I received a passionate email rebuttal that I wanted to share in the interest of equal time:
To ignore the real challenges that employers and purchasers are facing affording premiums by claiming that people would pay $5 more is a STRETCH at best. NC wanted to pay for GLPs and it would have cost more than $45 PMPM FOR ONE DRUG. They would have had to raise taxes or cut other benefits drastically to afford it. Private employers are forgoing wage increases because of premium increases. To pretend that we can just raise premiums without consequences ignores the real challenges the ultimate purchasers are facing. And it is dangerous to keep pretending there are no opportunity costs associated with higher premiums. The people harmed by higher premiums tend to be those historically disadvantaged by the health care system. That’s not OK.
I have no interest in dismissing that argument, which is fair and thoughtful. My pollyannaish take is that these are exactly the kinds of discussions worth having out in the open.
My motto about Trump 2.0’s ambitions in the pharma realm remains “No one knows anything.” The latest evidence is this well-reported but ultimately unsatisfying effort by Bloomberg Law to divine what Mehmet Oz will mean for price controls.
New York State is going to ramp up its regulation of PBMs, per this nice overview from Bloomberg. I’ll be curious to see the real-world impact.
I’m not sure how closely we need to be thinking about the PREVAIL Act, a Senate bill that narrowly passed out of committee yesterday. It would make it harder to challenge patents via a relatively new fast-track pathway, which is good news for innovators. Axios said that the bill probably won’t go anywhere, but the reality is that IP legislation will probably be a theme of 2025, so it’s probably a good time to start paying attention to the players.
Here is a link to a CNBC piece on the possibility of tariffs hitting generics companies. This is not an area that I know inside-out, and the share performance of companies with a lot of generic exposure hasn’t necessarily been shellacked, so I’m not quite sure how real this is.
It’s worth reading this Nature Reviews Clinical Oncology piece (or just skimming the abstract). It suggests that high oncology drug prices are a big problem. The truth is more complicated, but anyone seeking to make a value-based around around oncology is going to need to address the arguments collected in that paper.
Curious about how 340B covered entities are responding to the arguments that the program is growing in an out-of-control fashion without much evidence of patient benefit? Their lobby — 340B Health — spent some dollars on sponsored content in the Wall Street Journal. The fact that the pro-340B argument is driven by anecdote is a tell here, but it’s good to see where the battle lines are drawn.
Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations.
To learn more about how Reid Strategic can help you, email Brian Reid at brian@reidstrategic.com.
