Last month, Directors Brett Gardiner and Rachel Howard attended the ISPOR annual conference in New Orleans. With over 4,000 delegates in attendance and a three-day program packed with panel presentations, poster sessions, educational symposia and workshops, this is the leading global conference for health economics and outcomes research.
The theme of this year’s conference was ‘Rapid. Disruptive. Innovative’, and in the opening plenary session, keynote speaker Daniel Kraft set the scene by instilling in us an “exponential mind set”. He shared a wide-ranging overview of disruptive innovations taking place in healthcare, thinking beyond drugs and devices to other potentially powerful healthcare tools such as artificial intelligence, electroceuticals, digiceuticals, the internet of medical things (IoMT), blockchain, and 3D printing.
A panel discussion then considered how the pharmaceutical industry, healthcare providers and payers alike will need to adapt their practices in order to incorporate these innovations, making sure to “Uber themselves before they get Kodaked”.
Over the course of the subsequent breakout sessions, we dived deeper into a few of these areas. One hot topic was the application of artificial intelligence, natural language processing and machine learning in the field of health outcomes. We learned about how machine learning can be used to help characterize the underlying structure of large amounts of data and support with prediction and classification, and potentially even causal inference. A range of experts in the area explored what trends we might see over the next decade, as companies such as Amazon and Google make noise about entering the healthcare space.
Monday came to a close with a lively welcome reception, complete with a local Bourbon Street band, to celebrate 20 years of the journal Value in Health. We heard from the journal’s editors about how thinking around the key themes in the journal – the nature of ‘value’, methods of decision-analytic modelling and the use of health economics and outcomes research (HEOR) in health technology assessment (HTA) – has evolved during that time, and looks set to evolve in the future. As the issues and contexts change, with new ways of capturing value and new dimensions of value being considered, providing models and results that are transparent and open source, developed using methodological rigor, remains essential in ensuring that health-economic modelling continues to be seen as a scientific basis to inform decision making rather than a political advocacy tool.
After a breakfast of beignets (New Orleans’ style deep-fried doughnuts), Tuesday got underway with a plenary session on medical devices, which called attention to the need to balance the rapid explosion of innovation in this market with protective regulation and oversight. Ultimately all stakeholders involved want patients to be able to benefit from accessing the latest advances in medical technology as soon as possible, but without compromising their safety. This means HEOR and Real World Evidence (RWE) have a critical role to play in supporting improved decision making, although how exactly RWE will fit in to regulatory decisions is still being figured out through trial and error.
By far the most active topic of discussion and debate throughout the conference centered around how payers will accommodate the new wave of potentially curative gene therapies, with over 2,600 trials either completed or ongoing. Though groundbreaking and exciting, these therapies pose a particular challenge in that they are “hard to make and hard to pay for”.
We listened to policymakers, manufacturers, clinicians and payers debate how much we should – and can – pay for them, given their eye-watering upfront prices and uncertain long term benefits, but potential great value to patients. Whether current value frameworks are adequate for curative therapies, given their neglect of dimensions such as the value of hope, spillover value to family and caregivers, and the equity value of eliminating structural barriers to healthcare access by providing a cure, remains a contentious issue. And when it comes to financing them, existing payment structures, which (especially in commercial plans in multi-payer health systems such as the US) focus on short-term results rather than incentivizing long term savings, do not seem fit for purpose.
All of these issues are compounded by the uncertainty of duration of effect of these treatments given the limited evidence available. However given the high unmet needs they have the potential to address, this uncertainty is not in itself a good reason to wait for more research. As one panelist commented, the level of evidence that is considered “adequate” is a subjective judgment, not a statistical concept, and it is not (yet) obvious what level of evidence will achieve maximum public health benefit. There seem to be more questions than answers at this point, and early dialogue between payers and manufacturers to devise creative financing solutions will be key as more of gene therapies come to market.
Parallels were drawn to lessons learned from the experience of managing direct acting antivirals (DAAs) in hepatitis C, where drugs such as Sovaldi were highly cost effective but required a significant increase in expenditure in the short term, catching many payers off guard. With the conference being held in Louisiana, there were many references to the state’s recently introduced and highly innovative “Netflix-style” payment model for hepatitis C drugs, in which DAA manufacturers were invited to tender to provide State Medicaid patients with an unlimited supply of medicines paid over a five year ‘subscription’, resulting in a predictable budget impact for the state.
A key difference with gene therapies is that they are primarily being developed for rare and ultra-rare diseases, meaning much smaller numbers of patients stand to benefit. We looked specifically at the area of hemophilia, where gene therapies offer the hope of a cure, but not all patients are equally affected. Hence the value of a cure (and the cost offset by alleviating the need for ongoing therapy) for a mild patient who only occasionally needs factors would be much lower than for a severe patient with inhibitors, for example. “Precision medicine needs precision finance”, and a multitude of strategies have been brought to the table, including outcomes-based payments, risk pooling, milestone-based contracts, portfolio franchise bundling and reinsurance.
Over the course of the three days, we attended several sessions focused on the US, looking at the future of HTA, and what might happen in light of the Trump administration’s May 2018 blueprint to lower drug prices in a country which has one of the world’s highest GDP per capita spend on healthcare but is not matched by commensurate leading health outcomes. While the International Pricing Index (IPI) for Medicare Part B was one proposed approach to contain costs of pharmaceuticals, it doesn’t look likely to be implemented on schedule.
The Boston-based Institute for Clinical and Economic Review (ICER), an independent nonprofit ‘think tank’ that provides value-based price assessments to inform payer access decisions, has conducted an increasing number of evaluations and become increasingly influential in recent years. But despite its value framework having elements in common with formal HTA agencies, such as NICE in the UK, ICER is purely informatory and its evaluations do not have to be taken into consideration by payers. Panelists discussed legal, political and cultural barriers to the implementation of HTA in the US – seen by citizens as “rationing” or “death panels”, and promoting fairness over choice, as well as challenging the imperfect methodology of calculating cost effectiveness based on cost per QALY (Quality Adjusted Life Year), and citing the limited evidence of the impact of HTA on reducing healthcare costs.
In the wake of all of the much-discussed ultra-high cost therapies coming to market, the final plenary session saw a pertinent debate on affordability, specifically whether this is driving a need to revolutionize drug pricing at a global level.
The industry perspective was that pharmaceutical expenditure represents only a small proportion of all healthcare costs (around 10-15%, of which less than half is on branded drugs), and yet is the only part of the system that already has ‘built in cost containment’ in the form of patents – so is thus unfairly targeted and the focus should shift to inefficiencies elsewhere in the healthcare system.
However there was a recognition that differential drug pricing strategies are needed for high vs. low income countries based on their different ability to pay. But confidential discounts agreed between payers and manufacturers in some countries present an obstacle to developing transparent, fair and appropriate ways to modulate prices at a global level. Finding a way to achieve equitable access to innovative drugs in an operationally and commercially sustainable way, without chilling research and development, is a seemingly intractable issue for which there are – for now at least – no easy answers.
After browsing the posters in the exhibition hall, we rounded out Wednesday – and the conference as a whole – with a workshop on conducting qualitative research in special patient populations. Gaining a first-hand understanding of what really matters to patients is critical to ensure patient-focused drug development, but there are inherent challenges in obtaining this, especially when the patients are severely or terminally ill, very old or very young. Careful consideration of the ethics and practicalities is essential when interviewing patients, and best-practice guidelines should be followed to get the most out of patient research.
Contact us if you would like to discuss any of the themes or issues outlined here in more detail.
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