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Do fair prices lead to fair access? Supporting access with a comprehensive value proposition to bridge the gap

By Xcenda

By: Ben Muller, PharmD; Maren Forsgren, MA

This article appeared in the Summer 2022 edition of HTA Quarterly. Subscribe to receive updates.

The Institute for Clinical and Economic Review (ICER) explores the “Grand Bargain” in a recently published assessment of fair access criteria among select US health plans. As predicted, plans may fall short in offering fair cost-sharing to patients. However, biopharma companies can encourage fair access by communicating a comprehensive product value proposition.

Innovation in the pharmaceutical industry continues to evolve, driven by advancements in drug discovery paired with increased need among the aging population and a rise in prevalence and treatment of chronic diseases, among other factors. Recent advancements in medicine include cures to diseases previously considered deadly or debilitating—advancements that have extended life expectancy and improved quality of life. For example, therapies that target specific genes and proteins that promote cancer cell growth have brought hope to patients who previously had few successful treatment options.

While expansions in drug technology have led to an increasing array of promising pharmaceutical options, the US continues to experience unsustainable increases in healthcare spend and a lack of equity in access to treatment. In an environment of constrained healthcare resources and growing healthcare needs, healthcare decision makers (HCDMs) across private and public sectors must determine what treatments and technologies they will fund.

Various industry stakeholders bear an interest and responsibility to expand fair access to drugs and hold insurers, employers, and pharmacy benefit managers accountable when utilization management criteria are perceived to be unreasonable. This underscores the modern challenge of balancing access and affordability—navigating the ethical and practical tension between providing insurance that maximizes personalized choices and the need to manage resources fairly within budget constraints.

ICER is among those US organizations (including government, non-profit, and academic entities) taking a leading role in framing the discussion of access and affordability. ICER is broadly relied on as one of a handful of key sources of information to guide HCDMs’ coverage decisions. ICER is best known for its cost-effectiveness and fair-pricing analyses of innovative drugs and biologics. However, drug pricing is only one piece of the equation. ICER introduced the “Grand Bargain” concept as a solution that expands the conversation beyond drug pricing and rewards fairly priced drugs with fair access by insurance companies, which in turn encourages pharmaceutical innovation for biopharmaceutical companies.

To that end, in September 2020 ICER published a white paper, “Cornerstones of ‘Fair’ Drug Coverage: Appropriate Cost-Sharing and Utilization Management Policies for Pharmaceuticals.” In this paper, ICER addressed the broader ethical and pragmatic issues of insurance coverage policy and access to care, and outlined a set of 20 appropriateness criteria deemed essential to fair access to drugs. These “fair access criteria” were developed as a launchpad for a more robust discussion of what access must look like in order to be deemed fair, as well as setting a construct for future evaluation.

Following the publication of the fair access criteria, ICER conducted an analysis to assess the real-world relationship between select fair access criteria and a drug’s cost-effectiveness (as gauged by a calculation of the incremental cost-effectiveness ratio, a measure that represents the added value of an intervention vs a comparator). The analysis assessed concordance with ICER’s fair access criteria for 28 drugs that ICER previously deemed to be cost-effective across 15 of the largest commercial formularies in the US. In December 2021, ICER published its first analysis of fair access among 2020 US coverage policies, selecting a handful of fair access criteria for the scope of this initial analysis, which are summarized below in Table 1.

Table 1. Fair access criteria in scope for initial fair access analysis (abbreviated)

A comprehensive assessment of concordance with all fair access criteria was not possible, given limitations of available datasets, and ICER specifically notes that the analysis should not be used to draw conclusions about whether payers provide fair access. Therefore, this report must be considered exploratory in nature. 

ICER found payer policies to be highly concordant across three of the four criteria; however, cost-sharing was discordant in nearly a quarter of the payer policies assessed. Assessment of the specific drugs reviewed illustrates some cost-sharing variability: drugs below the median annual net price ($27,000) exhibited 81% concordance with the cost-sharing criteria, compared to 72% concordance for drugs above annual net price. Moreover, particularly expensive drugs may be considered cost-effective by ICER but fail to pass the fair access criteria as defined for cost-sharing. For example, ICER deemed Hemlibra® (emicizumab-kxwh) to be overall “cost saving” at a wholesale acquisition cost of $482,000 for the first year of treatment. Despite this positive evaluation, approximately half of payers did not include Hemlibra on the lowest relevant tier; therefore, failing to meet the fair cost-sharing criteria.

These findings highlight concerns with the insufficiency of cost-effectiveness as a determinant of US market access. Biopharma companies are certainly interested in obtaining a favorable ICER review, as this is a key clinical and economic review source used by HCDMs. However, biopharma manufacturers may be better served by broadening their focus to communicate overall value via a product value proposition that demonstrates broad impact on health outcomes or a minimal budget impact. Payer coverage criteria, formulary placement, and cost-sharing are ultimately driven by the larger impact on total health outcomes and actuarial impact of the drug rather than assessments of cost-effectiveness. In turn, demonstrating product value in alignment with US payer assessment of value and review processes may hold greater value than obtaining a favorable review from ICER.

Another limitation in the assessment of cost-sharing is failure to consider patient deductible levels along with benefit structure. While tier placement is an important factor driving affordability, a rise in deductible levels means patients must spend a significant amount out of pocket before their insurance company starts to contribute to the cost of care. With the rising cost of healthcare in the US, employers continue to push cost-sharing to employees, and more individuals are opting for high-deductible health plans (in 2022, these plans hold a deductible of $1,400 for an individual or $2,800 for a family). Between 2011 and 2021, the average deductible increased 68.4% from $911 to $1,669 per year. This additional patient cost pressure (coupled with the presence of unfair cost-sharing policies as suggested by this ICER analysis) underscores the need for biopharma companies to adequately demonstrate product value and effectively craft their payer engagement strategies to minimize access restrictions in payer policies.

As game-changing treatments continue to alter the trajectory of medicine and improve the quality of life for patients, the tension between access and affordability will continue to require robust engagement across the breadth of healthcare stakeholders. Calls for transparency in health plan benefit design, the true cost of treatments, and corresponding patient outcomes will continue. Therefore, successful biopharmaceutical manufacturers must continue to lead in demonstrating innovative product value propositions through delivering improved treatment outcomes that serve patients’ unmet needs.

The article should be referenced as follows:

Muller B, Forsgren M. Do fair prices lead to fair access? Supporting access with a comprehensive value proposition to bridge the gap HTA Quarterly Summer 2022

Sources

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