Lack of transparency in how drugs are priced is currently a big issue in health care. Most recently, we saw public outcry over the high price increases for Mylan’s EpiPen. Value frameworks are emerging as the rational approach to addressing this systemic price transparency issue. The major trend of using frameworks and models to evaluate the value of a drug can be further explored using the oncology market as a rich case study.

In oncology, a large number of new drugs are being approved across a variety of indications. In 2014, the FDA approved 10 new drugs/biologics and expanded indications for 9 existing drugs, four times more than in 2010. From a market access perspective, although restrictions remain relatively low, payers are beginning to implement new methods to ensure proper utilization and control costs—clinical pathways, bundling/episodic payment, alternative payment models. In addition to payers, physician-led organizations have begun to evaluate new drugs based on the “value” they provide using various scorecard frameworks. Taking a closer look at three of these groups, the American Society of Clinical Oncology (ASCO), Memorial Sloan Kettering Cancer Center (MSKCC), and the National Comprehensive Cancer Network (NCCN) will help to illustrate the current discussion around value in oncology.

Published in June 2015, the ASCO framework represented the fruit of years of labor by the specially created Task Force on the Cost of Cancer Care, now renamed Value in Cancer Care Task Force. The momentum behind increased attention to costs was begun by the American Board of Internal Medicine Foundation’s “Choosing Wisely” campaign, in which ICER is also a participant, with the ASCO framework being the next landmark initiative.

While the Institute of Medicine defined six elements of value in cancer care—safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity—the ASCO framework includes only three of these elements: clinical benefit (effectiveness); toxicity (safety); and cost (efficiency). ASCO felt that the other three elements, though highly important, are difficult to measure and rarely reported in clinical trials. Using the framework, analysts have calculated a “Net Health Benefit” (NHB) score in a few cancers where clinical data was available comparing new therapies with standard regimens.

Although some revisions have been made to the framework since its publication in 2015—ASCO solicited feedback from stakeholders and published a revised version in May 2016—the NHB score still represents the combination of a clinical-benefit score (derived from comparisons of overall survival, progression-free survival, or response rate) and a toxicity score. A few of the most common critiques of the framework include: limited comparability of drugs if head-to-head trial is needed; focus on prescription drug costs only; and lack of QoL and PRO information. Even with the revision, the Task Force emphasizes that the framework is preliminary, “is intended for use in the clinical setting between physicians and their patients…to serve as a catalyst and facilitator of individual treatment discussions,” and not to be used as a policy tool. ASCO plans to roll out the framework as a software application—CancerLinQ—facilitating accessibility and tailoring to individual practices’ needs. 

In addition, MSKCC has developed the DrugAbacus tool, which leverages physician-provided values for drugs on specific metric—efficacy, toxicity, rarity, population burden of disease, cost of development—as inputs into the total DrugAbacus fair value price estimate. According to DrugAbacus analysis, some cancer drugs seem to be priced appropriately, while others are either priced extremely high or low for the benefit achieved. The biggest concern with the analysis is the unintended impact on drug pricing, where manufacturers could see reason to increase the prices of drugs deemed underpriced.

Finally, NCCN has developed “Evidence Blocks”, a patient-oriented value formula that combines data on affordability with efficacy, safety, quality of evidence, and consistency of evidence for the many regimens included in its 66 comprehensive cancer treatment guidelines. Presented in column format, the scores for these five components for each regimen—determined by a panel of physician experts—are compared using values ranging from 1 (palliative only) to 5 (highly effective). The stacked shaded blocks provide a visual summary of the overall benefit of the regimen, according to Robert Carlson, NCCN chief executive officer, who explained that the tool is, “designed to provide information to physicians and patients so that they can figure out what their own formula is in terms of weighting the different components that people use to make decisions.”

Taken together, the metrics used to define value in oncology are similar but certainly not identical (see Figure 1). The most common value-drivers are efficacy and safety/toxicity parameters. However, even with this commonality, ongoing debate exists regarding which assessments, outcomes, and endpoints can be used to measure value.

For example, many novel drugs prolong life by a few months, and that benefit is valued differently depending on the physician, payer, and patient involved. Stakeholders such as the government, payers, professional societies and others are investing resources and efforts in further defining, assessing and implementing value in health care delivery, which is increasingly informing the pricing of the next-generation of innovative drugs. 

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Ryan Million is a partner at Trinity Partners, a strategic healthcare consulting firm that works with top U.S., European and Japanese biotechnology, device, diagnostic and pharmaceutical companies. Results delivered to his clients include several successful licenses and acquisitions, entry and expansion in growth therapeutic areas, and early identification of strategic drivers for in-line and pipeline products. Dr. Million completed his doctorate training in the genetics department at Harvard University and B.S. in Chemistry/Biochemistry at the University of California, San Diego.

Keren Shani is a senior consultant at Trinity Partners, with experience in market access, pricing and reimbursement and contracting across a number of therapeutic areas. Ms. Shani completed her graduate degree in public health at Boston University and B.A at Tufts University.