PIPC Chairman Tony Coelho
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In a January 4 Health Affairs Forefront article, “Options for CMS Drug Price Negotiations,” Daniel Ollendorf and Dominic Voehler discuss pricing methodologies based on how much a drug improves health. However, the authors overemphasize reliance on frameworks that, especially for people with disabilities, are red flags due to their reliance on valuing people’s lives in dollars. Instead, the Centers for Medicare and Medicaid Services (CMS) has an opportunity to achieve a level of patient-centeredness that other programs lack.
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The Inflation Reduction Act (IRA) (Section 1194(e)) includes provisions calling on CMS to negotiate prices of certain older drugs. As noted by these authors, there is little detail on how CMS should do this. The statute describes different factors, some relating to unmet need and comparative effectiveness. Recognizing the potential for discrimination, the law requires CMS to consider a drug’s impact on specific populations, such as people with disabilities, and bars consideration of evidence that devalues extending the life of “an elderly, disabled, or terminally ill individual.” This is consistent with the Affordable Care Act explicitly barring CMS from using quality-adjusted life-years (QALYs) and similar metrics in Medicare.
The Importance Of Breaking Away From QALYs And Following The Path Laid Out By PCORI
Historically, cost-effectiveness analyses used in health care coverage and reimbursement decisions have relied on biased metrics such as QALYs, instead of therapeutic benefit to patients and people with disabilities as described in the IRA. These metrics disproportionately impact care access for subpopulations already experiencing substandard health care; such groups often experience discrimination doubly by virtue of being Black, Indigenous, or people of color and having a disability or chronic condition. It is essential that any discussion about valuing health care recognize this historic discrimination.
The authors’ suggestion that CMS should consider using QALY-based assessments in the new program is contrary to existing law stating Medicare “may not utilize such an adjusted life year (or such a similar measure), as a threshold to determine coverage, reimbursement, or incentive programs,” thereby already barring their use in Medicare decisions. This debate illustrates why disability advocates and legislators want the QALY ban applied consistently across federal programs as proposed in HR 485, a bill using the same language in existing law to protect against discrimination in other Department of Health and Human Services (HHS) programs. I was pleased that CMS acknowledged the existing law barring QALYs and similar measures in its initial Medicare Drug Price Negotiation Program guidance (p. 36) and urge the agency to stay true to its commitment to health equity by stating explicitly it will not use such metrics at all, not just “certain uses” of them as the guidance currently states. CMS should further state that it will not rely on assessments from organizations such as the Institute for Clinical and Economic Review that reference QALYs as the “gold standard” and are entrenched in old, one-size-fits-all methods. These steps are essential to reassuring patients and people with disabilities that they will be treated as individuals—not averages.
Concerns over QALY-based metrics are not new, nor resolved. In 1992, the HHS rejected Oregon’s waiver application using QALYs to prioritize covered health care services, noting implications for discrimination under the Americans with Disabilities Act. The policy debate in Oregon is still not settled 30 years later.
When the Patient-Centered Outcomes Research Institute (PCORI) was created in 2010, its authorizing statute not only prohibited cost-per-QALY research by the Institute but called for robust patient engagement and consideration of subpopulations to protect against a one-size-fits-all (p. S1796) standard for value and effectiveness. In 2019, the National Council on Disability, an independent federal agency advising Congress and the administration on disability policy, wrote a report finding QALYs to be discriminatory; in 2022, the Council again recommended a consistent bar on the use of QALYs across federal programs as part of its Health Equity Framework. The concerns are bipartisan: The 2020 Democratic National Committee Platform stated that people should not be denied coverage based on QALYs and House Republicans have introduced legislation barring QALYs across federal programs.
The metric called “value of a statistical life”, also promoted by Ollendorf and Voehler, similarly relies on public opinion and attributes a dollar amount to a life to determine whether costs are “worth it.” Studies have confirmed the public’s inherent bias that people with disabilities live low-quality lives, which translates into assumptions that disabled lives are not worth saving.
We agree with Ollendorf and Voehler that Germany and France provide an interesting reference; both rely primarily on assessments of comparative clinical effectiveness. The elements these two countries get wrong, the US is uniquely suited to address. Germany’s clinical approach does not use QALYs, but its rigid methods for comparing effectiveness of drugs choose the comparators based on cost—not clinical equivalence—and fail to consider meaningful surrogate endpoints that matter to patients. A study showed 16 percent of products were withdrawn from the German market after failed negotiations, and providers are hesitant to prescribe an innovative product they believe may ultimately be withdrawn from the market.
By contrast, Congress created PCORI to ensure that the comparative effectiveness or “added benefit” of a treatment or service is defined by achieving outcomes that matter to patients, and that evaluations provide an explicit understanding about the different impacts among subpopulations. PCORI has become the standard-bearer for conducting comparative clinical effectiveness research in a manner centered on needs and preferences of patients and people with disabilities. PCORI is a reliable resource for CMS on effective engagement of affected patient stakeholders and standards for high-quality evidence centered on patients and people with disabilities.
Moving Forward
To get right what other countries get wrong, CMS should identify standards for research it will use to make judgements about therapeutic impacts of negotiated drugs, assuring it is centered on value to patients and people with disabilities and inclusive of real-world evidence. For CMS decisions to reflect the outcomes that matter to patients and people with disabilities requires the input of these affected groups. As Senator Bob Casey (D-PA) said during the IRA debate, Congress expects their engagement (p. S3858) and consultation as CMS gathers evidence and makes decisions.
We agree factors such as clinical benefit, burden on society, and impact on caregivers are essential considerations. Evidence should identify the range of treatment impacts among subpopulations and acknowledge limitations on making conclusions about subpopulations not studied. The decision-making process should be publicly transparent and avoid discriminatory research using QALYs or similar methods. By setting appropriate standards, CMS could push researchers to abandon economic or clinical metrics steeped in stigma in favor of measures that encourage treatments valued by patients and people with disabilities.
The Importance Of Breaking Away From QALYs And Following The Path Laid Out By PCORI
Historically, cost-effectiveness analyses used in health care coverage and reimbursement decisions have relied on biased metrics such as QALYs, instead of therapeutic benefit to patients and people with disabilities as described in the IRA. These metrics disproportionately impact care access for subpopulations already experiencing substandard health care; such groups often experience discrimination doubly by virtue of being Black, Indigenous, or people of color and having a disability or chronic condition. It is essential that any discussion about valuing health care recognize this historic discrimination.
The authors’ suggestion that CMS should consider using QALY-based assessments in the new program is contrary to existing law stating Medicare “may not utilize such an adjusted life year (or such a similar measure), as a threshold to determine coverage, reimbursement, or incentive programs,” thereby already barring their use in Medicare decisions. This debate illustrates why disability advocates and legislators want the QALY ban applied consistently across federal programs as proposed in HR 485, a bill using the same language in existing law to protect against discrimination in other Department of Health and Human Services (HHS) programs. I was pleased that CMS acknowledged the existing law barring QALYs and similar measures in its initial Medicare Drug Price Negotiation Program guidance (p. 36) and urge the agency to stay true to its commitment to health equity by stating explicitly it will not use such metrics at all, not just “certain uses” of them as the guidance currently states. CMS should further state that it will not rely on assessments from organizations such as the Institute for Clinical and Economic Review that reference QALYs as the “gold standard” and are entrenched in old, one-size-fits-all methods. These steps are essential to reassuring patients and people with disabilities that they will be treated as individuals—not averages.
Concerns over QALY-based metrics are not new, nor resolved. In 1992, the HHS rejected Oregon’s waiver application using QALYs to prioritize covered health care services, noting implications for discrimination under the Americans with Disabilities Act. The policy debate in Oregon is still not settled 30 years later.
When the Patient-Centered Outcomes Research Institute (PCORI) was created in 2010, its authorizing statute not only prohibited cost-per-QALY research by the Institute but called for robust patient engagement and consideration of subpopulations to protect against a one-size-fits-all (p. S1796) standard for value and effectiveness. In 2019, the National Council on Disability, an independent federal agency advising Congress and the administration on disability policy, wrote a report finding QALYs to be discriminatory; in 2022, the Council again recommended a consistent bar on the use of QALYs across federal programs as part of its Health Equity Framework. The concerns are bipartisan: The 2020 Democratic National Committee Platform stated that people should not be denied coverage based on QALYs and House Republicans have introduced legislation barring QALYs across federal programs.
The metric called “value of a statistical life”, also promoted by Ollendorf and Voehler, similarly relies on public opinion and attributes a dollar amount to a life to determine whether costs are “worth it.” Studies have confirmed the public’s inherent bias that people with disabilities live low-quality lives, which translates into assumptions that disabled lives are not worth saving.
We agree with Ollendorf and Voehler that Germany and France provide an interesting reference; both rely primarily on assessments of comparative clinical effectiveness. The elements these two countries get wrong, the US is uniquely suited to address. Germany’s clinical approach does not use QALYs, but its rigid methods for comparing effectiveness of drugs choose the comparators based on cost—not clinical equivalence—and fail to consider meaningful surrogate endpoints that matter to patients. A study showed 16 percent of products were withdrawn from the German market after failed negotiations, and providers are hesitant to prescribe an innovative product they believe may ultimately be withdrawn from the market.
By contrast, Congress created PCORI to ensure that the comparative effectiveness or “added benefit” of a treatment or service is defined by achieving outcomes that matter to patients, and that evaluations provide an explicit understanding about the different impacts among subpopulations. PCORI has become the standard-bearer for conducting comparative clinical effectiveness research in a manner centered on needs and preferences of patients and people with disabilities. PCORI is a reliable resource for CMS on effective engagement of affected patient stakeholders and standards for high-quality evidence centered on patients and people with disabilities.
Moving Forward
To get right what other countries get wrong, CMS should identify standards for research it will use to make judgements about therapeutic impacts of negotiated drugs, assuring it is centered on value to patients and people with disabilities and inclusive of real-world evidence. For CMS decisions to reflect the outcomes that matter to patients and people with disabilities requires the input of these affected groups. As Senator Bob Casey (D-PA) said during the IRA debate, Congress expects their engagement (p. S3858) and consultation as CMS gathers evidence and makes decisions.
We agree factors such as clinical benefit, burden on society, and impact on caregivers are essential considerations. Evidence should identify the range of treatment impacts among subpopulations and acknowledge limitations on making conclusions about subpopulations not studied. The decision-making process should be publicly transparent and avoid discriminatory research using QALYs or similar methods. By setting appropriate standards, CMS could push researchers to abandon economic or clinical metrics steeped in stigma in favor of measures that encourage treatments valued by patients and people with disabilities.