Facing criticism, CVS may modify its new cost-effectiveness program for covering some drugs
CVS Caremark (CVS) may revisit a plan that allows its clients to exclude coverage of most new, high-priced drugs after advocacy groups complained the effort would discriminate against very sick or disabled patients.
At issue is a cost-effectiveness program the pharmacy benefits manager touted last month for assessing value — in this case, any new drug exceeding $100,000 per QALY, or quality-of-life years, a benchmark that measures both the quantity and quality of life generated by providing a treatment. New drugs exceeding the threshold may be excluded from health plan and employer formularies, or coverage lists.
CVS took this step in response to pressure from some clients to take a stand against newer medicines with higher price tags, according to a source familiar with the matter. For its part, the PBM maintained the plan was undertaken at its own initiative and portrayed the effort as a way to push back against complaints that PBMs fail to sufficiently lower drug costs.
However, in a Sept. 12 letter to CVS Health chief executive Larry Merlo, dozens of advocacy groups argued that CVS will be relying on a “one-size-fits-all” approach to assessing value that “discriminates against the chronically ill, the elderly and people with disabilities, using algorithms that calculate their lives as ‘worth less’ than people who are younger or non-disabled.
“From a clinical care perspective, QALY calculations ignore important differences in individual patient’s needs and preferences. From an ethical perspective, valuing individuals in ‘perfect health’ more highly than those in ‘less than perfect’ states of health, is deeply troubling,” the groups argued.
Among the groups that sent the letter were the American Association of People with Disabilities; The AIDS Institute; U.S. Pain Foundation; Vietnam Veterans of America; Autism Society of America; Black Women’s Health Imperative; and the Epilepsy Foundation. The effort was organized by the Partnership to Improve Patient Care (PIPC), whose members include pharmaceutical industry trade groups.
In response, Dr. Troyen Brennan, a CVS executive vice president and chief medical officer, told us that cost-effectiveness, in general, is “here to stay” and the CVS plan will start as intended next year. But he added that the PBM intends to meet with representatives from the various groups and it is also possible the company will alter the program at some unspecified point.
“It behooves us to spend some time to understand the concerns of the disability community and, if necessary, modify the measures so the process treats every life as being of equal value,” he said. “We’ll go with the program we have now, but we’re looking for ways that we might modify it down the line. … I have to believe there are reasonable solutions that won’t change the concept.”
The move reflects long-standing controversy over the use of cost-effectiveness and, in particular, the QALY benchmark for gauging the value of medicines. And the complaints from the group further underscore competing narratives about how these tools measure benefits and the debate over the extent to which they should be used to guide decisions about insurance coverage.
“QALY is really a measure of resources to be allocated, not a measure of clinical decision-making,” said Anirban Basu, a professor of health economics and director of the Comparative Health Outcomes, Policy and Economics Institute at the University of Washington in Seattle. “And cost-effectiveness is only meant to guide coverage decisions, not determine what is to be covered.”
The issue is nuanced and complicated, but a great deal is at stake.
Patients, of course, want as much insurance coverage as possible in order to have access to medicines, a goal shared by drug makers seeking to boost their revenue. By contrast, public and private payers are constantly looking to identify ways for limiting coverage in order to meet their budgets and reduce the use of unnecessary treatments.
These differing views have sparked battles in other countries, such as the U.K., where cost-effectiveness thresholds are often cited as reasons for refusing government coverage. Over the past two years, Vertex Pharmaceuticals has famously fought with the U.K. government over the price for a cystic fibrosis drug, which a government cost-effectiveness agency deemed too pricey to have sufficient value.
The U.S., however, does not have a government-sponsored apparatus for assessing cost-effectiveness and, instead, public and private payers — PBMs and health plans — are increasingly turning to a nonprofit called the Institute for Clinical and Economic Review, or ICER, to fill this void.
The New York state Drug Utilization Review Board, for instance, recently relied on ICER for an assessment of a Vertex drug that state officials call too costly. And ICER has now been tapped by CVS, which has relied on the nonprofit in the past, for its new program, although the numerous advocacy groups object to ICER methodology.
“One problem the disability community has with ICER is a lack of attention paid to outcomes that matter to patients,” said Sara van Geertruyden, PIPC’s executive director. “It’s more reflective of an insurer’s actuarial value. They look at patients in the context of how long they’ll be on health plans, but patients see it as a lifetime value. There’s a disconnect.”
An ICER spokesman offered this retort:
“The ideal result of any health benefit design is for all patients to have access to all high-value treatments. That’s precisely why ICER exists,” he wrote us. “By using independent evaluations to link price more closely to the added clinical benefits a drug provides, drug makers and payers both can take action to accelerate the transition to a health system that achieves that goal.
“QALY is recognized as the gold standard for measuring how much a treatment improves patient lives, and it effectively rewards innovative medicines that significantly improve the lives of patients most in need. Patient populations that start off with a lower quality of life — whether because of a serious chronic illness or disability — actually represent the greatest opportunity for treatments to achieve a significant improvement in QALYs.”
One policy expert, however, noted the conundrum. “It is true that cost-effectiveness values a year of life not at full health less than a year of life at full health. But that’s what quality adjusted life years is,” Dr. Walid Gellad, who heads the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, wrote us.
CVS is on the defensive, though. Besides the letter sent by the advocacy groups, the pharmacy benefits manager engaged in dueling essays this week in Health Affairs, where Brennan defended the program against accusations by Dr. Robert DuBois, who heads the National Pharmaceutical Council, an industry-backed research group, that the pharmacy benefit manager is overreaching.
For instance, DuBois charged that CVS “presupposes that all patients respond in the same fashion to a therapy,” but maintained there is medical literature indicating that some patients benefit more than the average for the same treatment and the CVS approach “ignores this important clinical component.”
He also took exception to the hard-and-fast $100,000 QALY threshold, which CVS is establishing for most new medicines, although not those deemed “breakthrough” therapies by the Food and Drug Administration. Instead, CVS will focus on so-called me-too medicines, a term that refers to drugs for which alternatives already exist. But DuBois called this “an inappropriately blunt approach.”
In his own essay, Brennan argued that, by using ICER assessments, drug makers will not have any doubt about the effect of their pricing on formulary placements. “Those manufacturers concerned about the precision of the cost-effectiveness measure can address this by building in a more modest price for the medication,” he wrote.
However, Basu agreed the $100,000 mark may be problematic.
“Around the world, decision-making is never black and white around a particular threshold,” he said. “Unfortunately, CVS came up with a specific number and I think to say there is a cutoff and there will not be coverage for anything else seems quite stringent.”
STAT News: Facing Criticism, CVS May Modify Its New Cost-Effectiveness Program for Covering Some Drugs
An article in STAT News notes that CVS may consider changes to its new cost-effectiveness program as a result of backlash from over 90 leading advocacy organizations representing patients, people with disabilities, physicians, and caregivers. Spearheaded by the Partnership to Improve Patient Care (PIPC), stakeholder groups criticized CVS Caremark’s decision last month to incorporate the Institute for Clinical and Economic Review’s (ICER)”quality-adjusted-life-year” metric in some of its coverage choices. “From a clinical care perspective, QALY calculations ignore important differences in individual patient’s needs and preferences,” the letter states. “From an ethical perspective, valuing individuals in ‘perfect health’ more highly than those in ‘less than perfect’ states of health, is deeply troubling.” Dr. Troyen Brennan, a CVS executive vice president and chief medical officer, responded to the letter saying that “It behooves us to spend some time to understand the concerns of the disability community and, if necessary, modify the measures so the process treats every life as being of equal value. We’ll go with the program we have now, but we’re looking for ways that we might modify it down the line.”
The article in its entirety can be read below.