As policymakers renew interest in referencing foreign drug prices, like Most Favored Nation proposals, how widely could this shift the U.S. to reliance on QALYs in its health care decision-making?
A new analysis by the Office of Health Economics (OHE) – the world’s oldest independent health economics research organization – sheds light on this crucial issue.
To answer the question of how QALYs are used across countries to inform reimbursement and pricing decisions, OHE reviewed Health Technology Assessment (HTA) practices across Organisation for Economic Co-operation and Development (OECD) countries, with a goal of reporting on how QALYs are used in pricing and reimbursement decisions. OECD member countries have been the reference for prices included in proposed U.S. drug pricing policies such as “Most Favored Nation” pricing, a concept advanced by the current Trump administration, as well as Congressional legislative proposals.
OHE found that almost 90% of countries – 33 out of 38 – reference QALYs. Of these countries, 26 formally rely on QALYs and an additional 7 use them informally, which OHE defines as being referenced in their HTA guidelines or academic literature that is cited in the HTA process. This report is particularly enlightening in that it highlights that some countries, like Germany, that were generally thought not to use the QALY in their health care decision-making, do incorporate it by reference in their HTA process. OHE’s work shows that any proposal to import foreign prices would also import their use of QALYs and therefore circumvent important U.S. patient safeguards.
Over the past 10 years, as U.S. politicians have sought to lower drug prices, the idea of setting prices to those paid abroad continues to surface. This concept has long concerned disability advocates as it would, in effect, import discriminatory QALYs from other countries, contrary to federal law and policy intended to bar their use in federal and state programs like Medicare and Medicaid. QALYs are a measure of cost effectiveness that places a lower value on the lives of people with disabilities and chronic illnesses and older adults which results in treatments for these individuals being valued less than treatments for people who are “healthy”. In countries that use QALYs, patients with complex health needs are often unable to access the treatments they need and which their doctors prescribe.
In 2019, the National Council on Disability, an independent federal agency advising Congress and the administration on disability policy, published a report on the QALY’s implications for discrimination against people with disabilities. The report recommended policymakers avoid the use of the QALY both directly and by importing its use from other countries. It also highlighted the experiences of patients struggling to access drugs in other countries, like the United Kingdom, as an indicator of what would happen to patients in the U.S. if QALY-based decision making were imported.
This OHE report should serve as a helpful tool for policymakers as they contemplate policies that would import health care decision-making from other countries. The U.S., through the laws and policies protecting equal access to health care – such as guidance related to state-based Crisis Standards of Care, EMTALA, Section 504 of the Rehabilitation Act and the Affordable Care Act – has embraced the ethic that all lives are valuable. By contrast, other countries use the QALY as the basis for coverage and reimbursement decisions, devaluing the lives of older adults, people with disabilities and even infants. This new report serves as an additional warning that we should avoid importing such methodologies into the U.S. health care system.
To answer the question of how QALYs are used across countries to inform reimbursement and pricing decisions, OHE reviewed Health Technology Assessment (HTA) practices across Organisation for Economic Co-operation and Development (OECD) countries, with a goal of reporting on how QALYs are used in pricing and reimbursement decisions. OECD member countries have been the reference for prices included in proposed U.S. drug pricing policies such as “Most Favored Nation” pricing, a concept advanced by the current Trump administration, as well as Congressional legislative proposals.
OHE found that almost 90% of countries – 33 out of 38 – reference QALYs. Of these countries, 26 formally rely on QALYs and an additional 7 use them informally, which OHE defines as being referenced in their HTA guidelines or academic literature that is cited in the HTA process. This report is particularly enlightening in that it highlights that some countries, like Germany, that were generally thought not to use the QALY in their health care decision-making, do incorporate it by reference in their HTA process. OHE’s work shows that any proposal to import foreign prices would also import their use of QALYs and therefore circumvent important U.S. patient safeguards.
Over the past 10 years, as U.S. politicians have sought to lower drug prices, the idea of setting prices to those paid abroad continues to surface. This concept has long concerned disability advocates as it would, in effect, import discriminatory QALYs from other countries, contrary to federal law and policy intended to bar their use in federal and state programs like Medicare and Medicaid. QALYs are a measure of cost effectiveness that places a lower value on the lives of people with disabilities and chronic illnesses and older adults which results in treatments for these individuals being valued less than treatments for people who are “healthy”. In countries that use QALYs, patients with complex health needs are often unable to access the treatments they need and which their doctors prescribe.
In 2019, the National Council on Disability, an independent federal agency advising Congress and the administration on disability policy, published a report on the QALY’s implications for discrimination against people with disabilities. The report recommended policymakers avoid the use of the QALY both directly and by importing its use from other countries. It also highlighted the experiences of patients struggling to access drugs in other countries, like the United Kingdom, as an indicator of what would happen to patients in the U.S. if QALY-based decision making were imported.
This OHE report should serve as a helpful tool for policymakers as they contemplate policies that would import health care decision-making from other countries. The U.S., through the laws and policies protecting equal access to health care – such as guidance related to state-based Crisis Standards of Care, EMTALA, Section 504 of the Rehabilitation Act and the Affordable Care Act – has embraced the ethic that all lives are valuable. By contrast, other countries use the QALY as the basis for coverage and reimbursement decisions, devaluing the lives of older adults, people with disabilities and even infants. This new report serves as an additional warning that we should avoid importing such methodologies into the U.S. health care system.
