Since its inception over a decade ago, PIPC has focused on infusing patient-centricity in our health care system. We have been highly focused on patient-centered solutions for evidence-based decision-making, including advocating for the development of high-quality patient reported outcomes data and development of high quality patient-centered comparative clinical effective research, as well as opposing reliance on one-size fits all cost-effectiveness thresholds. Our goal is for high-quality patient-centered data to equip and empower patients and people with disabilities to make decisions, with their providers, about the care and treatment best to address their individual needs.
Proposals to control health care cost growth in the U.S. have frequently involved discussion of the evidenciary standards followed in conducting the comparative clinical effectiveness research and/or value assessments that guide policy decision-making. Many other countries, including England and Canada, rely on assessments of a treatment’s cost-effectiveness to set prices. Incorporating use of a one-size fits all metric from another country by attempting to adapt it for use in the U.S. has justly caused concern among stakeholders, particularly patients and persons with disabilities. This is in part because cost effectiveness assessment (CEA) typically relies on an inherently discriminatory metric called the quality-adjusted life year (QALY). The National Council on Disability, an independent federal agency, has advised against the metric’s use in public programs, stating that “strict prioritization that is overly reliant on QALYs, similar to the kind utilized in England, is contrary to U.S. civil rights law and disability policy.” The concerns raised by NCD are long-held by the disability community and have resulted in policy protections against the use of the QALY, including a statutory prohibition against its use in Medicare.
As public awareness of the QALY’s implications for discrimination have grown, U.S. policymakers promoting drug price reform have sought to identify alternatives that rely on comparative clinical effectiveness research (CER) instead of cost-effectiveness. Prominent thought leaders, including President Biden, have mentioned that the U.S. could model the German system's coverage and reimbursement policies. The German system does not use QALYs, but it does rely on a one-size fits all method of value assessment to determine coverage and reimbursement.
This shift to increased consideration of CER is reflected in the recently enacted Inflation Reduction Act (IRA), which maintains the prohibition against use of CEA thresholds in Medicare and calls for use of CER in CMS decision-making related to drug prices. Although reliance on CER avoids some of the most egregious flaws of QALY-based cost-effectiveness, the CER approach could be harmful to individual patients and patient subgroups due to inherent methodological flaws that could favor containing costs over providing high-quality, equitable patient care.
While the German system places far greater reliance on one-size-fits-all CER standards than contemplated in the IRA, it nonetheless holds important lessons for policy-makers in the U.S. It is important to understand how the German system works, including flaws in the German approach to setting drug prices and its impact on patient access to care, including people with disabilities, older adults, and people with chronic conditions; not just those in “good” health. This issue brief examines the use of CER in Germany with a goal of informing a U.S. audience as to how, moving forward, U.S. policymakers can do better by investing in solutions that keep patients at the forefront of our health care decision making.
As public awareness of the QALY’s implications for discrimination have grown, U.S. policymakers promoting drug price reform have sought to identify alternatives that rely on comparative clinical effectiveness research (CER) instead of cost-effectiveness. Prominent thought leaders, including President Biden, have mentioned that the U.S. could model the German system's coverage and reimbursement policies. The German system does not use QALYs, but it does rely on a one-size fits all method of value assessment to determine coverage and reimbursement.
This shift to increased consideration of CER is reflected in the recently enacted Inflation Reduction Act (IRA), which maintains the prohibition against use of CEA thresholds in Medicare and calls for use of CER in CMS decision-making related to drug prices. Although reliance on CER avoids some of the most egregious flaws of QALY-based cost-effectiveness, the CER approach could be harmful to individual patients and patient subgroups due to inherent methodological flaws that could favor containing costs over providing high-quality, equitable patient care.
While the German system places far greater reliance on one-size-fits-all CER standards than contemplated in the IRA, it nonetheless holds important lessons for policy-makers in the U.S. It is important to understand how the German system works, including flaws in the German approach to setting drug prices and its impact on patient access to care, including people with disabilities, older adults, and people with chronic conditions; not just those in “good” health. This issue brief examines the use of CER in Germany with a goal of informing a U.S. audience as to how, moving forward, U.S. policymakers can do better by investing in solutions that keep patients at the forefront of our health care decision making.
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