The Worth of a Thing is What it Will Bring

January 29, 2019 10:55 am

There’s an English proverb that reminds us, “The worth of a thing is what it will bring.” For patients with debilitating or life-threatening diseases, it’s hard to put a “worth” on breakthrough medicines that “bring” them better health. Value assessments are often insufficient.


That’s the conclusion of two new papers examining cost-benefit analyses for prescription drugs.


Last week the independent, nonpartisan Pioneer Institute released a study examining the Institute of Clinical and Economic Review’s (ICER) modeling, which, as we’ve written before here and here has become increasing popular among U.S. lawmakers, despite its obvious shortcomings. The Fraser Institute, based in Vancouver, also released a paper last week looking at the Canadian government’s efforts to regulate drug prices.


Both reports found that these efforts, while well-meaning, don’t take full measure of the worth or value that lifesaving medications bring to patients’ lives. They also believe efforts like ICER’s and those in Canada ultimately reduce patient access to life-saving medications.


The Pioneer Institute report, written by Visiting Fellow Dr. William Smith, outlines multiple ethical, methodological, and disease-specific problems with the ICER model in particular, and cost-benefit analyses more generally. For example, these models assign a lower value for the life of a disabled person because “most therapies will never restore a disabled person to perfect health.” In other words: Even if a medication is of enormous worth to a disabled person, that value is never truly captured. Smith says, “Because of these limitations … at this time our recommendation is for policymakers to avoid using ICER reviews for their Medicaid and other state programs.”


In general, Smith recommends that U.S. policymakers learn from Britain’s experience. The British government has used cost-benefit analyses for cancer drugs and that experiment “resulted in British cancer patients having some of the worst access to new cancer treatments in all of Europe and created a political crisis for British politicians.” Smith also reminds readers that the Affordable Care Act actually banned the use of the British model for Medicare programs because of concerns about the impact on older Americans, the disabled, and the terminally ill.


The Fraser Institute report explains Canada’s Patented Medicine Prices Review Board (PMPRB), which regulates the prices of patented medicines in Canada, will soon implement new rules to regulate lower drug prices. It concluded PMPRB’s process for evaluating the costs and benefits of medicines exhibited a “bias towards cost savings rather than extending life.” In particular, the Fraser Institute is worried the new regulations will underestimate the true benefit of new drug therapies, particularly biologics and other personalized drug treatments, by “narrowing the scope of potential benefits.”


Bacchus Barua, the Institute’s associate director of health policy studies, warned the regulations may “lead to reduced access to new drugs for Canadian patients and even deter the investment by pharmaceutical companies needed to discover new medicines.” Barua’s co-author, Western Washington University professor Steven Globerman, said, “The federal government is potentially on a path that will limit access of Canadians to new life-saving drugs, while further discouraging the discovery of new medicines.”


Breakthrough medicine brings improved health. What is “worth” more than that?