Don’t Take Cues from Other Countries on Price-Setting Rx Drugs
Most policymakers looking to widen patient access to prescription drugs have zeroed in on price setting as a panacea, as evidenced by the passage of a “negotiation” process in the Inflation Reduction Act last August. The Centers for Medicare & Medicaid Services is currently implementing this process, and our industry has been vocal in our ask that the process put an accurate value on medicines and preserve the access patients need to important treatments.
While CMS undertakes this daunting task, some scholars are engaging in a startlingly short-sighted push to get the agency to adopt foreign models of price controls that research clearly shows have failed patients for years, if not decades. Perhaps none of these efforts were more high profile than a recent JAMA article which tried to suggest that international health technology assessment agencies, or HTAs, have a successful approach regarding access to medicines.
In implying that the U.S. should import these foreign price-setting systems from nations such as Canada, France, and Germany, the researchers avoid discussing in any serious way the myriad clinical, patient-centered, health system, and societal reasons to be wary of such comparisons. Policymakers must understand that the processes these countries use to assign a value to a particular medicine have several flaws.
First, the authors of the JAMA article borrow an HTA model used by countries as a tool to restrict access to medicines at launch. Surveys show that patients in certain European countries can wait more than ten times longer than patients in other countries to get access to the same medicine, often varying dramatically across Europe. In fact, the average time to reimbursement for innovative treatments in European countries is 517 days, with smaller countries such as Malta and Romania seeing waits longer than 900 days.
This HTA used in Europe and elsewhere is fundamentally different from CMS’s process in development, which aims to set prices for drugs that have been on the market for years. The consequences of those ex-U.S. tools most acutely impact patients since they may work to restrict access to proven medicines – just as they are designed to do in their home countries. Further, the assessments employed by these other countries frequently fail to consider that definitions of patient and societal benefit will evolve over time and remain inextricably intertwined with a wide variety of other factors that can determine a prescribed course of treatment.
Equally important, the therapeutic alternatives proposed by these foreign HTAs are often inappropriate, including comparators that use very different mechanisms of actions, and they often fail to factor in patient preferences. Patients may, for example, want to avoid the potential side effects of that alternative medicine, but these HTAs attempt to assess treatment benefits without factoring in such priorities. When using broad categorizations, these price-setting bodies can sometimes hamstring physicians and limit options for proper care of the patient. Physicians should be able to prescribe a therapy that is an optimal fit based on that patient’s unique circumstances.
Many international ratings present in these assessments also hold narrow definitions of what is “unmet need.” It’s impossible to truly account for the unmet need for patients while ignoring the wide variety of disease manifestation and physical responses that an available treatment can bring about. These HTAs also fail to factor in broader concepts of what constitutes a new or “improved” medicine (such as novel formulations of a drug). Evaluating the true societal value of prescription medicines requires a comprehensive approach to measuring value, one that encompasses patient-centered measures such as improvements in quality of life, productivity, and alleviating the burden on caregivers.
Rather than following the treacherous example of other nations, CMS should look to what matters most here in the United States. That means valuing clinical and societal benefits and prioritizing patient engagement based on their unique treatment needs. Even the JAMA manuscript notes – barely – the importance of designing a drug evaluation system that is more tailored to the U.S. (The researchers do take great care to bury the lede: fifth on their list of “limitations” for a price-setting approach is the warning that “extrapolating ratings from other countries to the U.S. may not be warranted.”)
We must remember no two treatments are the same, and determining which one is “best” is going to vary from patient to patient. Attempting to cleanly delineate between molecules, especially without understanding patient impact, risks discouraging the kind of stepwise progress that leads to more effective medicines. Any failure to account for improvements in indirect benefits like productivity or quality of life may lead to the undervaluation of an effective treatment that a patient feels is high value.
If the United States is going to go down the road of greater government involvement in setting the price of medicines, we must not get distracted by superficial comparisons to the approaches other countries take. Instead, we must learn from their inherent flaws to build a better, distinctly American process that helps the patient showing up at the pharmacy counter.
John Michael O’Brien is a pharmacist, the president and CEO of the National Pharmaceutical Council, and a senior fellow at the USC-Schaeffer Center for Health Policy and Economics.
