Payer use of US value assessment tools: New insights and implications for our evolving healthcare system

Pharmaceutical innovation is driving advancements in healthcare delivery and patient outcomes, including extending life expectancy and improving quality of life. But as costs rise across all healthcare sectors, healthcare decision-makers including public and private payers are facing difficult decisions regarding how to allocate finite resources. Increasingly, payers are exploring opportunities to assess the relative value of prescription drugs to inform coverage decisions and pricing negotiations. The recent passage of the Inflation Reduction Act (IRA) has intensified the spotlight on pharmaceutical pricing and sparked new conversations about how to define and measure treatment value.

In the last decade, numerous value assessment frameworks or tools have emerged to help healthcare stakeholders appraise the value of healthcare treatments and services. Each value assessment resource has its own methodological approach, purpose, and intended audience, such as guiding shared decision-making between patients and their care team or informing policy discussions and health care coverage decisions.¹  As the policy landscape evolves and value-based pricing becomes more common, it is important to understand healthcare payers’ perceptions and use of current US value assessment tools and to identify the extent to which these tools are influencing treatment coverage and pricing negotiations.

New insights on payer use of US value assessment tools

To gain a better understanding of payer perceptions and use of US value assessment tools, we conducted a double-blind, web-based survey using Xcenda’s Managed Care Network, a research panel composed of national and regional US healthcare decision-makers representing over 310 million lives. We surveyed 51 individuals from healthcare payer organizations on their perceptions and use of the five predominant US value assessment tools cited in the literature, including American Society of Clinical Oncology’s Value Framework, Drug Pricing Lab’s Drug Abacus, the Institute for Economic and Clinical Review (ICER’s) value assessment framework and evidence reports, the Innovation and Value Initiative (IVI’s) Open-Source Value Project models, and the National Comprehensive Cancer Network (NCCN’s) Evidence Blocks.^3,4,5,6,7 Results from this survey were published in a new study in the Journal of Managed Care & Specialty Pharmacy titled “Payer Perceptions and Use of Value Assessment Tools in the United States.”⁸

Key findings include:

1. Payers are familiar with value assessment tools. Surveyed payers were very familiar with US value assessment tools, with 86% reporting they were familiar with at least 4 of the 5 tools.
2. Some payers are using value assessment tools to inform coverage decisions and pricing negotiations. A large portion of payers perceived ICER evidence reports and NCCN Evidence Blocks to be very or extremely useful in informing coverage decisions (57% and 49%, respectively). Payers reported that ICER evidence reports were by far the most helpful tool in informing pricing negotiations with 53% saying they were very or extremely useful. All other tools were perceived to be less useful in informing pricing negotiations.
3. Payers recommended changes to make value assessment tools more useful and relevant. To advance more useful and relevant tools, payers recommended that value assessors incorporate more transparent and payer-centric data into their assessments, increase the number of assessments conducted, and expand awareness of their assessment tools.
4. Further examination of value assessment tools and methods is needed. As policy momentum behind value assessment grows, additional research on value assessment tools is needed to ensure application of value assessment in the US is appropriate, patient-focused, and advances the delivery of high-value care.

The value assessment landscape is evolving and dynamic The US value landscape is evolving on numerous fronts. First, findings from our recent study, combined with previous research, point to a substantive uptick in payer awareness and use of value assessment tools since 2016.^{9,10,77,10,12} This shift in the value assessment landscape, whereby assessment tools are increasingly informing decisions that affect patient access to care places greater emphasis on the need for appropriate and evidence-based approaches.

Second, US value assessors are updating their methods and processes for conducting value assessments. ICER’s president, Steve Pearson, recently announced that the organization is planning to evolve its methods and will open its value assessment framework to public comments in June 2023.¹³ This update will provide an opportunity for healthcare stakeholders including life sciences organizations, payers, and patients to identify and recommend meaningful methodological and process changes.

Third, the implementation of the IRA’s drug pricing provisions including the Medicare Drug Price Negotiation Program is placing value at the center of the national health policy conversation. Although the program may consider comparative effectiveness research tied to clinical benefit, a common staple of health technology assessments, it may also consider manufacturer-specific data inputs (eg, a product’s research and development costs, costs of production). This approach strays from more traditional health technology assessments and will require manufacturers to refocus their evidence-generation strategies to meet the needs of the program’s unique definition of “value.”

Advance your value assessment strategy

The evolving value assessment landscape – including shifting payer trends, ICER’s updated value assessment methods, and the implementation of IRA’s drug pricing provisions – will have broad implications for healthcare stakeholders. Xcenda experts can provide insights and guidance to support organizations in the development of a comprehensive value assessment strategy.

_{1 Ortman E, Westrich K, Buelt L. Driving Progress in U.S. Value Assessment. January 2023. Available at: https://www.phrmafoundation.org/wp-content/uploads/2023/01/Driving-Progress-in-U.S.-Value-Assessment_PhRMA-Foundation.pdf}

_{² Xcenda. Advisor networks: Managed care network. https://www.xcenda.com/solutions-advisor-networks/managed-care-network}

_{³ Schnipper LE, Davidson NE, Wollins DS, et al. Updating the American Society of Clinical Oncology value framework: Revisions and reflections in response to comments received. J Clin Oncol. 2016 Aug 20;34(24):2925-34. doi:10.1200/JCO.2016.68.2518 2.}

_{⁴ Drug Pricing Lab. DrugAbacus FAQs.  https://www.drugpricinglab.org/tools/drug-abacus/methods/ National Comprehensive Cancer Network.}

_{⁵ Institute for Clinical and Economic Review. ICER value assessment framework. October 2020. https://icer.org/wp-content/uploads/2020/11/ICER_2020_2023_VAF_02032022.pdf}

_{⁶ Innovation and Value Initiative. Open-source value project. https://www.thevalueinitiative.org/open-source-value-project/}

_{⁷ NCCN clinical practice guidelines in oncology (NCCN guidelines) with NCCN Evidence Blocks. http://www.nccn.org/evidenceblocks/}

_{8 Westrich K, Hydery T, Dharbhamalla V. et al. Payer Perceptions and Use of Value Assessment Tools in the United States. JMCP. Forthcoming, May 2023.}

_{⁹ Brogan AP, Hogue SL, Vekaria RM, Reynolds I, Coukell A. Understanding payer perspectives on value in the use of pharmaceuticals in the United States. J Manag Care Spec Pharm. 2019;25(12):1319-27. doi:10.18553/jmcp.2019.25.12.1319}

_{¹⁰ Choi M, Hydery T, Tan R, Tennant L. Trends in the uptake and impact of the Institute for Clinical and Economic Review value assessment framework in payer coverage decisions from 2016 to 2020. 2021. Poster presented at: AMCP Virtual Meeting; April 12-16, 2021. https://www.xcenda.com/-/media/assets/xcenda/english/content-assets/conference-and-poster-presentations/2021/trends-uptake-impact-icer-value-assessment-framework-payer-coverage-decisions-2016-2020.pdf}

_{¹¹ Faraci D, Ha J, Ijioma S, Wissinger E, Tan R. The current impact of ICER assessments on payer decision making. Poster presented at: ISPOR 2022; May 15-18, 2022; Washington, DC. https://www.xcenda.com/-/media/assets/xcenda/english/content-assets/conference-and-poster-presentations/2022/2022-ispor-icer-payer-perspectives-poster.pdf}

_{¹² Slomiany, M, Madhavan, P, Kuehn, M, & Richardson, S. Value frameworks in oncology: Comparative analysis and implications to the pharmaceutical industry. Am Health Drug Benefits. 2017;10(5):253-60.}

_{¹³ Institute for Clinical and Economic Review. ICER Public Webinar: Advancing Health Technology Assessment Methods that Support Health Equity. March 21, 2023. Available at: https://youtu.be/dyDt35fXlns}