This post is part of the Health Affairs Blog short series, “Value Assessment: Where Do We Go Post-COVID?” The series explores what we have learned about value assessment and related issues during the coronavirus pandemic, how we might think about value in health care going forward, and how these ideas might translate into policy. The series is produced with the support of the Innovation and Value Initiative (IVI) and grew out of a group of webinars hosted jointly by IVI and ISPOR—The Professional Society for Health Economics and Outcomes Research. Included posts are reviewed and edited by Health Affairs Blog staff; the opinions expressed are those of the authors.
Public insurance programs and private insurance plans must develop criteria for deciding which drugs to cover, for which patients, and under which conditions. For this they need to assess the incremental clinical and social contribution of new products and compare them to the products already on the market. These assessments then must be weighed against the incremental spending likely to be incurred. Implicitly, if not explicitly, insurers must conduct a health technology assessment (HTA).
In the multi-payer US system, each public program, private insurer, and self-insured employer conducts its own assessments. Most are done without explicit attention to the quality of the evidence and without providing the documentation that would be needed for stakeholders to understand what has been decided and on which grounds. None are coordinated with the others, generating a duplication of effort and an increase in administrative burden for physicians and patients.
European nations have developed a much more formal approach to HTA, with governmentally managed or mandated bodies that evaluate new drugs and issue recommendations for insurance coverage and pricing. While the national assessments typically devote more explicit attention to the quality of the evidence than do their US counterparts, they too suffer from lack of coordination, duplication of effort, opacity for physicians, and uneven access to care for patients.
In recognition of the problems caused by the diversity of technology assessments, the European Union has been engaged in a 20-year process of harmonization, with the hope of moving towards a single process and outcome for each innovative therapy. This effort has run into fiercely held opinions on methods and a jealous regard for local prerogatives. The voluntary harmonization initiative, dubbed EUnetHTA, produced a framework (i.e., HTA Core Model) and some joint assessments for individual drugs, but never achieved standardization. This year the European Union put the voluntary effort out of its misery and mandated a new approach.
Heterogeneity In HTA Principles And Methods
Any effort at HTA harmonization must grapple with the numerous dimensions in which methods of assessment can, and frequently do, differ. A partial list would include:
- Is incremental clinical benefit to be measured through a cardinal index (e.g., Quality Adjusted Life Years) or an ordinal index (e.g., no incremental benefit, minor improvement, major improvement)?
- What should be chosen as the comparator product against which each innovation is assessed? What if the standard of care differs across regions or populations?
- Should the analysis include formal cost-effectiveness analysis or restrict itself to comparative clinical performance?
- Should costs be measured from the perspective of the payer or from a broader perspective that accounts for burdens on family members, productivity, and other non-medical factors?
- What should be the role of key stakeholders, including payers, manufacturers, physician organizations, and patient advocacy organizations?
- How transparent should the assessment process be, and how extensive should the documentation of its conclusions be? How should potential conflicts of interest be managed?
- How is the principle of data privacy to be balanced against the principle of requiring data to be representative of subpopulations and across clinical contexts?
Navigating Between Centralization And Fragmentation
The European effort can be traced back to 2006 and the creation of EUnetHTA collaboration, with the initial goal of harmonization and the aspiration of creating a single European assessment entity. EUnetHTA generated white papers on methodological questions but the payers in each nation proved reluctant to adopt joint assessments, valuing national autonomy over Europe-wide harmonization, and continued to insist on local assessments. Frustration grew with the slow pace of progress. In 2018, the European Commission proposed to the European Parliament a mandatory process, which will come into force by the end of this year.
The approach adopted by the European Parliament seeks to steer between the twin perils of excessive centralization and excessive fragmentation. The new process does not seek a supra-national organization and single set of assessment criteria but also no longer relies on voluntary cooperation. Under the new legislation, a European-level Coordination Group, with technical representatives from each of the 27 member states, will select teams for the assessment of new drugs and devices. The teams likely will be drawn from staff at the national HTA entities (e.g., AIFA in Italy, IQWIG in Germany, HAS in France) depending on which entity has already developed expertise in the therapeutic domain. Individual nations must consider the joint assessments but may supplement them with additional data or methods.
The joint assessments will be written in English and published. In contrast, the national HTA assessments typically are written in the local language, and many are not published. This transparency will permit side-by-side comparisons and hopefully stimulate discussion of best practices. National HTA entities probably will be required to explain and justify deviations from the joint assessments.
One example of potential deviation from the joint assessments comes in the choice between cardinal measures of clinical impact (e.g., Quality Adjusted Life Years) and ordinal measures (e.g., minor versus major impact). Nations that have used QALYs as part of their local assessments may convert ordinal measures of impact into cardinal measures if the joint assessment does not already use them. It is unlikely that the joint assessments will use QALYs because Britain, the primary advocate of the metric, has exited the Union while France and Germany, the largest remaining members, do not favor QALYs.
Another example of deviation from joint assessments could occur in nations where the standard of care, and hence relevant comparator therapy, differs from that selected by the team appointed by the Coordination Group. These deviations in comparators often occur due to differences in policies across nations with respect to adoption of generics and biosimilars and in coverage policies for expensive orphan drugs.
Each nation will retain independence in deciding on coverage policy and pricing, and hence on patient access to novel therapies, according to their budgetary capabilities. Over the long term, coverage and pricing decisions are likely to converge across nations. Citizens are unlikely to accept uneven access policies across nations. The experience with popular insistence on access to COVID vaccines and willingness to travel across borders for access may serve as a lesson.
Implications For The United States
The status quo of non-transparent, non-scientific, and non-accountable technology assessment in the United States is not sustainable. Physicians are burdened with complex and contradictory requirements for prior authorization and step therapy. Consumers cannot discern whether their needed drug is covered by the health plan in which they are considering enrolling. Patients can be forced to switch treatments when they change plans or when their plan changes its formulary. The system accentuates distrust among all stakeholders.
It might seem logical for US payers to agree on a single set of assessment criteria and a single process for translating technology assessments into decisions over coverage, prior authorization, and pricing. But the European experience suggests caution. Payers have different budgets, cultures, and forms of stakeholder engagement. None is eager to abandon its home-grown process, no matter how flawed, for one developed elsewhere. This is especially true if the potential authority is viewed as a domineering governmental bureaucracy, a self-interested private firm, or a non-accountable nonprofit organization.
In the European context, historical rivalries impede transfers of authority from national to supra-national entities. In the US context, ideological perspectives on the appropriate division of labor between the public and private sectors impede efforts to establish a variant of the erstwhile Congressional Office of Technology Assessment, much less a full-blown imitation of a European agency. Within the private sector, collaboration on technology assessment is impeded by rivalry among competitors, the prerogatives of self-insured employers, and legal prohibitions against anything that could be interpreted as collusion.
The US path towards health technology assessment could follow a path analogous to that of the European efforts. The first step would be increased transparency on the inputs to the process, in terms of which evidence is used and how it is weighed, and on the outcomes, in terms of the coverage criteria chosen for individual products. This would allow each payer’s process to be compared with the others and with the methods used by physician specialty societies, governmental entities such as the Patient-Centered Outcomes Research Institute, academic initiatives such as the Second Panel on Cost-Effectiveness in Health and Medicine, and independent third parties such as the Institute for Clinical and Economic Review. The side-by-side comparability of evidence and methods could promote the adoption of best practices. The publication of coverage decisions, including formulary inclusion, processes for prior authorization, and requirements for step therapy, could better support physician prescription and patient adherence.
No one is going to force the public Medicare program, private Medicare Advantage plans, commercial insurers, Pharmacy Benefit Managers, state Medicaid agencies, and the Veterans Administration to adopt a single approach to technology assessment, coverage, and pricing. But with transparency, a coalition of the willing, and pressure from stakeholders to reduce complexities and inequities, the US may yet find some method in the madness of health technology assessment.