New Drugs and Medical Technologies Often Deemed “Cost-Effective but Unaffordable”

Published Mar 27, 2018

Experts Offer Pragmatic Approaches to Managing Tension Between Affordability and Cost-Effectiveness

Lawrenceville, NJ, USA—March 27, 2018—Value in Health, the official journal of ISPOR (the professional society for health economics and outcomes research), announced today the publication of a series of articles centered on affordability in healthcare. The special themed section, introduced by an editorial entitled Affordability of New Technologies: The Next Frontier, appears in the March 2018 issue of Value in Health. The guest editors for this themed section are Adrian Towse, MA, MPhil, Office of Health Economics, London, England, United Kingdom and Josephine Mauskopf, PhD, RTI International, Research Triangle Park, NC, USA.

The themed section includes 3 articles and 2 commentaries that examine the issue of affordability from different perspectives:
  • Affordability Challenges to Value-Based Pricing: Mass Diseases, Orphan Diseases, and Cures. Focusing on 3 specific contexts, Patricia Danzon, PhD, analyzes how value-based pricing can manage “affordability” challenges, defined as drugs that meet cost-effectiveness thresholds but are “unaffordable” within the short-run budget. Danzon argues that cost-effectiveness and budgets are linked but that over time the budget can adjust if people want it to.
  • The ICER Value Framework: Integrating Cost-Effectiveness and Affordability in the Assessment of Health Care Value. Steven D. Pearson, MD, MSc recounts the experience of seeing Sovaldi identified as ‘low value’ by his advisory committee members because the budget impact was “so significant that it over-rode what was acknowledged to be excellent cost effectiveness.” He details the journey that the Institute for Clinical Economic Review took in moving to adjust the price of a new treatment to reflect budget impact over and above the assessment of cost-effectiveness.
  • Paying for Cures: Perspectives on Solutions to the “Affordability Issue.” Sarah Schaffer, MSc and colleagues provide a commentary that reviews innovative payment solutions to address the affordability issue, drawing on discussions with payers in the United States and Europe on the feasibility of implementing any of these alternative solutions. They conclude that for the foreseeable future, affordability pressures will continue to be handled by aggressive price bargaining, high co-pays (in systems where this is possible), and restricting access to subgroups of patients.
  • Affordability of Health Care: A Global Crisis. In his commentary, John Watkins, PharmD, MPH, BCPS introduces and addresses several implicit affordability assumptions that should receive further scrutiny. Watkins calls for finding ways to eliminate paying for low-value products and unnecessary medical care, limiting the cost increases of high-value products, improving the efficiency of care delivery systems, and helping the public to understand the true societal impact of inefficiency.
Considering the points and perspectives raised in this collection of papers, Towse and Mauskopf reach several conclusions: 1) affordability matters, 2) more research is needed to understand the dynamics of healthcare affordability, 3) payer reluctance to adopt value-for-money treatments with high budget impact is understandable but risks distorting resource allocation, and 4) overall efficiency in healthcare needs to be improved.


  ABOUT ISPOR ISPOR, the professional society for health economics and outcomes research (HEOR), is an international, multistakeholder, nonprofit dedicated to advancing HEOR excellence to improve decision making for health globally. The Society is the leading source for scientific conferences, peer-reviewed and MEDLINE®-indexed publications, good practices guidance, education, collaboration, and tools/resources in the field. Web: | LinkedIn: | Twitter: (@ISPORorg) | YouTube: | Facebook: | Instagram: ABOUT VALUE IN HEALTH Value in Health (ISSN 1098-3015) is an international, indexed journal that publishes original research and health policy articles that advance the field of health economics and outcomes research to help healthcare leaders make evidence-based decisions. The journal’s 2016 impact factor score is 4.235. Value in Health is ranked 3rd out of 77 journals in health policy and services, 7th out of 347 journals in economics, and 9th out of 90 journals in healthcare sciences and services. Value in Health is a monthly publication that circulates to more than 10,000 readers around the world. Web: | Twitter: (@ISPORjournals)

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