ICER Thresholds in Cost-Utility Analysis: Assessing Conceptual Relevance and Practical Adequacy for Drug Reimbursement Decision-Making in The US
Author(s)
Ulrich Neumann, BA, BSc, MA, MBA, MSc1, Michael Ciarametaro, BS, MA, MBA2, Jordan T. Banks, BS, MPP, PhD2;
1Johnson & Johnson, Director, Scientific Affairs at J&J, Titusville, NJ, USA, 2Avalere Health, Washington, DC, USA
1Johnson & Johnson, Director, Scientific Affairs at J&J, Titusville, NJ, USA, 2Avalere Health, Washington, DC, USA
OBJECTIVES: Cost-effectiveness (CE) methods have been widely debated by health economists as well as practitioners in systems around the world. In the US, recent policy discourse on CE has left the role of CE thresholds (CET) as reimbursement ceilings underexplored. This research contributes an evidence-based analysis of conceptual and practical considerations on CET relevant to US decision-makers.
METHODS: A targeted literature review evaluated scientific evidence across five CET domains: implementation experiences, contextual factors, political and ethical considerations, technical questions, and US relevance. Two rounds of semi-structured, double-blinded in-depth interviews (5 ex-US and 5 US experts) examined international applications and US-specific transferability. Insights from literature and interviews were systematically coded and thematically synthesized.
RESULTS: Numerous articles in the pharmacoeconomic literature examine approaches to standardize CET setting and implementation, yet practical experiences with CET show considerable variability in application, ranging from rejection in some countries to adoption of arbitrarily set CET levels, use of bypass mechanisms, or contextual adjustments to ease implementation in others. Interviewees express skepticism about CET's effectiveness in enhancing value-for-money resource allocation, while highlighting unresolved conceptual tensions regarding its effects on market competition and dynamic efficiency. Factors including heterogeneous population needs, diverse stakeholders, and prioritization of individual preferences are suggested as significant barriers to adopting mechanistic CET approaches. US decision-makers express preference for flexible, localized agency over uniform, predetermined thresholds.
CONCLUSIONS: This qualitative study finds substantial differences between the objective functions of different US payers (e.g. employers) and fundamental assumptions underlying CE approaches especially based on QALY-maximization (e.g., uniform valuation of health gains, fixed budgets, centralized health priorities). Across the US, local production functions vary widely due to differing payer populations and priorities. Our research highlights a dissonance between CET and the needs of a decentralized US healthcare system, warranting consideration by academics and policymakers.
METHODS: A targeted literature review evaluated scientific evidence across five CET domains: implementation experiences, contextual factors, political and ethical considerations, technical questions, and US relevance. Two rounds of semi-structured, double-blinded in-depth interviews (5 ex-US and 5 US experts) examined international applications and US-specific transferability. Insights from literature and interviews were systematically coded and thematically synthesized.
RESULTS: Numerous articles in the pharmacoeconomic literature examine approaches to standardize CET setting and implementation, yet practical experiences with CET show considerable variability in application, ranging from rejection in some countries to adoption of arbitrarily set CET levels, use of bypass mechanisms, or contextual adjustments to ease implementation in others. Interviewees express skepticism about CET's effectiveness in enhancing value-for-money resource allocation, while highlighting unresolved conceptual tensions regarding its effects on market competition and dynamic efficiency. Factors including heterogeneous population needs, diverse stakeholders, and prioritization of individual preferences are suggested as significant barriers to adopting mechanistic CET approaches. US decision-makers express preference for flexible, localized agency over uniform, predetermined thresholds.
CONCLUSIONS: This qualitative study finds substantial differences between the objective functions of different US payers (e.g. employers) and fundamental assumptions underlying CE approaches especially based on QALY-maximization (e.g., uniform valuation of health gains, fixed budgets, centralized health priorities). Across the US, local production functions vary widely due to differing payer populations and priorities. Our research highlights a dissonance between CET and the needs of a decentralized US healthcare system, warranting consideration by academics and policymakers.
Conference/Value in Health Info
2025-05, ISPOR 2025, Montréal, Quebec, CA
Value in Health, Volume 28, Issue S1
Code
HPR64
Topic
Health Policy & Regulatory
Disease
No Additional Disease & Conditions/Specialized Treatment Areas