Can Pharmaceutical Pricing Move Beyond Cost QALY for Value Consideration?
Mark Bounthanvong, PharmD, PhD, UCSD Skaggs School of Pharmacy & Pharmaceutical Sciences, San Diego, CA, USA; and Enrique M Saldarriaga, MS, The Comparative Health Outcomes, Policy, and Economics (CHOICE) Institute, University of Washington, Seattle, WA, USA
Advances in gene therapy have sparked discussions about its value both from a therapeutic and economic perspective. Gene therapy is an innovative treatment that modifies or manipulates the altered or mutated gene for therapeutic purposes.1 Gene therapy works by augmentation or inhibition. Augmentation involves the introduction of a “healthy” gene into a cell to replace the “unhealthy” gene to treat a disease. Inhibition involves the introduction of a “good” gene to inactivate or inhibit the “bad” gene that is causing a disease. There are a variety of gene therapies and they include plasmid DNA, viral vectors, bacterial vectors, human gene editing, and patient-derived cellular gene therapy products.2 Currently, there are more than 20 FDA-approved cellular and gene therapy products with most focusing on rare diseases.3
The therapeutic value of gene therapies is unique because it has the potential to cure, which is atypical for pharmaceutical products that usually seek to control or maintain a disease. Therefore, assessing its value using existing frameworks may be insufficient to achieve a proper ascertainment. In this educational symposium, Omar Dabbous, MD, MPH (Novartis Gene Therapies, Inc, USA) led a discussion about the value assessment of gene therapy with Sean D. Sullivan and Michael F. Drummond. The panelists discussed the pricing factors beyond cost and QALY considerations for gene therapies.
"Currently, there are more than 20 FDA-approved cellular and gene therapy products with most focusing on rare diseases."
Dabbous provided an introduction to gene therapies and the challenges associated with economic analysis of benefits and value of gene therapies. He remarked that, “Current follow-up durations are too short to evaluate long-term outcomes, so the costs of gene therapies may be underestimated.” Moreover, limitations of randomized controlled trials and uncertainties around long-term efficacy and safety make it difficult to assess treatment benefits and cost-effectiveness. Ultimately, realizing long-term value will help inform models and decision makers to properly assess the value of gene therapies. Dabbous concluded, “New methodologies and modeling approaches need to be adopted to ensure adequate demonstration of benefits and value of gene therapies.”
"Limitations of randomized controlled trials and uncertainties around long-term efficacy and safety make it difficult to assess treatment benefits and cost-effectiveness."
Michael F. Drummond, MCom, DPhil (University of York, UK) gave a presentation that focused on how gene therapies are currently valued in health technology assessments (HTAs), including added clinical value and cost per QALY approach. According to Drummond, “no special methods or programs exist for rare disease treatments, including gene therapies.” Moreover, consideration for gene therapy is mostly qualitative. However, the severity of the disease may be quantitatively addressed by weighing QALYs or estimating QALY shortfall. QALYs have been a cornerstone for HTA frameworks for the past several decades. However, its limitation may impede accurate and valid value assessment of gene therapy. Drummond pointed out that there are other values to consider, such as the domains on the ISPOR Value Flower, and he provided examples from Sweden, Scotland, and NICE who incorporated other considerations outside of QALYs. For example, Drummond noted that NICE considered “modifiers for innovation, magnitude of treatment benefit, severity, health inequality, and uncertainty.” On the topic of QALY shortfall, Drummond illustrated how NICE applied a severity modifier to address proportional and absolute QALY shortfall. These modifiers may be helpful to assess gene therapy, but it is unclear how these modifiers are used. To address this, Drummond introduced a checklist that he and his team developed to identify contextual considerations used for value assessment. Ultimately, more consideration should be given to research methods to quantify novel elements of value and development of an equity modifier for use in decision making.
"QALYs have been a cornerstone for HTA frameworks for the past several decades. However, its limitation may impede accurate and valid value assessment of gene therapy."
In the final presentation, Sean D. Sullivan, PhD (University of Washington, USA) focused on quantifying the value elements for cost-effectiveness. Sullivan indicated that there are no special methods for evaluating the cost-effectiveness for gene therapies. He added that, “Novel valuation strategies should be considered to encompass the contextual consideration and other benefits of gene therapy in patients with rare, severe, debilitating, hereditary disease.” Sullivan shared that the ISPOR Value Flower has several elements that should be considered (eg, incorporating severity of illness, accounting for equity, quantifying insurance value, quantifying hope, quantifying option value). According to Sullivan, treatments for low-severity illness are likely overvalued by a factor of >2 and treatments for high-severity conditions are likely undervalued by a factor of >5. He also pointed out that using alternatives to QALYs may address the equity issue. Equal Value of Life (EVL) and Health Years in Total (HYT) may offer advantages over the QALY. Sullivan stated that quantifying insurance value is an important consideration and that reducing variance in health outcomes can add to the insurance value. In regards to hope, Sullivan highlighted a study by Lakdawalla that reported that patients would pay for ”hopeful therapy” up to $54,000. Lastly, Sullivan discussed the importance of option value where treatment is used as a bridge for another therapy option such as a future medication that offers improved outcomes. He concluded by listing some questions that future studies should consider such as identifying the right discount rate for gene therapy, incorporating the cost of future disease due to late treatment effect, introduction of generic competitors, and using the appropriate time horizon.
As each panelist highlighted, there is still a lot of work that needs to be done to answer the question, “What are the benefits of gene therapies?” Despite these challenges, the panelists provide a potential road map for future investigations and research.
1. Gonçalves GAR, Paiva R de MA. Gene therapy: advances, challenges and perspectives. Einstein (Sao Paulo). 2017;15(3):369-375. doi:10.1590/S1679-45082017RB4024
2. Research C for BE and. What is Gene Therapy? FDA. Published online December 9, 2020. Accessed May 17, 2022. https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/what-gene-therapy
3. Research C for BE and. Approved Cellular and Gene Therapy Products. FDA. Published online March 1, 2022. Accessed May 17, 2022. https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/approved-cellular-and-gene-therapy-products