State Legislatures Explore How to Measure a Drug’s Value

September 28, 2021

What is a vaccine, a cure or a life-altering medication worth? As more state legislatures across the country explore this very question, their answers – and their methods – may not sync with their constituents’ values. 

Some Patients are Marginalized 

Several states are considering legislation on how to assess the value of prescription drugs, while a few have already passed bills on the topic. Their efforts have a laudable intent – to lower drug prices for the public. But the means may not justify the ends. 

In some cases, states plan to assess prescription drugs’ value using a controversial metric known as the quality-adjusted life year, or QALY. In Europe and elsewhere, the QALY functions essentially as a tool for health care rationing.  

The metric looks at a drug’s value over time with the goal of determining how many years of “perfect” health the drug might offer. That approach can have drawbacks, especially for chronically ill patients who, even at their best, won’t experience “perfect” health. It also marginalizes older patients, who have fewer years ahead of them to benefit from treatment. 

Assessments rooted in the QALY are more likely to find that drugs for these groups are not “worth it.” By undervaluing drugs that could be life-altering for these populations, the QALY is inherently discriminatory. 

Importing Boston’s Health Economics 

The QALY is also a mainstay of a controversial group of Boston economists known as the Institute for Clinical and Economic Review. Self-described as the nation’s drug pricing watchdog, ICER analyzes the cost-effectiveness of new medications from a public health perspective. Their reviews typically come to the same conclusion: The new drug, whatever its benefit to patients, doesn’t offer what they consider good value.  

These reports go on to justify insurance companies in limiting or denying coverage for the drugs in question. 

ICER’s use of QALY to analyze cost-effectiveness has led to complaints that its methods are discriminatory and inappropriate. This group’s aggressive public assessment of new drugs has also led to criticism that it might be preempting the role of the FDA. 

Stopping Discrimination in its Tracks 

Not all states are embracing discriminatory tactics or the organizations that champion them. Several states, for example, are going down the path of banning the QALY.  

These efforts would stop states from institutionalizing measures that discount the value of specific patient groups. They also have the potential to protect the right of individual patients to determine, together with their health care provider, which medications are “worth it” for them. 

The question of value in medicine is one that impacts all people. And the answers may lie, increasingly, with members of patients’ state legislatures, whose decisions could either preserve or jeopardize access to appropriate care. 

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