NPC Comments on ICER's Value Assessment Methods for Single or Short-Term Transformative Therapies

September 6, 2019

Steven D. Pearson, MD, MSc, FRCP
Institute for Clinical and Economic Review
One State Street, Suite 1050
Boston, MA 02109 USA

RE: Value Assessment Methods for Single or Short-Term Transformative Therapies
Submitted electronically via:

Dear Dr. Pearson:

The National Pharmaceutical Council (NPC) shares your interest in promoting a dynamic, innovative health care system and in placing scientific methods of evidence analysis and transparency at the heart of value assessment processes. With this view in mind, NPC appreciates ICER’s call for public comments on the Value Assessment Methods for “Single or Short-Term Transformative Therapies (SSTs).” [1]

NPC is a health policy research organization dedicated to the advancement of good evidence and science, and to fostering an environment in the United States that supports medical innovation. NPC is supported by the major U.S. research-based biopharmaceutical companies. We focus on research development, information dissemination, education and communication of the critical issues of evidence, innovation and the value of medicines for patients. Our research helps inform critical health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible.

Although ICER’s proposed updates provide several incremental improvements to its framework to better support analysis of SSTs, further revision and refinement of the framework is necessary. The areas requiring further revision include: 1) definition of SSTs, 2) characterization of uncertainty, 3) representation of societal benefits, and 4) handling of affordability concerns.

Our comments below are organized around the sections included in the Proposed Adaptations to the ICER Value Assessment Framework dated August 6, 2019.

1. Determining those treatments for which adapted assessment methods will be used

ICER’s definition of SSTs is somewhat ambiguous. For instance, the current SST definition may be interpreted to include vaccines and all anti-infective therapies. We do not believe this to be ICER’s intention. It is NPC’s recommendation that further SST inclusion and exclusion criteria be developed.

In addition, the current definition may be interpreted to include curative therapies that are not biopharmaceuticals (e.g., implantable cardioverter defibrillator), which NPC views as positive. As stated in NPC’s Guiding Practices for Patient-Centered Value Assessment, “Value assessments should focus broadly on all aspects of the healthcare system, not just on medications.” [2] It is NPC’s recommendation that non-biopharmaceuticals be included in ICER’s portfolio of SST evaluations.

2.    Assessing and Describing Uncertainty

NPC appreciates that ICER has taken steps to improve its value assessment framework to better account for the greater uncertainty associated with SSTs.  Positive steps include the use of a lifetime horizon for the primary value-based price estimate, the incorporation of additional modeling techniques such as cure proportion modeling, the inclusion of multiple time horizon thresholds, and probabilistic sensitivity analysis.

However, we are concerned that the proposed measures will not adequately communicate the significant uncertainty associated with SST population-based value price estimates. The recommendations below are actions that ICER could take to improve both the credibility and transparency of proposed methods to address uncertainty.
Including Upside Risk
The proposed adaptations include the use of probabilistic sensitivity analysis (PSA), which is a powerful tool for conveying uncertainty. However, ICER’s planned application is limited to the inclusion of an outcomes-based contracting recommendation when 25% of PSA simulations exceed the $200,000 per quality adjusted life-year (QALY) threshold. As currently planned, PSA will only be used to highlight downside risk for payers. However, there is also upside potential as uncertainty swings both ways.
Identifying the full range of prices is important for two reasons: 1) credibility requires full transparency of SSTs’ value-based price estimate uncertainty, and 2) the inclusion of potential upside will identify ways for payers to extract greater value which is equally important to managing downside risk for SSTs. PSA provides a way in which ICER can fully characterize and communicate both the upside and downside uncertainty associated with its estimates. Therefore, it is NPC’s recommendation that ICER provide a PSA estimated price range both on the upside and the downside in both its Final Report and its Report-at-a-Glance.

Including Tornado Charts in Report-at-a-Glance
ICER’s stated goal of PSA is to identify where outcomes-based agreements are needed to manage risk. Tornado charts are a good way to achieve this goal as they identify sources of risk and uncertainty, which will enable payers to more effectively manage these therapies. It is NPC’s recommendation that tornado charts, which are currently included in the Final Report, be included as part of the Report-at-a-Glance.

Including Value to Individual Responder by Duration of Response
The proposed inclusion of multiple time horizons is a positive step toward facilitating the use of outcomes-based agreements. However, it does not go far enough. Population-based estimates of a “fair price” may be fine for those payers who do not wish to participate in outcomes-based agreements, but will not be adequate for those payers trying to maximize the value of each dollar spent.

Many of the traditional gene therapies have small patient populations. This is also true for many of the SSTs in the oncology space. Given the small size of these treatment populations, population estimates are highly unlikely to truly reflect the value experience within any given plan. Plans desiring to more actively manage this risk will need information beyond population estimates.

Fortunately, these information requirements are clear from payment techniques being developed by MIT NEW Drug Development ParadIGmS (NEWDIGS) Financing and Reimbursement of Cures in the US, Alliance for Regenerative Medicine, Duke-Margolis Value-Based Payment Consortium, Network for Excellence in Health Innovation and others. [3,4] Specifically, these plans would need to know the value of an individual responder by duration of response. A general example is provided below, but the outcomes of interest and duration of response in years would need to be customized for each disease.

Duration of Response in Years  |  Value Based Price Estimate for Individual Responder
    1                                             | Value Based Price Range 1
    2                                             | Value Based Price Range 2
    3                                             | Value Based Price Range 3
     ⸽                                             |               ⸽
   10                                            | Value Based Price Range 10

This information presented in the above chart is readily accessible as it is included within the models used to estimate the population-based value price. Therefore, it is NPC’s recommendation that the value of a responder by duration be included in the Final Report and Report-at-a-Glance as a supplement to the population-based estimates.

Replace Outcomes-Based Contracting (OBC) Recommendation with OBC Considerations Chart
The proposed adaptations include an outcomes-based contracting recommendation when 25% of PSA simulations exceed the $200,000 per QALY threshold. However, the decision on whether or not to engage in OBC is based on a multitude of factors that extend beyond a single threshold including economies of scale, feasibility of measuring outcomes, regulatory barriers, administrative burden, and payer contracting abilities. [5] Therefore, it is NPC’s recommendation that ICER provide a chart that captures the various outcome considerations for a given therapy rather than a binary recommendation of whether or not to participate in OBC. Beyond the percent of PSA simulations in excess of $200,000, this chart could identify:

  • Dollars at stake per person and plan (for a fixed number of plan sizes)
  • Which outcomes, if any, lend themselves to OBC

Incorporate New Evidence When Possible
ICER’s proposed changes to its broader value assessment framework include a proposal to conduct a review of new evidence developments one year after the final report is issued. [6] This review would indicate whether a new review is required, the evidence does not justify a new review, or if the prior estimates are still valid. [6] Shortening the timeframe between reviews provides an opportunity to remove uncertainties with the incorporation of new evidence, including real-world evidence (RWE).

SSTs, by their nature, have greater uncertainty that will be reflected in the value-based price estimates. Shortening the time between SST review cycles provides an opportunity for the incorporation of new evidence, such as registries. Clinical registries are a potential source of longitudinal clinical data for a population that is more heterogeneous than what is represented in a clinical trial.  This is just one example of how new evidence could be a valuable source of information to reduce uncertainty in SST value-based price estimates. [7] NPC recommends that ICER both check for new evidence development on annual basis after the final report and incorporate new evidence (when available and suitable) in revised estimates for SSTs.  

3.    Additional Elements of Value
We are pleased that ICER will add an additional element of value to better reflect the unique nature of these therapies. However, we believe that this step does not go far enough as the incorporation of the full benefits into value assessment is important. [8,9] This is critical for “potential cures” as the magnitude and type of benefits produced are much greater than the benefits traditionally captured in the QALY. Examples include caregiver burden, employer productivity gains, and insurer value. It is critical that these benefits be quantified where data allows.

Furthermore, it is our belief that these benefits need to be quantified in a manner similar to ultra-rare diseases where the societal benefit is presented as a co-base case. Per the addendum for rare diseases, “When the impact of treatment on patient and caregiver productivity, education, disability, and nursing home costs is substantial and these costs are large in relation to health care costs, ICER will present its base case health system perspective model results in tandem with the results of a scenario analysis inclusive of broader societal costs. Similarly, a value‐based price benchmark (VBPB) linked to the societal perspective analysis will be presented alongside the standard VBPB.” [10] For these reasons, it is NPC’s recommendation that the societal scenario be presented as a co-base case for all therapy evaluations including SSTs.

Under the current approach, a subjective approach is used to evaluate additional elements of value to determine whether or not the cost per QALY threshold should be toggled. The addition of an element that may negatively impact this threshold highlights the need to have a structured transparent decision process for the cost per QALY threshold. Therefore, it is NPC’s recommendation that ICER use a scientifically robust method such as Multi-Criteria Decision Analysis (MCDA) or a similar process to evaluate whether the cost per QALY threshold should be toggled as a result of non-quantifiable elements of value.

4.    Affordability and Fair Sharing of Economic Surplus
As noted in the technical brief, ICER believes that many cures will not only substantially extend life, but will also create substantial cost savings. [11] In today’s world, developers typically “price in” these cost savings. However, ICER is concerned that this approach will lead to unreasonably high prices. NPC believes that the benefits of the proposed approach, which adds a scenario where cost offsets that occur after 12 years are not considered, are outweighed by the risks, including the potential to create negative incentives for innovation.

The technical appendix includes examples using this approach on spinal muscular atrophy (SMA) type 1, hemophilia A, and B-cell lymphoma therapies. Only hemophilia A had a substantial reduction to the value-based price. The changes to the value-based prices for SMA type 1 and B-cell lymphoma therapies were marginal. This analysis highlights that diseases with large ongoing cost offsets, such as hemophilia A, are likely to occur on a less frequent basis.

In addition, the conditions with the highest potential budget impact are likely to have competition that drives down costs over time, thus mitigating the risk of “value-based prices of extreme levels.” Hepatitis C provides a recent example of the impact of competition driving down treatment costs when the market attracts multiple entrants. There are five therapies for hemophilia A currently in clinical trials, which is a strong indicator of future competition. [12] All of these factors point to the benefits of the proposed approach being limited.

More importantly, NPC fears that treating SSTs differently than ongoing therapies has the potential unintended consequence of creating economic inefficiencies by incentivizing ongoing therapies over curative therapies. Specifically, NPC is concerned that ignoring cost offsets beyond 12 years will penalize conditions where the most important outcomes and costs avoided occur beyond the 12-year time horizon. ICER’s technical analysis is limited to conditions where there are either recurring cost offsets (hemophilia A) or where the expected patient survival is several years or less under current treatment options (SMA type I, B-cell lymphoma).

This is not an adequate disease mix representation. It is our opinion, that if the analysis included metabolic, cardiovascular, neurological (e.g. Alzheimer’s disease) and ophthalmic conditions that the proposed approach would significantly favor ongoing therapy over SSTs due the long-time horizon associated with key outcomes. For instance, a cure for Alzheimer’s disease given at age 50 might not avoid major costs until age 65. Similarly, a cure for cardiovascular disease given at age 50 might not generate significant savings until a decade later. In these scenarios, the proposed approach will favor ongoing therapies over SSTs.

This incentivizes an inefficient health system, which is not desirable. This point is especially salient because analyses by MIT have found that gene therapies are expected in these very conditions over the next 10 years. [13,14,15] Given the marginal impact on value-based price estimates and potential for unintended consequences, NPC recommends that ICER not include the sharing of economic surplus approach as a standard part of its reports.

We appreciate the opportunity to provide input on the key methodological questions associated with Value Assessment Methods for “Single or Short-Term Transformative Therapies (SSTs).” [16]

We look forward to continued dialogue as this project moves forward.

Respectfully submitted,
Robert W. Dubois, MD, PhD
Chief Science Officer & Executive Vice President
National Pharmaceutical Council

[1] Value Assessment Methods for “Single or Short-Term Transformative Therapies” (SSTs).  Institute for Clinical and Economic Review. Published August 6, 2019. Available at: Accessed August 16, 2019.  

[2] Guiding Practices for Patient-Centered Value Assessment. National Pharmaceutical Council. Accessed August 19, 2019.  

[3] Barlow J, Teagarden R, Trusheim M. Precision Financing of Durable, Potentially Curative Therapies. PharmExec. Published January 27, 2019. Available at:   Accessed August 19, 209.

[4] Massachusetts Institute of Technology New Drug Development Paradigms Initiative. Precision Financing Solutions for Durable/Potentially Curative Therapies. Published January 24, 2019. Available at: Accessed August 19, 2019.

[5] Regulatory Barriers Impair Alignment of Biopharmaceutical Price and Value.  National Pharmaceutical Council. Published April 17, 2018.  Available at  Accessed August 16, 2019.

[6] 2020 Value Assessment Framework Proposed Changes. Institute for Clinical and Economic Review. Published August 21, 2019.  Available at:  Accessed September 4, 2019

[7] Kliklich RE, Dreyer NA, Leavy MB, editors. Registries for Evaluating Patient Outcomes: A User's Guide [Internet]. 3rd edition. Rockville (MD): Agency for Healthcare Research and Quality (US); 2014 Apr. Available from:

[8] Sanders GD, Neuman PJ, Basu A, et al. Recommendations for Conduct, Methodological Practices, and Reporting of Cost-effectiveness Analyses. JAMA. 2016; 316(101): 1093-1103.

[9] Wilke RJ, Neumann PJ, Garrison LP, Ramsey SD. Review of Recent US Value Frameworks – A Health Economics Approach: An ISPOR Special Task Force Report. Value in Health. 2018 Feb;21(2):155-160.

[10] Modifications to the ICER value assessment framework for treatments for ultra‐rare diseases. Institute for Clinical and Economic Review. Published November 2017. Available at: Accessed August 19, 2019.

[11] Value Assessment Methods and Pricing Recommendations for Potential Cures:
A Technical Brief. Institute for Clinical and Economic Review. Published August 6, 2019.  Available at: Accessed August 16, 2019

[12] Doshi BS, Arruda VR. Gene therapy for hemophilia: what does the future hold? Ther Adv Hematol. 2018;9(9):273–293. doi: 10.1177/2040620718791933.

[13] Massachusetts Institute of Technology New Drug Development Paradigms Initiative. Research Brief: Clinical Trials and Investment for Novel CAR-T and TCR Therapies. Published December 21, 2018. Available at: Accessed August 19, 2019.

[14] Massachusetts Institute of Technology New Drug Development Paradigms Initiative. Research Brief: Projections from the Existing Pipeline of Cell and Gene Therapies: Launches and Patient Numbers. Published October 29, 2018. Available at: Accessed August 19, 2019.

[15] Quinn C, Young C, Thomas, J, et al. Estimating the Clinical Pipeline of Cell and Gene Therapies and Their Potential Economic Impact on the US Healthcare System. Value in Health. 2019 June; 22(6):621-626

[16] Value Assessment Methods for “Single or Short-Term Transformative Therapies” (SSTs). Institute for Clinical and Economic Review. August 6, 2019.  Accessed August 16, 2019.