In the contentious debate around US drug prices, the concept of fair access and how that might relate to fair pricing has received relatively little attention. This paper from ICER and OHE authors seeks to define fair access. It proposes Ethical Goals for Access and Fair Design Criteria for cost-sharing and prior authorisation protocols, and considers whether, if the price of a drug is a fair one, this should be linked to less restrictive protocols.
At the heart of all health insurance programs, public or private, lies inescapable ethical tension between two desired goals: first, that insurance allows patients and clinicians to choose those healthcare services they believe are most likely to save lives and improve the quality of life; and second, the need to make healthcare affordable, and to manage resources fairly within the budget constraints that exist throughout the entire health system.
Nowhere is this tension more fiercely debated today than in the area of health benefit design and coverage policy for pharmaceuticals. While patient groups, drug makers and payers can now talk (or argue) more concretely about what would be the ‘fair price for a drug’, a question far less examined is how to determine whether insurance coverage is providing ‘fair access to a drug’. This Open Access paper, by authors from ICER (Steve Pearson, Maria Lowe and Celia Segal) and OHE (Adrian Towse and Chris Henshall) sets out ethical goals and design criteria.
The key recommendations set out in the article are:
- The broader aim of cost-sharing should be to design the drug benefit in a way that addresses moral hazard and can steer patients to clinically appropriate lower-cost alternatives without undermining the basic purpose of insurance, which is to spread financial risk over broad populations to protect individuals from direct harm. Fair design criteria would allow payers to continue to use tiering and graduated cost-sharing where this poses minimal risks for harm; the case is made for allowing this even for drugs that are fairly priced, in order to leverage competition in hopes of even lower prices for all drugs in the class.
- Prior authorisation remains a reasonable policy tool, in principle, because without it, there is a risk – sometimes significant – for overuse or misuse of treatments, leading to harm for patients and wasted resources. If, however, a payer does not formally and transparently deem that a drug is unreasonably priced, then access to that drug should not be constrained by coverage criteria narrower than the language of the US FDA label.
- Step therapy policies can be justified in principle by payers’ obligation to seek the prudent use of limited healthcare resources, but they obviously have the potential to cause harm should patients not be able to receive the treatment that is the most clinically appropriate for them. The authors draw heavily upon work by Nayak and Pearson to propose that economic-step therapy policies can only achieve the ethical goals for access if they meet five fair design criteria.
To inform the development of the framework, the authors conducted a literature review and ten stakeholder interviews with representatives from patient community organisations, employer plan sponsors, pharmacy benefit managers (PBMs), commercial health plans, health policy research organisations, speciality medical organisations and health benefit consultants. Representatives from patient organisations and clinical speciality societies joined senior policy leaders from 25 payer and life science companies at a 2-day ICER Policy Summit in December 2019 to discuss an earlier version of this paper, debate the concept of fair access and provide suggestions for revisions to the framework proposed.
The ethical goals and design criteria are summarised in Table 1 of the paper. In combination with these ethical goals and design criteria, there are essential ‘implementation criteria’ that payers should follow. These criteria focus on elements of transparency, flexibility and appeals procedures without which even the best designs for cost-sharing provisions and prior authorisation protocols cannot achieve reasonable ethical outcomes. These implementation criteria are also presented in Table 1 of the paper and described in full detail in a separate White Paper available on both the ICER and OHE websites. A separate OHE blog summarised the White Paper.
The authors believe that there is broad consensus on key ethical goals for access, and that it is possible to translate the goals set out into fair design criteria to guide the development of specific policies, and, importantly, to provide a framework that patient groups, clinicians and all participants in the health system can all use to engage in discussions around the appropriateness of benefit designs and coverage policies.
Pearson S.D., Towse A., Lowe M., Segel C.S., and Henshall C. 2021. Cornerstones of ‘fair’ drug coverage: appropriate cost sharing and utilisation management policies for pharmaceuticals. Journal of Comparative Effectiveness Research. Available Open Access at https://www.futuremedicine.com/doi/10.2217/cer-2021-0027
Pearson S, Lowe M, Towse A, Segel C, Henshall C. 2020. Cornerstones of “Fair” Drug Coverage: Appropriate Cost-Sharing and Utilization Management Policies for Pharmaceuticals. ICER and OHE. Available at https://www.ohe.org/publications/cornerstones-%E2%80%9Cfair%E2%80%9D-drug-coverage-appropriate-cost-sharing-and-utilization-management
Pearson SD, Segel C, Cole A, Henshall C, and Towse A. 2019. Policy perspectives on alternative models for pharmaceutical rebates: a report from the Institute for Clinical and Economic Review Policy Summit. J. Comp. Eff. Res. 10.2217/cer-2019-0094 C
Cole, A., Towse, A., Segel C.S., Henshall, C., Pearson, S.D., 2019. Value, Access, and Incentives for Innovation: Policy Perspectives on Alternative Models for Pharmaceutical Rebates. OHE Research Paper, London: Office of Health Economics.
Towse, et al. A Market-based International Reference Price Index: Solution or Contradiction? (Sep 13, 2019). Available at: https://www.ohe.org/news/market-based-international-reference-price-index-solution-or-contradiction
Hampson, G., Towse, A., Dreitlein, B., Henshall, C. and Pearson, S., 2018. Real World Evidence for Coverage Decisions: Opportunities and Challenges. OHE Research Paper, London: Office of Health Economics. RePEc.
Pearson, S., Dreitlein, B., Towse, A., Hampson, G. and Henshall, C., 2018. Understanding the Context, Selecting the Standards: A Framework to Guide the Optimal Development and Use of Real-World Evidence for Coverage and Formulary Decisions. OHE Research Paper, London: Office of Health Economics. RePEc.
Hampson, G., Towse, A., Pearson, S.D., Dreitlein, B. and Henshall, C., 2017. Gene therapy: evidence, value and affordability in the US health care system. Journal of Comparative Effectiveness Research 7(1). DOI. RePEc.
Posted in Pricing and Reimbursement, Value-Based Pricing | Tagged External publications