Incorporating Clinical Value into
Coverage Design
Health Action 2016
Mitchell Stein
Policy and Communications Director
@mhstein
© ICER, 2016
Why Talk About Value?
One of the Merriam-Webster Dictionary
definitions: “relative worth, utility, or importance”
Value is not price and is more than cost
Let’s talk fighter jets
© ICER, 2016
The ICER Value Framework

The “problems” the value framework was intended to address

Poor reliability and consistency of value determinations by payers

Need for a more explicit and transparent way for health technology
assessment groups and payers to analyze and judge value


The goal


Tension between long-term and short-term perspectives
A common language and mental model of the components of value
across life science companies, payers, consumers/patients and other
stakeholders
A unique component of ICER’s approach

Public health technology assessment program “laboratories” for the
application of a value framework in deliberation and voting
© ICER, 2016
ICER Value Framework
Comparative
clinical
effectiveness
“Care Value”
Public discussion
and vote
HIGH
INTERMEDIATE
LOW
© ICER, 2016
Incremental
cost per
clinical
outcomes
achieved
Other
benefits or
disadvantages
Potential
short-term
health system
budget impact
Provisional
“Health
System Value”
Contextual
considerations
“Care Value”
Public discussion
and vote
HIGH
INTERMEDIATE
LOW
Public discussion
and vote
HIGH
INTERMEDIATE
LOW
Mechanisms
to maximize
health system
value
Achieved
“Health
System Value”
Public discussion;
included in final
ICER report
No ICER evaluation
No public vote
From Value Assessment to ICER
“Value-Based Price Benchmarks”

The ICER value-based price benchmark represents
the price at which patients in the population being
considered could be treated with reasonable longterm value at the individual patient level and with
overall short-term costs to the health care system
that would not be so large as to be likely to contribute
to faster growth in health care spending than growth
in the national economy.
© ICER, 2016
© ICER, 2016
Center for American Progress Report:
Enough Is Enough
The Time Has Come to Address Sky-High Drug Prices
© ICER, 2016
Other Value Assessment
Frameworks
The American College of Cardiology
ASCO value framework
Memorial-Sloan Kettering Abacus®
Premera
© ICER, 2016
Public deliberation and voting

Bring the public into the discussion of value

Provide policy guidance to payers and others
© ICER, 2016
© ICER, 2016
Advancing Value-Based Pricing
With Purchasers and Payers
Value reports: Explicit and transparent part
of coverage and price negotiation
PRICE MEETS BENCHMARK
• First tier
• Low or zero co-pay
• ‘Gold carded’ with provider groups
© ICER, 2016
PRICE EXCEEDS BENCHMARK
• Lower tier
• Higher prior authorization
requirements
• ‘Reference price’ to benchmark:
Additional cost paid by patients
or manufacturers
Four Steps To Value-Based
Prices

Make independent value reports an explicit,
transparent part of coverage and price
negotiation

Develop benefit designs that leverage value
price benchmarks

Advocate for state and federal policies that shift
manufacturer incentives toward value-based
pricing

Change the nature of the discussion
© ICER, 2016