March 31, 2026
Melanie Whittington:
Welcome to Perspectives, a signature podcast series from The Leerink Center for Pharmacoeconomics. Hosted by Dr. Mel Whittington, a health economist and Head of the Center for Pharmacoeconomics, we will be hearing from individuals across the industry to better understand and appreciate the societal impact of healthcare innovations.
Melanie Whittington: Okay, so today’s episode is going to be a little different. We didn’t bring on a guest, and that’s because I have a lot to say about this topic. Also, quick heads up, we now have video for the podcast. So, if you’re watching this, this is new for me.
I’m slightly uncomfortable, but we’re doing it. Okay, so here’s what I want to talk about today. There’s three things. First, there’s a clash between health economists happening right now in the world of cost effectiveness analysis.
So, get excited to get the scoop on that and why it’s relevant for this audience of investors and innovators. And second, I want to get into why cost effectiveness analysis is not a perfect science. And that may not come as a surprise to any of you, but I’m sure some of the things I point out about it will.
And lastly, and this is really important, especially for the biotech executives who listen to this show, I want to get into why the imperfections and cost effectiveness analysis should not stop you from using it to tell your value story. But before we get into all of that, let’s start with a very fair question. And that is, why should biotech investors and investors and innovators care about cost effectiveness analysis? And I hear this all the time when I’m talking with biotech execs and investors and, you know, they essentially say, Mel, come on, the US doesn’t use cost effectiveness analysis, and the US is the biggest market.
So why do I need to spend my time on this? And that’s totally fair. Point taken. But here’s where I’d like to push back on.
First, the US is clearly rethinking some things as to how it approaches drug pricing. We have the drug pricing provisions within the Inflation Reduction Act. We have most favored nation models. All of these are signals that the US is starting to question its market-based approach to drug pricing. And so, this is essentially questioning whether or not the market-based prices in the US are worth it.
So even if cost effectiveness analysis hasn’t been central to decision making historically, that doesn’t mean it won’t become more relevant or hasn’t already become more relevant over time. Number two, outside the US, cost effectiveness analysis is already deeply embedded. There was a recent Charles River Associates report that looked at the EU-27 and a handful of other high-income countries, and they found that 64% percent of those countries had either an explicit or implicit cost effectiveness threshold. So, what does this mean?
This means that other countries are using cost effectiveness analysis in some way to support their decision making. And even in the remaining countries that didn’t have an explicit or implicit threshold, that doesn’t necessarily mean that they aren’t using cost effectiveness analysis. It just might mean it’s less formalized.
And my third reason I want to push back on is, and this is kind of the bridge back to the United States, which is, you know, the most favorite nation for biopharma executives and investors due to its market-based approach to drug pricing. The third reason is that as international markets start influencing US prices more directly, which we’re already starting to see with international reference pricing, conversations and most favored nation type proposals, well, then the methods those countries use suddenly matter a lot more. So, with that, I hope I’ve convinced the innovators and investors to continue listening to this episode. So, let’s get into it.
I’ll start with something a little bit juicier. And that’s this clash between economists. So, the TL:DR is that there are a group of health economists, let’s call them the GCEA health economists, who argue that broader value elements should be included in economic evaluation. So, it’s essentially saying, hey, cost effectiveness analysis should think of things outside of the healthcare system. And then separately, there’s a separate group of health economists, let’s call them the HEMA health economists who they argue that these broader value elements, these elements outside of the health care system, should not be included in economic evaluation until strong normative justification and empirical foundations are established.
And so, at the center of all of this is really a deceptively simple question. And that is what is in and what is out of a cost effectiveness analysis. When you’re going to build or conduct a cost effectiveness analysis, where do you draw the line as to, okay, these are the costs and outcomes I’m going to include in my analysis. And these are the costs and outcomes I’m not going to include in my analysis.
Are you just looking at the healthcare system? So, your health system costs and health outcomes like survival and quality of life? Or are we taking a broader societal view? Are we thinking about patient productivity gains or time spent caregiving or risk aversion, criminal justice, education, everything else that’s happening outside the healthcare system as well? Now, this debate has been around for decades. This is not a new debate. It’s been around essentially for as long as cost effectiveness analysis has been around.
So, I’ll give you a little history lesson. Starting in 1996, thirty years ago, the US Panel on Cost Effectiveness in Health and Medicine was published. And it set guidelines for cost effectiveness analysis. And in that book, it recommended a societal perspective, which means consideration of those costs and outcomes to all parties, not just the healthcare sector.
So that was thirty years ago, in 1996. Now, despite those recommendations for a societal perspective, a healthcare system perspective continued to be far more common when implemented in cost effectiveness analyses. So the vast majority of published cost effectiveness analyses continued to use a health system perspective rather than a societal perspective. And even more so, the vast majority of governmental guidelines continued to use the healthcare sector perspective.
Okay, so now let’s fast forward to 2016, which is ten years ago now. These guidelines were updated. Now we have the Second Panel on Cost Effectiveness in Health and Medicine being published in 2016. And it introduced this concept of a dual set of analyses. So essentially a health system perspective in one set of analyses where you consider those direct medical costs and patient health benefits, and then separately, a societal perspective analysis where you start thinking about these costs and outcomes outside of the health system.
Importantly, the second panel also came up with this impact inventory, which essentially was a checklist designed to help cost effectiveness analysis practitioners kind of catalog and consider all of the potential health and non-health value elements. And so, these are things like health outcomes, direct medical costs, okay, all those things we conventionally included in cost effectiveness analysis, but it also listed things like patient productivity, criminal justice costs, education.
And so this is really a big addition to the literature and to the field, because it acknowledged that value is broader than what we’ve traditionally captured as health system costs and health benefits. But it also was a way to acknowledge that these things might matter even if they aren’t quantified in a cost effectiveness analysis. And it provided kind of this explicit checklist to be able to say, hey, what is in and what is out.
Then in 2018, so we’re getting a little bit closer to present time, ISPOR, which is my primary professional society, took it a step further with the ISPOR value flower. This formalized a whole set of novel value elements. So, these are things like insurance value severity of disease health equity. So, we continue to see this list expand. There’s been a lot of versions of the ISPOR value flower over time. You know, some include caregiver time, etc. So this has really been continuing to evolve up until around 2020.
And so up until around 2020, the field was very focused on one question. And that was what is in versus what is out of cost effectiveness analysis. What should we include? What should we leave out?
Now since then, since 2020, this question has shifted a bit. Now we started seeing questions of, well, how do we actually include these novel value elements? And there’s been a lot of really important methodological advancement in the field of health economics and economic modeling on, okay, how do we actually measure these novel value elements? We’ve heard about them in the Second Panel for Cost Effectiveness in Health and Medicine and seen them listed in the impact inventory.
We’ve seen them in the many iterations of the ISPOR value flower. Let’s stop talking about them and let’s actually figure out how to measure them. And so, there’s been a lot of methodological advancement on how to do that.
So in 2024, a group of 12 health economists, which I should disclose that I am one of those 12 so you all are aware of what side of the debate I’m on, but a group of 12 health economists, including myself, we convened and published a user guide on how to quantify these novel societal level value elements. And we referred to this overall framework as GCEA, which stands for Generalized Cost Effectiveness Analysis. Kind of alluding to the fact that there are more general ways that a healthcare technology could impact society and people, even beyond health costs and health benefits. So, the purpose of the GCEA User Guide was really to facilitate the estimation of these novel value elements.
So not only did this user guide talk about, well, what value elements could there be? It provided recommendations on how to actually quantify those value elements for incorporation within a cost effectiveness analysis. So, I thought that was pretty cool and novel. The GCEA health economists basically said, you know, we spent years identifying these broader elements of value. So now let’s actually measure them. Let’s incorporate patient productivity, caregiver effects, health equity, real option value, scientific spillovers, all of it. Let’s try to incorporate that into a structured framework.
And then most recently in March 2026, so last month, now we’re up to present day, another report came out, this one being the HEMA report. I was not an author of this report. HEMA represents a separate group of experts that were convened by three leading health technology assessment bodies.
So, Canada’s Drug Agency, the United States Institute for Clinical and Economic Review, or ICER, and England’s National Institute for Health and Care Excellence, or NICE. So, HEMA took a very different stance from the GCEA group and ultimately landed in a more restrictive place. It prioritized traditional elements like health gains and direct medical costs, those things that we typically see in conventional cost effectiveness analysis from the health system perspective and was much more cautious about bringing in broader value elements like those societal level factors of patient productivity, caregiver time, risk aversion. So that’s the clash.
Health economists have been at it for decades about this. And that’s kind of where I want to pause for a little bit and share my own perspective. I’ve already told you that I was one of the 12 authors of the GCEA report, and I was not an author of the HEMA report. So, you kind of obviously know what side of the debate I am on as it relates to this issue.
But to me, the issue isn’t GCEA versus HEMA or societal perspective versus health system perspective. When you look at GCEA and HEMA, neither of these has the answer as to what the price of a drug should be or what the value of the drug is. And they’re not supposed to. You know, we often hear the George Box quote of “all models are wrong, but some are useful”. It shows up everywhere.
It shows up in cost effectiveness analysis textbooks. It shows up in investing textbooks. It’s everywhere.
And it’s because it’s important. Neither the conventional methods nor the newer ones are advanced enough to be used as rules to set a price. My mentor, Dr. Jon Campbell, who’s now the chief science officer of the National Pharmaceutical Council, you know, he was my teacher all through grad school, member of my dissertation committee. He has said since day one of my training, these are tools, not rules.
Cost effectiveness analysis is a tool, an imperfect tool, but it still can be a tool to structure thinking, but not to replace judgment in a cost effectiveness analysis. As much as I love cost-effectiveness analysis and have dedicated my career to them, I know I’m not uncovering universal laws here. I’m making structured approximations of very complex, value laden decisions, and the goal should not be to decide which framework is right because they’re both wrong or at least inadequate in a silo.
What I learned from the GCEA versus HEMA debate is that both sides can make really compelling arguments, because value is subjective and the methods are nowhere near advanced enough to make final determinations. And so that is one thing I am particularly proud of from the GCEA report. We did state in the report that the range of possible answers that could, you know, come to be from either a CEA or GCEA, it should not be taken as a flaw with the approach, but more as a valuable warning not to assume that math can always substitute for the revealed preference of actual people. These methods are not meant to be conducted to pass a determination. So coming up with “the” answer from an economic model is not an attainable objective and should not be the goal, but rather putting the patient and the value to the patients and the value to the healthcare system and the value to society at the center of these conversations, however you want to define value, that should be the objective and that is attainable.
And so, before I move on, let me kind of just bring this back as to why this matters for this audience of investors and innovators, because this isn’t just an academic debate between health economists. It really isn’t. Many ex-US HTA bodies that determine access and pricing that use these methods maybe more so as a rule than a tool, many of which are now being pulled into MFN type frameworks. They’re actively engaging with this more conventional approach to cost effectiveness analysis from that healthcare system perspective. HTA-adjacent groups like the HEMA Group will obviously influence HTA more than the non-adjacent groups like the GCEA folks. So, if HTA groups are being guided toward narrower perspectives that may exclude these broader impacts, that directly affects how the value of your drug is assessed and how your innovation is rewarded. And so, here’s the key point. These methodological choices don’t just lead to slightly different answers. They can lead to very different answers in some situations. So, whether broader value is included or whether it’s left out is not a technical detail. It shapes how innovation, how your innovation may be rewarded. And, you know, there’s a lot of discussion about opportunity costs within health technology assessment and by the HEMA group and understandably so, right. Like opportunity costs are so important to consider, especially when you’re dealing with, you know, pooled health care dollars. However, the opportunity costs of reducing the incentives for innovation are not quantified in these analyses but is so core to the work we do. Okay, so that’s topic number one.
I want to pivot a little bit to topic number two. And that is cost effectiveness analysis is not a perfect science. And I know for a lot of people listening, especially the investors and the innovators, you know, this sounds obvious, but I think it’s worth unpacking why that’s true because the nuances do matter, especially if you’re the ones building or investing in the healthcare innovation that’s being evaluated.
And so, I think it’s very important that investors and innovators understand these nuances. So, let’s start with the most fundamental one and the one we’ve already touched on. And that is the perspective of a cost effectiveness analysis. This is really what a lot of the debate in cost effectiveness is about, and it’s exactly what differentiates the GCEA versus HEMA arguments.
When you run a cost effectiveness analysis, you have to choose a vantage point or a perspective, and that is essentially saying, okay, from whose perspective are you considering costs and outcomes to? Now, the most common approach, the conventional approach, is the health system perspective. That means focusing on health outcomes. So, survival, quality of life and then health system costs like direct medical costs or direct pharmacy costs.
The societal perspective expands that lens. It brings in non-healthcare costs and non-healthcare outcomes. So maybe this is patient productivity or caregiver time or, you know, any other non-health impacts. And so right away, you can kind of see the issue that a different perspective could result in a different cost effectiveness estimate, which could lead to a potentially different conclusion.
And so even before you get into the modeling details, you’ve already made a decision that fundamentally will influence the answer.
Another limitation of cost effectiveness analysis that usually gets a pretty strong reaction, especially from the investors, is that in conventional cost effectiveness analysis, models can run for decades. And we’ll talk about kind of how long they run in just a little bit, but they can run for decades. But the drug prices are held constant. So yes, you can have a decades long model, but with static drug pricing. And this is actually one of the reasons I wanted to join MEDACorp and engage more with the investment side of the ecosystem, because I just couldn’t reconcile that assumption that I kept making. Because if you ignore generic entry, you risk misrepresenting the long-term costs of adopting that new healthcare technology and you could ultimately misinform decisions. So that’s not good.
Now, to be fair, there are reasons people give for keeping drug prices static in these models that can last for decades. You know, there’s obviously uncertainty around the timing of generic entry. There could be price increases over the exclusivity period that may offset certain prices after the exclusivity period. Here’s the counterpoint. We model uncertainty everywhere else in an economic model. We model treatment switching. We model treatment stopping. We model long term outcomes 20 plus years out, we even model expected net prices accounting for expected rebates or discounts off of list prices. So why draw the line there? Why not also model expected generic prices after exclusivity? Patents do expire. You all are very aware of that. That part is not uncertain.
And the tools we use in cost effectiveness analysis are actually really, really well suited to handle uncertainty. We have things like probabilistic sensitivity analyses that can vary certain model inputs across a wide range to account for uncertainty and variability. So again, it’s not really about what’s possible, but it might be more about what we choose to include.
And this is where you start to see differences between conventional cost effectiveness analysis and approaches like GCEA. So conventional models tend to hold those prices static, whereas GCEA introduces dynamic pricing and this lifecycle thinking, this assumption that drug prices will very likely change over its expected time in the market. And so how can we use evidence and historical data to say, all right, maybe at 14 years we have generic entry. And then, you know, 2 years after that, the price has fallen 74%, something like that.
Again, I’m not saying GCEA gives you the right answer. And I’m actually pretty proud of us because in our report, I think we are pretty humble about that. But what it does highlight is different assumptions can result in different cost effectiveness findings, which can result in different conclusions.
Now I do want to kind of circle back to that time horizon piece because I said we would get back to this. But another big point of contention in cost effectiveness analysis is the time horizon of the model. So in theory, I remember learning this kind of day 1of my Pharmacoeconomic modeling class is your time horizon should extend as long as costs and outcomes differ between your new intervention, the intervention that you’re studying, and the comparator intervention, or like the current standard of care.
And so this sounds really straightforward, but in practice, most cost effectiveness analysis models are built around an average patient starting treatment at launch. And so, the economic model isn’t modeling the product’s time in the market. It’s modeling the patient’s lifetime. So, the time horizon depends on the baseline age if you’re taking a lifetime time horizon, which is pretty common.
So, you know, say you’re looking at a new treatment for multiple sclerosis, and the baseline age is 38 years. Well then, the model goes on for the patient lifetime. So, you know, 40-ish years. Conversely, if you’re looking at a treatment for Alzheimer’s disease and say the baseline age is 75 years, well then, the model goes on for the patient lifetime, which might be, you know, 5-ish years.
So, in conventional cost effectiveness analysis, that time horizon is going to vary based on the baseline age of the population, and the time horizon is specific to the patient, not the product. So GCEA tries to address this by shifting to a product lifetime time horizon rather than a patient lifetime time horizon. So, in GCEA, you can model multiple cohorts over time instead of just one. It’s kind of introducing a new cohort of patients that could start a treatment over each year that treatment is in the market. And then by kind of normalizing this time horizon across conditions, and then again, looking over the entire time the product might be in the market rather than looking at the average lifetime of a patient who starts the treatment at launch. So, I believe the GCEA, a kind of product lifetime time horizon and stacked cohorts is an improvement.
But again, it’s still not perfect. Results are going to still depend on, you know, assumptions about cohorts, populations and how those kind of things evolve over time. So, improvement, but again, not perfect.
Another issue that comes up with cost effectiveness analysis is modeling life extension. So many of these products that you all are working on or have worked on or have invested in, they have extended the life of, of people who needed them. And that’s remarkable. And that’s accounted for in cost effectiveness analyses. So that’s a great thing.
But most cost effectiveness analyses rely on the quality adjusted life year, which many people have probably heard about. It’s often referred to as the QALY. And there are some good things about the QALY. It is able to combine length and quality of life into a single metric.
So, you can kind of create this aggregate single outcome rather than having multiple different outcomes to think about. And it’s also useful because it’s able to standardize across diseases. Say you’re looking at a treatment in multiple sclerosis versus a treatment in Alzheimer’s. You can still have the same outcome that you can be comparing.
So, there’s some good things about the QALY, but it also has some very well known issues and some big limitations. And most of these happen due to life extension. So, for example, the same life extension could be valued differently depending on the quality of life for that condition, which raises real concerns. So, to put this in an example, say there’s a condition where treatment increases survival by a year, but the quality of life during that year is 0.6.
Well then, the QALY for that year is 0.6. Whereas if you had another condition that extended the same year of life but had a quality of life of 0.8, well then, the QALY is 0.8. And so, these kind of discrepancies in life extension are not good. And again, we’ve seen health economists rise to this issue and create alternatives.
We have the equal value life year, the health year in total, the GRASA-QALY. So, we have a variety of kind of these alternatives to the QALY that address some of these not good things in life extension. Now one of those I just mentioned, the GRASA-QALY. What’s compelling to me about the GRASA-QALY is that it tries to address not just these kind of potential discriminatory properties of the QALY in that life extension period, but it also tries to address some other limitations of the QALY related to patient risk preferences and risk aversion.
So GCEA recommends this kind of GRASA-QALY approach, whereas conventional cost effectiveness analysis sticks with the QALY. Um, so again, I think GCEA was a substantial improvement, but again, it’s not perfect. Even with these improvements in aggregate outcomes, there’s still some other weird things that happen in life extension. So, an area of great interest to me is called the zero-price conundrum.
And this is when a healthcare technology could be found to be not cost effective at any price. And so maybe we should dedicate a whole future podcast episode to that. But you know, GCEA hasn’t fully solved that issue yet.
And maybe the last thing I’ll talk about related to why CEA and GCEA are not perfect, precise sciences is related to more of a conceptual or application issue. So, cost effectiveness analysis is about long-term efficiency and long-term returns. Okay. If I invest in this new healthcare technology and when I say invest, I mean like payers, and insurers, and people are going to pay for this treatment. What is going to happen in return? How much more costs am I going to have? What health system cost offsets am I going to get? What is patient survival going to look like?
What is patient quality of life going to look like? What are patient productivity gains going to look like? Okay. So, CEA is largely about looking at long term efficiency, but in practice it often gets used to then imply what the price of the drug should be. And those aren’t the same thing. You know, we started with a tool designed to evaluate the efficient allocation of resources. And then we turned it into a way to determine how much the innovator should be rewarded. And so those aren’t necessarily the same things.
And this is my biggest learning from talking more with investors and innovators is that reward should really depend on things like scientific difficulty, population size, unmet need, the value provided to patients, the health system and caregivers, novelty. But ultimately, the reward is not just the price per person.
It’s really price times, volume, times margin, and cost effectiveness analysis by design is focused on a price per person. And so, this is kind of where you might start to see these real world disconnects.
And that in large population diseases like cardiovascular disease or obesity, you often see drugs priced per person below what a conventional cost effectiveness analysis might suggest is like the value based threshold price. But then on the flip side, in rare disease, you might see the opposite. Where the price per person may be well above these kind of value based threshold prices. And that’s because decision makers understand the economics of small populations, that even treatments for rare disease still have substantial clinical trial costs and other costs of development.
That there’s really these economics of small populations that this market based approach to drug pricing has been able to consider. So GCEA doesn’t fully solve this either, but it does still definitely emphasize that cost effectiveness analysis should not and cannot be the only input into pricing decisions. Okay, so this is what I want you all to take away from this. This is kind of my point.
Number three, cost effectiveness analysis I believe is incredibly useful. It’s not a perfect science. It’s not a precise science. It’s built on assumptions, on choices and on judgment.
And in many ways, it might be more of an art than a science, but in my opinion, that’s okay as long as it’s implemented as a tool. Which brings me to how I think innovators and investors should use it. Innovators should still use cost effectiveness analysis as a way to evaluate and tell their value story, not as a rule book, but as a way to understand the patient, the health system, and the societal impacts of your innovations, and then benchmark your price and kind of see how does this correspond to my price?
Use it as a way to defend your price. Use it as an evidence-based countermeasure to price scrutiny as a structured way to tell your value story. And so, this is where I would like the idea of perspective to come back, but in a different way. And this way, I’m not talking about health system versus societal perspective, but I’m talking about the buyer versus seller perspective. And I need to give another shout out here to Dr. Jon Campbell because he just has a commentary out last week introducing this buyer versus seller perspective.
And so, it’s a, it’s such a simple way, but powerful way to think about it. So essentially buyers, maybe these are payers, health insurers, HTA bodies. Buyers want a lower price. Of course they do.
So, if conventional cost effectiveness analysis, using a more narrow set of value elements can support that, they’re going to use it. And honestly, that makes sense as to why they should want to do that from their buyer perspective.
But innovators and investors, you represent the seller. It’s a different perspective. And sellers want a higher price. That also makes complete sense. And yet we very rarely see innovators actually using these methods with their own assumptions to defend or talk about their price. And so, what ends up happening is we have this buyer’s analysis that just kind of sits out there on its own and ends up having almost monopoly power over your value narrative.
And so, buyers are out there talking about value in very concrete, quantified terms, and often in a way that might portray your US market based price as too high or maybe not worth it. Now, sellers, if you start using cost effectiveness analysis from your perspective, I’m not saying you have to price your drug based on some threshold based price of an incremental cost per QALY gained. I hope that it’s clear from my commentary earlier that I don’t think that’s the appropriate way to set prices. But if you came to the negotiating table and said, you know, hey, you’re already paying five thousand dollars per exacerbation averted for this other drug, my drug prevents more exacerbations, so my drug can actually price at a premium to that other drug.
And you still only have to pay five thousand dollars per exacerbation averted. We’re maintaining the same cost per health outcome gained here, but we’re delivering more benefit. So, a premium in pricing is justified. Or maybe you take a different approach, and you say, okay, here’s the total lifetime monetary benefit of my drug.
When you account for increased survival, improved quality of life, patient productivity gains, less time spent caregiving, our annual price only represents 7% of that. Aren’t those powerful, defensible, evidence based arguments? Isn’t it a good thing to know and communicate the patient health system and societal impact of your treatments?
And I know, because I get this all the time, people might be thinking, well, HTA is the primary user of cost effectiveness analysis and they won’t accept benefits outside of the health system. Maybe. Maybe that’s true, but they’re definitely not going to accept it if you don’t put it forward in the first place. And also, it’s worth remembering that HTA is not the only audience, and they’re not even the ultimate buyer.
People are the ultimate buyers. And if people care about the things you consider in your model that the HTA models leave out, then it can still be worth it.
And so, bringing this back to the US, which again, is the most favorite nation for biopharmaceutical innovation due to its market-based pricing approach to drugs. We don’t have a centralized HTA body. We don’t use cost effectiveness analysis as rules. However, that doesn’t mean there isn’t price scrutiny. And there absolutely is.
And so, show us with evidence why your US price is worth it. Cost effectiveness analysis is not going to tell you the perfect, dynamically efficient price that provides the optimal reward to the innovator while balancing health system efficiencies. I would love if it could, but it can’t do that yet. But what it can do is give you a structured, evidence-based way to explain why your price is worth it.
And that’s incredibly valuable.
Okay, so I need to wrap this up. I’m getting up there on time, but I do want to end with one more thing, a bit of a bonus thought because I’ve been speaking very directly to innovators and investors, but I also want to say something to my fellow health economists who might be listening to the episode.
I get it. I am in economic models all day long, and it’s really easy to kind of get stuck in that modeled hypothetical world where we’re tracking simulated patients over many, many years. But we also have to stay grounded in the real world. And the real world has people needing and wanting new drugs and drug developers working to address those unmet needs. The real world has patents that expire, exclusivity periods that drive decision making. Generics and biosimilars entering the market and dropping prices. The real world where it’s not about, you know, abstract QALYs gained for an average patient. But we’re talking about real patient experiences, access to medicines, and real choices.
The real world where we’re not just looking at one individual drug that happens to make it to market, but rather we have investors and drug developers putting billions of dollars at risk to study lots of different potential therapies, most of which will never even make it to the market. So, I’ll end on this. I think you all probably get what my three points are. You know, cost effectiveness analysis is not a perfect science.
Even health economists can’t agree on what should go into it and what should stay out. But honestly, that’s part of its strength because value is subjective, and these models give you a way to express your perspective in a structured way. So, I encourage innovators and investors to explain the value of your drugs from your perspective, because if you don’t, someone else will and they’re going to tell it from their perspective. So, tell your own value story.
Thank you for listening to this episode of Perspectives. If you’re interested in participating in future podcasts or would like to learn more about the Leerink Center for Pharmacoeconomics, please email cpe@medacorp.com.
