Pharmacoeconomics can bridge the gap between the shareholder and the stakeholder

ISPOR Europe Special Edition

WELCOME HOME

ISPOR Europe 2024 was held in Barcelona from November 17^th to 20^th. More than 6,300 people attended the conference to discuss health economics and outcomes research. For those who made the trip, I hope you made it home safely and according to plan. Meeting collaborators in person and catching up with old and new colleagues is always refreshing. Sharing progress, debating ideas, and being challenged is always necessary.

More so than in prior years, I left the conference thinking the field has made a great deal of progress but also has an enormous responsibility to carry out a great deal of work ahead. We seem to be at a point where the limitations of conventional approaches are now widely acknowledged, methods to address many of them have been developed, and now we are accountable for figuring out how to appropriately implement them.

In this week’s newsletter, I will summarize the debates and themes I observed while at the conference and will opine on where I see the field going. 

FIGHT FIRE WITH FIRE

The worlds of healthcare investing and health economics are beginning to talk (finally). This is long overdue, and we need a lot more of it. Although the two worlds are both focused on valuing healthcare innovations, their timing (e.g., development versus launch) and approach to modeling (e.g., net present value versus cost-effectiveness analysis) are completely different. 

It’s honestly pretty baffling the worlds have historically been so separate, as each can have enormous influence on the other. 

Despite the limited presence of investors at the conference, there seemed to be a greater acknowledgement of the investment in innovation that came out in the presentations and Q&A sessions.

One of the best conversations I had was with an individual from industry who was talking about bridging the gap between the shareholder and the stakeholder. I keep thinking about this. For one, I think it was the first time in the ten years I have been going to ISPOR that I heard the word “shareholder” come up in the conversations I was in which shows you just how separate the two worlds are. And second, I saw parallels with what we hope to achieve at the Leerink Center for Pharmacoeconomics. 

Healthcare innovations have an enormous impact on stakeholders—patients, caregivers, really all of us. Healthcare innovation is special in that it can save lives, improve quality of life, and keep people productive and independent. We want to evaluate and communicate this impact. We want to celebrate this impact—which oddly feels taboo in this era of criticism around prescription drugs

EYE OF THE BEHOLDER

Gone are the days where we count how many times the ISPOR value flower was mentioned in slides. Not long ago, ISPOR presentations were peppered with the ISPOR value flower and what it was. People used to keep a tally on social media for how many times it was mentioned. Those days are gone. The ISPOR value flower needs no introduction. It has become a mainstay. 

These are the days where we implement the ISPOR value flower. Maybe it was because ISPOR Europe came on the heels of the publication of a user guide to best practices on how to implement it. Or maybe it was because we released our first CPE Exclusive that implemented the petals on November 12th. Or maybe it was the announcement on November 13^th from three health technology assessment groups that they are going to create a Health Economics Methods Advisory group to assess these new methods.

Whatever it was, we have finally moved from talking to testing—nearly seven years after the ISPOR value flower was published. 

I left the conference feeling grateful to live (and practice health economics) in a country that doesn’t set drug prices based on cost-effectiveness analysis because with this growing acceptance of a broader view of value and the limitations of conventional approaches comes unanswered questions on how to translate this into a price.

As I look ahead, the field will undoubtedly be consumed with questions around threshold(s) and manufacturer versus consumer surplus to come up with a dynamically efficient price to reward innovation. We will be lucky if that only takes seven years. These aren’t easy questions to answer and are even harder to implement. 

Meanwhile, the Leerink Center for Pharmacoeconomics will be implementing these methods, not to suggest a price, but to demonstrate the impact innovations have on society at market-based prices.

THE WAIT

Value assessment is reactive. I am not saying that is a bad thing or a good thing. I am stating it as an observation and something we should acknowledge and respond to accordingly. 

Health technology assessors are not going to be the early adopters of methods, nor are they going to be the developers of the methods.

At ISPOR Europe, I was honored to be part of a panel about using distributional cost-effectiveness analysis to quantify the impact of an innovation on health equity. My co-panelist from NICE, the health technology assessment in the United Kingdom, presented how in 2022, a manufacturer submitted a distributional cost-effectiveness analysis as part of their submission to NICE. Following that, NICE released its position statement on the use of distributional cost-effectiveness analysis in 2024. I am waiting to see the same thing for generalized cost-effectiveness analysis.

Innovators can (and should) start implementing these novel methods for their innovations. These methods don’t have to be implemented to suggest a price, and they don’t have to focus on new innovations.

Innovators could start with their “old” innovations. Maybe those that have already gone generic or have been in the market for a period of time. They can demonstrate the societal impact of that innovation and explain that because the market showed its willingness to pay for that innovation, signals were sent to investors and developers to support more research and development and more innovation.