Over the last decade, as the Institute for Clinical and Economic Review (ICER) has estimated the cost-effectiveness of newly approved drugs—and often declared them overpriced—companies in the industry have fired back with a litany of criticism.
Drugmakers have questioned ICER’s methodology and argued the organization downplays the benefits of new drugs. Now, offering a new perspective on the value of pharma innovations is the Center for Pharmacoeconomics (CPE).
Launched in October by Leerink Partners, CPE evaluates the long-term societal impact of healthcare innovations, aiming to go beyond typical cost-effectiveness models by assessing therapies not just for their health benefits but also for their financial implications.
“I have a ton of respect for ICER. I was a collaborator of ICER’s for nine years,” Melanie Whittington, Ph.D., who heads up the CPE, said in an interview with Fierce Pharma. “Our intent is more to take evidence and extrapolate it and synthesize it and use economic modeling more as a storytelling tool to say, ‘OK, what does this innovation actually do for patients? What does it do for caregivers? What does it do for the health system? What does it do for society?”
Describing itself as a “catalyst for change,” the CPE endeavors to “shape a future where societal outcomes are improved and the impacts of innovation are celebrated," according to its website.
The initiative comes as healthcare costs are under scrutiny in the U.S., with companies countering that the high prices of drugs are essential to help fund their innovation.
One way that conventional cost-effectiveness analyses come up short—according to the CPE—is that they often assume drug pricing stays constant over time. This ignores the reality of generic and biosimilar competition, which most important drugs eventually face.
The CPE has already released reports on four recently approved, high-interest drugs—Bristol Myers Squibb’s schizophrenia pill Cobenfy, Ascendis Pharma’s hypoparathyroidism drug Yorvipath, BridgeBio’s cardiomyopathy therapy Attruby and Regeneron and Sanofi’s Dupixent, which gained a key approval last year to treat chronic obstructive pulmonary disorder (COPD) patients with an eosinophilic phenotype.
With Dupixent for example, the CPE assessed it as an add-on to standard triple therapy compared to triple therapy alone on 24 value measures as opposed to four commonly used in conventional cost-effectiveness evaluations—longevity, quality of life, adverse events and non-intervention health costs.
CPE didn’t come up with the 24 value domains on its own. They have been recommended over time by academic health economists through the Second Panel on Cost-Effectiveness in Health and Medicine and an International Society for Pharmacoeconomics and Outcomes Research Special Task Force Report.
Several of the value domains address how much more productive COPD patients can expect to become over their lifetimes by adding Dupixent. The estimates include 400 more hours of occupational labor, 858 hours of household production and 203 hours of volunteer work.
With the expected extension of a patient’s life on Dupixent, while the CPE estimates their average consumption will increase by $22,000, this will be more than offset by productivity gains, the analysts said.
As for caregivers, it is estimated that Dupixent use will allow patients to need 40 fewer hours of care—even though their lives are extended.
The CPE also estimates that Dupixent use will reduce the costs of an average patient’s treatment from the health system by nearly 60%.
Coming up with very specific figures on the value measures is a function of economic modeling, Whittington explained.
“It’s essentially a gigantic spreadsheet where you’re putting all these inputs together and then you’re tracking a hypothetical cohort of patients over time,” she said. “We track them over time in a world without Dupixent for COPD and in a world with Dupixent for COPD.”
As CPE notes in its Dupixent report, incorporating potential biosimilar competition—as well as patient productivity, caregiver time and other financial factors—dramatically improves the case for the COPD therapy.
Meanwhile, ICER is also trying to perfect its cost-effectiveness methodologies. The U.S. organization just joined hands with England’s National Institute for Health and Care Excellence (NICE) and Canada’s Drug Agency to form the Health Economics Methods Advisory (HEMA), a working group that is examining global health economics and health technology assessment methods.