How to improve measures of “value”

Organizations such as the Institute for Clinical and Economic Review (ICER), Memorial Sloan Kettering and the American Society of Clinical Oncology all have begun producing value frameworks to determine if the value of new drugs are worth the cost.  An interesting Forbes Op-Ed by Anupam Jena and Tomas Philipson in Forbes examines whether these organizations are looking at value in the right way. 

Few would disagree that rewarding the full social value of a drug is a good idea, but the failure of current frameworks to accurately and transparently assess value poses a threat to the future pipeline of new drugs. Put simply, our current measures of value are not only too narrow but are shortsighted. Pricing and coverage decisions made on the basis of incomplete value frameworks run the risk of reducing future innovation by penalizing drugs that actually offer value to society.

The rest of the article presents eight examples demonstrating that the current frameworks are not adequately capturing the value of innovative treatments.  The economics-based discussion of value is certainly an interesting perspective for the recent debate around care value.

Disclosure: Dr. Jean and Dr. Philipson are my colleagues at Precision Health Economics.

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