Value of New Pills

Traditional economic models of assessing value in healthcare may soon become invalid.

In an ideal world, everyone should be able to get the medicines they require to remain in good health. But in reality with increasing economic constraints this is far from a reality.

So who should decide what the value of a new therapy is, and what is value anyway?

There is an insatiable desire for more new and better drugs. Novel medications are being developed by pharma on the premise that the more medications that are available the more will be sold at a profit.

The increasing demand with the aging demographic in most societies will satisfy that end. But unfortunately increasing demand is now mirrored by less capacity to pay.

So ways of assessing the value of new medicines will have to change.

Currently economic models to value new medications are commonplace. Complex measures such as QALYS (quality of life adjusted years) and DALYS (disability adjusted life years) that are used to measure healthcare quality are too generalised and one dimensional. Both these take into consideration quality of life as well as survival when assessing value of a treatment.

On the QALYS scale from 0 to 1 a 0 means you are dead and a 1 means you are in perfect health with various gradations in between.

The purely economic methods of assessing value do not take into consideration that value and quality is so variable between individual societies and within groups of individuals with in a society. It is in essence a matter of taste and as well as economics it is about ethics and morality.

The concept of value varies geographically. It differs between different racial groups in a multi-ethnic society. In many societies, religion is the basis on which value judgments are made and there is considerable diversity in the strength of religious belief even within countries.

Value is also influenced by desire and wants. There is much inter-individual variation in terms of their personal aspirations.

The heterogeneity of these concepts of value makes it impossible to have a universal global value assessment of a new drug.

The Von Neumann axiom that people behave in essentially a rational manner has recently been discounted. Von Neumann is based on utility theory and the standard gamble, which are universally used as health care value assessments.

QALYS and DALYS use the gamble, the rating scale and the time trade-off, and are all based on the premise that the choices being made by humans are entirely rational.

Value based on this assumption of rational choice has been shown to be flawed because recent research has shown that humans do not act rationally.

Value assessment also depends on the amount you can pay. Countries in the Western World have much higher total health spend than the smaller budgets of the developing world. So there is considerable variation in affordability and ability to pay for new treatments.

In the next 50 years there will be dramatic demographic changes on the earth. Only 12% of the world’s population will live in developed countries and most people will live in middle or low income countries.

For example, in the future, the greatest cancer burden will fall disproportionately on low and middle income countries.

The value of a new drugs will not only vary from nation to nation, but also between genders and with age. Overall women are perceived more valuable than men. But in terms of heart disease the reverse is true in terms of new drugs.

In men, novel therapies at any age group directed at heart disease have a greater economic value than cancer, but very low economic value in stroke, flu or HIV AIDS.

For women it is a different picture and cancer is a much more valuable target up until about middle age when women’s protection for CVD is lost, and the differential disease burden changes radically when suddenly the heart becomes a much more attractive novel therapy target.

Making health economics decisions about value is thus very complex. Added to this is the fact that value of a drug can be independent of the burden of a disease. For example, HIV is only 1% prevalence in the US, whereas in Botswana it is as high as 30-40%.

New drugs may not have a significant impact if there are other powerful external influences on health in a specific society. New drugs can only have a very minor societal value. If there is a high mortality, for example, in the under 5s in a developing country, it may be down to war, famine and pestilence and the availability of a new drug may have a minimal impact on survival.

The value of new medicines also depends on the perception we have about the power of drugs to heal. The degree to which individuals believe this is highly variable.

As humans we do seem to have a hard wired emotional response to the value of a medicine and this is rarely factored into value assessment.

Economic factors are likely to remain at the heart of evaluation of new drugs. A more holistic approach to value assessment is more favourable taking into consideration things such as equality of distribution, the intrinsic value of the medicine and the severity of the disease being treated.

New and existing drugs need to be evaluated within the whole care system and not just economically but more from a multidimensional perspective. This will serve patients better in the future and continue to do so.

Conor Caffrey is a science and medical writer.


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