Assessing the value of medicine for diverse patients: Implications of a QALY approach for health disparities

November 11, 2021

Momentum and debate about the application of cost-effectiveness analysis to determine the value and prices of prescription drugs in the United States are growing. At the same time, it is universally acknowledged that addressing health disparities is critical to advancing health equity and improving patients’ health outcomes. The US government has committed to addressing health disparities and there is broad agreement that each stakeholder in the health system has a role to play. Access to and the use of, medicines play critical parts in either exacerbating or reducing differences in health outcomes among communities in the US.

Given the potential role of value assessment as a mechanism to affect access to medicine or feed into price determination in the US, the Alliance for Aging Research (Alliance) asked Charles River Associates (CRA) to examine the implications for health disparities of adopting cost-effectiveness analysis (CEA), including Quality-Adjusted Life Years (QALYs). Specifically, CRA sought to explore the extent to which using value assessment methods in the determination of drug prices in the US could be achieved in parallel with advancing health equity among Black, Asian, Latinx, and Native American patients, with a focus on the older adults within those groups.

As part of our approach, we selected two case study disease areas with strong evidence of racial and socioeconomic differences in the US: Alzheimer’s disease and colorectal cancer. We then evaluated the extent to which health technology assessment (HTA) agencies in Australia, Canada and England factor in equity and the differences in patient experience across racial and ethnic groups through their cost-effectiveness analyses. These countries were selected because of their well-established HTA agencies and similar methodological approach to value assessment, which is comparable to the methods used by the Institute for Clinical and Economic Review (ICER) in the US.

Our findings suggest several policy solutions to better assess the value of medicine without undue reliance on cost-effectiveness analysis:

  • To support the assessment of new medicines in diverse patient populations, the NIH should develop nationally representative, integrated longitudinal datasets that can be used to examine the value of medicine to different racial and ethnic groups.
  • Any form of cost-effectiveness analysis should involve a systematic consideration of the impact of the new medicines by race and on health equity. Congressional legislation could mandate the development of methods to better consider how new medicines could provide patient value and address health access and outcomes disparities. Organizations creating and implementing cost effectiveness approaches in the US, whether government-backed or private, should commit to assessment approaches that balance the consideration of clinical value for diverse populations and the impact on reducing inequities. Organizations such as the Patient Centered Outcomes Research Institute (PCORI) and the Innovation and Value Initiative are already developing methodologies that move away from considering the average value of a medicine across diverse populations to factor in the impact of health disparities on specific population groups.
  • An alternative approach to traditional value assessment that incorporates health inequities is needed. Approaches growing in popularity include multi-criteria decision analysis (MCDA) and the distributional cost-effectiveness analysis (DCEA) method. Further development of these metrics should focus on incorporating the range of outcomes important to distinct patient populations and include a focus on addressing health equity.
  • To develop a more holistic and societal approach to value assessment, federal funding to develop diverse health economists in universities (e.g., through research grants) is needed. In addition, policy makers could establish standards and incentives to support the development and use of cross-functional research teams (social workers, economists, physicians) on state prescription drug affordability boards to conduct more nuanced assessments.

To read more about our findings and evaluations, please download a copy of our report.