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PhRMA’s Perspective on Value-Driven Healthcare

December 2016 Vol 9, Special Issue: Payers’ Perspectives In Oncology: AVBCC 2016 Highlights

Washington, DC—Payers are increasingly evaluating methods to manage oncology care costs in the new value-driven healthcare system. These methods include improved quality measurement and value-assessment tools, the appropriate use of drugs, and value-based contracts with health plans.

Michelle Drozd, Deputy Vice President, and Lauren Neves, Director, Policy and Research Department, Pharmaceutical Research and Manufacturers of America (PhRMA), Washington, DC, discussed PhRMA’s perspective on value-driven healthcare at the Sixth Annual Conference of the Association for Value-Based Cancer Care.

Quality measurement that uses data effectively underlies value-driven healthcare, said Ms Neves. “We’ve been developing and reporting on quality measures for 20 or so years now, and those measurement systems continue to evolve. Quality measurement is critical if you want to enable and inform patient choices and develop incentives that are really going to improve patient outcomes,” she said.

Payers and other stakeholders have a limited number of measures that are ready for use for payment or performance measurements; the majority of payers and other stakeholders assess process measures rather than health outcome measures.

“This brings us to patient-reported outcomes…, which are an area of opportunity we think in terms of quality measurement,” Ms Neves said.

Value-Assessment Frameworks

In addition to quality measures, tools to inform decision-making by all healthcare stakeholders are needed. “Value-assessment frameworks, which have become prominent over the last year, seek to fill this void, and, in turn, support the transition to value-based healthcare,” Ms Neves said.

The key emerging value frameworks are the American Society of Clinical Oncology’s Value Framework, Memorial Sloan Kettering Cancer Center’s DrugAbacus, the National Comprehensive Cancer Network’s Evidence Blocks, and the Institute for Clinical and Economic Review’s Value Assessment Framework, described in the Table.


Ms Neves encouraged value framework developers to incorporate real-­world evidence into their framework design, in addition to incorporating evidence from randomized clinical trials. Overall survival is not always the chief end point of treatment, she said, and framework developers should consider including additional factors, such as treatment-­free intervals, treatment duration, palliation of symptoms, and toxicity.

In the assessment of cost aspects, the current value frameworks evaluate the cost to the healthcare system or to the payer, but none includes the cost to the patient, which is “a pretty glaring omission,” said Ms Neves.

Although the reaction to value frameworks from the academic community, health economists, and health services researchers is “tepid” because of limitations in quantifying value, the majority of people in the field agree that it is a worthwhile pursuit, she said. “It’s not simple, and these frameworks are relatively nascent,” said Ms Neves.

Improving Value Frameworks

PhRMA believes that sound methods of value assessment can move the United States from a siloed healthcare system to a more holistic, value-driven healthcare system. However, there is a need to harness experience and the research skills of different stakeholders to advance the methods, the measurement, the design, and the application of these tools.

To provide a possible solution to these challenges, PhRMA released 15 board-approved value-assessment principles for a good value framework, including:

  • Describe a sound process
  • Support patient-centered care
  • Deliver reliable, relevant information
  • Continue value-based scientific and medical progress
  • Take a system-wide perspective.

Value frameworks must take into account patients and other stakeholders’ perspectives on value, including cost-effectiveness, clinical effectiveness, toxicity, improvement in adherence, labor productivity, and option value (ie, the value that is created when a drug’s development creates new possibilities for subsequent innovation).

In addition to the development of quality measurement and value assessment tools that advance a value-driven healthcare system, the appropriate use of monotherapy drugs or combination regimens in a specific patient population is another area of focus, said Ms Drozd.

“Compared with 2 years ago, twice as many patients are in health plans that incentivize their prescriber to choose one treatment over another,” she said. “In addition, 4 times as many hospitals are in accountable care organizations than only a few years ago,” Ms Drozd added.

Although the demand for pharmaceutical manufacturers to demonstrate the value of their drugs is increasing, manufacturers believe that the regulatory environment that governs their behavior was established before the move toward a value-based environment, said Ms Drozd. Consequently, she calls for a modernization of the regulatory system to address the changing healthcare environment.

For example, increased flexibility from the FDA would allow health plans to obtain early information from manufacturers about their pipeline drugs or better information regarding real-world and ongoing evidence about approved drugs.

“At the same time, other regulations could be updated to allow more value based contracting,” such as outcomes-based contracting, she concluded.

Last modified: August 30, 2021