Finding the Value of Pharmaceuticals

The federal government is among those interested in knowing what different drugs really are worth.

By Jeffrey Raymond
September 20, 2007

The University of Maryland School of Pharmacy (SOP) is playing a role in helping the industry – and government – determine the value of pharmaceuticals.

It’s an important consideration. Health care spending is rising faster than inflation. Spending on pharmaceuticals is rising faster than the rest of health care. And people are living longer, only to find themselves needing even more drugs as they age.

Now, in the Medicare Part D era, the federal government is on the verge of joining private insurers and state Medicaid agencies in assessing – based on patient data as well as price – the value of these drugs. The idea of these value assessments is to know not just how much drugs cost, but how much they help the people who take them. Then health professionals, patients, and insurers can know that they’re getting the best value.

The SOP’s Center on Drugs and Public Policy and its Department of Pharmaceutical Health Services Research held a Capitol Hill symposium on Sept. 24 to elicit ideas on the best ways to make these value decisions. At “The Value of Pharmaceuticals: Coverage and Evidence Considerations,” representatives of private insurance companies joined congressional staff members to discuss developments in the field.

“Since the passage of Medicare Part D, payers, providers, patients, and others have become even more sensitive” to the issues surrounding drugs, costs, and value assessments, wrote Francis Palumbo, PhD, JD, executive director of the center, and Daniel Mullins, PhD, department chair.

Panelists Helen Lee, PharmD, MBA, a clinical pharmacist at CareFirst BlueCross BlueShield in Baltimore, David Yoder, PharmD, MBA, divisional vice president of pharmacy for Elder Health in Baltimore, and Terence Shea, PharmD, director of pharmacy management for BlueCross BlueShield of Tennessee, mentioned that while they use dry data to make effective, efficient decisions regarding drugs, they also keep clinicians involved. “Make sound clinical decisions that make good business sense,” Yoder advised.

Shea also noted that there is not yet a lot of data from the Medicare Part D experience. Yoder and Lee, who are both graduates of the SOP, added that drug value assessments among elderly patients are made more difficult because of those patients’ tendency not to comply rigorously with their medication regimen.

Susan Lexer, senior legislative assistant to Rep. Tom Allen, D-Maine, and Josh Martin, legislative director to Rep. Michael Burgess, R-Texas, discussed proposals before Congress to address pharmaceutical value assessments. Despite their partisan differences, both said they expected to avoid a “one size fits all” piece of legislation. Lexer said the successful proposal would include room for patient groups and clinicians to be included in the value assessment process.

Pfizer supported the seminar.