Most Insurers Do Not Use Value Frameworks in Prescription Drug Coverage Decisions

Analysis finds health plans need to examine total treatment costs instead of just drug costs.

A majority of health plans still do not use publically available value frameworks in making decisions on prescription drug coverage, a report from Avalere found.

In mid-2015, value framework initiatives to help stakeholders assess the value of drugs was launched by the American Society of Clinical Oncology (ASCO), the Institute of Clinical and Economic Review (ICER), Memorial Sloan Kettering, and the National Comprehensive Care Network (NCCN).

“Having a transparent methodology and consideration of total treatment costs rather than just drug costs were the 2 most important features that health plans sought in a value framework,” said Sung Hee Choe, vice president at Avalere. “As these frameworks evolve, those will be important features to encourage broader use.”

The analysis was based on a survey of 11 health plans, which included 3 large national plans, along with small and mid-sized regional plans. Each of the plans sells products across all markets, such as commercial, Medicare, Medicaid, and health exchanges.

The survey was conducted in June and July 2016, and the respondents included pharmacy and medical directors.

The plans reported that they were aware of the 4 value frameworks launched in 2015, and believed that they helped to advance the conversation about the value of prescription drugs. Although all of the plans believed this, none of them actively used the value frameworks.

Since the plans indicated that the value frameworks are still in the early stages of development, they hope to see the provider community embrace the frameworks before they are formally implemented into their decision-making processes. Additionally, most of the payers reported that they do not believe it is likely they will use the frameworks to aid in coverage decisions a year from now.

“Integrating broader perspectives of value, especially the patient’s view, may help value frameworks garner greater acceptance,” said Josh Seidman, senior vice president of Avalere’s Center for Payment and Delivery Innovation. “While current frameworks lay the ground work for the continued push toward value, there’s still room for improvement.”