Pharmacy Benefits Uncut

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​The concept is simple: as a plan sponsor you should prioritize access to drugs for plan members that improve their health to the greatest degree over existing treatments, and limit access to drugs that don’t improve their health or improve it to a lesser degree.

A simple concept, but not easy to execute. Objectively determining how much health improvement is afforded by an individual drug is complicated at best and can be close to impossible at worst.

To pull off this kind of a strategy you need a basic understanding of the science of Comparative Effectiveness.

Let’s dive in.

Comparative effectiveness involves evaluating multiple treatments for a condition to determine which one provides the most health improvement. This contrasts with effectiveness which involves simply determining whether a treatment improves health.

Basically, we want don’t just want to know whether a drug works; we want to know whether it works any better than an existing drug we use to treat a given disease. For example, lots of drugs are used to treat diabetes. When a new drug to treat this disease becomes available, we’re only interested in using it if it provides health benefits over and above the drugs we’re currently using.

So, how do we evaluate comparative effectiveness?

Let begin by going back to basics. At the end of the day there are only two reasons why we use drugs:

1) To improve an individual’s survival (i.e. extend their life)

2) To improve an individual’s quality of life (i.e. enhance their functioning)

So, as an employer evaluating whether to list a new drug on your formulary you need to ask this question: Does this drug improve survival or quality of life for my plan members in comparison to the drugs they already have access to for the treatment of this particular condition?

Okay, how do we go about answering this question?

This is where it gets a bit complicated. When the FDA approves a new drug, it doesn’t evaluate its comparative effectiveness. It simply evaluates whether its potential benefits outweigh its harms. This means that many of the drugs the FDA approves are no more effective than currently available therapies, so you can’t rely on the FDA’s decisions to make your judgements about a drug’s value.

Aside: If you’re interested in a detailed discussion about the FDA’s approval processes, check out last week’s newsletter here.

This puts the onus on you as the employer to evaluate a drug’s comparative effectiveness. Many of the studies used to evaluate a drug’s health benefits don’t measure survival or quality of life, the important clinical endpoints we’re interested in. Rather they measure surrogate endpoints which are physical measures or biomarkers (e.g. blood pressure reduction, tumour shrinkage, changes in plasma marker levels) that may or may not be accurate predictors of improved survival or quality of life. Surrogate outcomes need to be interpreted cautiously and should only be used if they've indeed been shown to accurately predict changes in survival or quality of life.

Let’s look at a practical example of a new lung cancer drug that your PBM is considering adding to your formulary.

This drug was approved based on two studies that both showed it shrinks the tumour by 20-30%, but this benefit did not translate into an improvement in overall survival in either of the studies. Quality of life was also not improved, and in fact, study participants who received the drug reported a lower quality of life than those who did not receive the drug owing to its side effects.

The answer to the question “Does this drug improve survival or quality of life for my plan members in comparison to the drugs they already have access to for treating lung cancer?” is clearly no.

But as an employer how do you navigate your decision about this drug?

There are two basic options.

Option 1 would be to simply include the drug on the formulary, providing plan members who meet the relevant clinical criteria with access to it.

Option 2 would be to exclude it from the formulary since it hasn’t demonstrated any survival or quality of life benefits. You could then implement a process to monitor any new evidence that might emerge to demonstrate its benefits compared to existing treatment alternatives, in which case your formulary listing decision might change.

While many employers and their PBMs would choose Option 1, more and more employers and their vendors are moving towards Option 2. Employers are starting to understand why it’s important to use evidence to optimize their pharmacy benefits. They’re realizing that the best way to improve their plan members’ health and ensure their drug plans are financially sustainable over the long-term is to independently assess the evidence of a drug’s comparative effectiveness. And that assessment needs to begin with the question “Does this drug improve survival or quality of life for my plan members in comparison to the drugs they already have access to for the treatment of this particular condition?”

That’s all for this week.

See you in two weeks,

Nina

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