Understand how we got here — and how to move forward.

Our Take

Evolving value to account for disruptive clinical products

10 Minute Read

With the impending influx of disruptive products like cell and gene therapies, stakeholders must rethink how they assess medical value—and how that differs from the way we think of legacy products.

Innovative and disruptive products create new challenges not only for value assessment, but also for who will be responsible for achieving and monitoring outcomes. Additionally, how all stakeholders think about value is changing. Notably, the importance of representation and diversity in clinical trials has increased due to societal and cultural forces that go beyond the benefits of more representative data and the existence of health disparities.

Something that these new products won't change is the impossibility in aligning all stakeholders on a single definition of value, however, we have identified three key areas where change is both necessary and possible.


The conventional wisdom

Defining health care value is tricky, especially when there is no shared consensus of benefits and costs and the lack of a single 'decider' to arbitrate the often-conflicting interests of stakeholders. One that that is clear is that today's approaches to value must evolve as new and impending products challenge the existing paradigm.. Historically, health plans and prescribers relied on the limited set of randomized control trials(RCTs) used for FDA approval, along with a short-term cost over benefit calculation to determine whether a drug would provide value to a patient. Given the rising costs and substantial patient care implications of emerging, disruptive clinical products, relying on these metrics alone is no longer sufficient.

Moving forward, this will require life science organizations to forge a deeper understanding of how other stakeholders define benefits and costs and how that's evolving with new products.

Exacerbating this need for a different approach to value is the pipeline of innovative products coming to market. For example, million-dollar drugs are gaining market approval without the decades of data necessary to definitively prove the durability of their positive impact.

A few examples of the common points of contention in defining value as an outcome of treatment are:

The tradeoff between value for the patient and population – Given concerns over total cost of care, decisions that may be optimal for individual patients would not be optimal when taking a population level approach and weighing the relative costs and benefits of treatment.

Exemplar products: deep brain stimulation, ultra high-cost drugs.

Determining time horizons – The price tags and reimbursement approaches for newer therapies create additional hurdles around the time horizon in which value is delivered. Many novel products require longitudinal and other data that goes beyond what is required by regulators and/or have benefits that accrue over a timeframe beyond the typical commercial health plan focus.

Exemplar products: ultra high-cost drugs, digital therapeutics (DTx).

Increased lack of direct comparators – The rise of non-pharmaceutical interventions is making it harder for life science organizations, manufacturers, payers, and regulators to compare across potential treatments.

Exemplar products: digital therapeutics (DTx).

Identifying and quantifying avoided costs – As diagnostics become more precise, this creates challenges to demonstrate return on investment (ROI).

Exemplar products: pharmacogenomics and biomarker testing.


Our take

Because traditional treatment paradigms are being disrupted, life science stakeholders must take a more coordinated, expansive approach to data collection, evidence-generation, outcomes monitoring, and value assessment. Challenges such as high upfront costs of treatments, lack of comparators for first-in class and orphan drugs, reduced decision-making time due to FDA fast-tracking, and increased complexity of technologies and therapies signal that stakeholders need to take action.

To do so, they will need to ask new and different kinds of questions about data availability and integration. Additionally, they will need to think differently about study protocol designs to ensure recruitment of representative samples due to a potentially limited subject pool because of the nature of treatment .This will also require life science companies to consider how to collect real-world data, and find opportunities for support and profitability.

The role of life science organizations should be to find ways to partner with payers and HTAs in assessing value and finding common ground. Life science organizations should grapple with the following questions to start to establish a new paradigm and demonstrate value despite these challenges:

  • How are we going to define value for our products, and how can we structure our value assessment framework to address unmet needs of patients?
  • Which time horizons and endpoints best demonstrate value and impact? How does that vary by stakeholder?
  • How do we align internal incentives to maximize the impact of our collective efforts?
  • How can we take an ecosystem approach to thinking about evidence circulation and influence?

Three imperatives to improve your value assessment framework

Life science organizations are uniquely situated within the healthcare ecosystem due to their knowledge sharing and exchange of clinical insights across stakeholder groups and have an opportunity to improve processes across sectors to achieve medical value.

After speaking with leaders in this space, we’ve identified three imperatives for life science organizations to tailor and target their value assessment framework to account for disruptive clinical products:

  • Imperative

    Expand frameworks to account for broader member and population considerations

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  • Imperative

    Seek input from non-traditional perspectives and partner externally

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  • Imperative

    Monitor and track outcomes to align value endpoints to meaningful time horizons

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Parting thoughts

Moving forward, life science organizations must continue to push the ecosystem to iterate and evolve on approaches to defining and paying for value. This change will require persistence and acknowledgement that:

  • Many organizations have not shifted their mindset about what constitutes as value, and novel therapies only further exacerbate this issue. Life science leaders will have to consider how new innovations fit within the broader context of care delivery, and how multiple stakeholders working together can ensure that each patient has a holistic care journey. Life science organizations, payers and providers will need to work together to address tensions between population health needs and patient centricity, especially as more therapeutics and diagnostics become more personalized and precise.
  • Achieving medical value is hard, and multiple stakeholder incentives make accounting for it harder. Multiple stakeholder incentives make defining time to impact difficult, however, life science organizations should be aligning time horizons to endpoints that best demonstrate value when working with multiple payer groups. Life science organizations will need to re-define the scope of assessment in order to avoid value misalignment and suboptimal metrics and data measurement.
  • Lastly, meaningful progress will require candid dialogue between leaders in industry, health care delivery, academic medicine, and patient advocacy groups. The idea of a KOL is changing, and life science organizations should be taking a “ecosystem approach” to thinking about evidence circulation and influence. Abandoning the idea of identifying value in silos and working towards a shared understanding is the path forward.

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