It’s clear that we need to fix the way we measure the value of new medicines. Current methods fail to account for the benefits to caregivers, the long-term savings from keeping a job or avoiding the hospital, and the countless scientific discoveries...
It’s clear that we need to fix the way we measure the value of new medicines. Current methods fail to account for the benefits to caregivers, the long-term savings from keeping a job or avoiding the hospital, and the countless scientific discoveries that a new drug can lead to.
But there is a solution according to this week’s guest, biotech investor Peter Kolchinsky. He talks about his new study that looks at innovative ways to assess the real value of medicine. Peter explains how insurers use cost-effective math to determine what drugs they will and won’t cover, and alternative methods that take into account patient and caregiver needs.
Plus, Terry and Bob discuss some must-pass healthcare bills for the chronic disease community.
The successful patient is one who can get what they need when they need it. We all know insurance slows us down, so why not take matters into your own hands? Our Navigator is an online tool that allows you to search a massive network of health-related resources using your zip code so you get local results. Get proactive and become a more successful patient right now at the Patients Rising Helpline.
Have a question or comment about the show, or want to suggest a show topic or share your story as a patient correspondent?
Drop us a line: firstname.lastname@example.org
The views and opinions expressed herein are those of the guest(s)/ author(s) and do not reflect the official policy or position of Patients Rising, nor do the views and opinions stated on this show reflect the opinions of a guest’s current or previous employers.
Peter Kolchinsky 0:00
Do you see how much society spends on kids with cystic fibrosis and adults with cystic fibrosis who have exacerbations and they go to the ER and they get hospitalized? You look at that. And you think, Well, if we had a medicine that could prevent all that, surely that would be valuable. It would save society a ton of money over time. And so the market generally rewards medicines like that.
Terry Wilcox 0:25
This week on the patient's rising podcast biotech investor, Peter Kaczynski discusses his most recent study. This looks at new ways to assess the value of a medicine. We've said it before, we'll say it again, metrics that don't take into account the experience of patients as a whole, don't cut it. Today we'll learn about alternatives that take into account patient and caregiver needs. Plus how all of this impacts your access to new medicines. Welcome to the patient's rising podcast. I'm your host, Terry Wilcox, CEO of patients rising. I'm joined by my co host, who is ditching his black T shirt look for dirty shorts and a torn hoodie. It's he's Bob Goldberg, co founder of the Center for medicine in the public interest.
Bob Goldberg 1:13
Yeah, I mean, I was gonna just slap a patient's rising logo on my hoodie. So we could say it's closed caption. That closed caption. That's a horrible horrible. We have a must listen show because we are now discussing some must pass healthcare bills from our point of view, because they would help patients. And you wrote an OP ED Terry Congratulations.
Terry Wilcox 1:40
Well, thank you first, how do we fix the way we measure the value of innovation of a drug? And how does that play into the price of that drug for you? The patient. Peter Kaczynski joins us here again to discuss his recent report in partnership with Entity Risk, which was done because the current methods we use to determine the value and the price of a drug aren't working.
Peter Kolchinsky 2:03
We commissioned this study, no patient left behind commissioned this study with a group called Entity Risk, which was founded by some health economists, in particular Darius Lechter. Wally's well regarded health economist at USC, Schaeffer center, and Dana Goldman there. And they have long been teaching that conventional cost effectiveness analyses like the kind that are done by NICE and in the US, they've been popularized by ICER, that they are woefully inadequate. They're just very simple equations that ignore you know that drugs go generic, for example, and ignore that we're willing to pay more for things that address really serious things. You know, Darius explained to me once, you know, people don't value a gallon of water very much. Now think about how much that gallon of water is worth to you when you're dying of thirst in the desert.
Bob Goldberg 2:55
To recap for any new listeners, ICER stands for the Institute for Clinical and Economic Review. We've talked a lot about their reports, because they use a measure of value called the quality adjusted life year, often used by insurers to deny coverage. But as Peter said, their methods are often flawed, because they look at the price and the short term savings, as opposed to long term benefit.
Peter Kolchinsky 3:26
So when you actually pick at it, when you look at their math, you look at their equations, you realize, Wait, they only look at the price of these drugs. Now, you know, they only look at the value of treating that one patient like to the patient, they assign a certain value to the benefit that the patient gets, they ignore to the benefit to caregivers, they ignore that when you know, a child with cystic fibrosis stays in good health, the parents, you know, don't get ripped out of work, you know, as often as taken to the hospital, like they're more productive, the whole family's happier. You know, like, you're less worried about your child dying. I mean, there's just benefit all around.
Terry Wilcox 4:05
That's true. And I still doesn't look at any of it in a really meaningful way. They often will give lip service to it, or they'll hire a Director of Patient engagement or whatever. That's right. Yeah. But they really need to look at the whole picture of a medication, not just the immediate fulfillment of what the drug does, but the whole picture does it keep patients out of the hospital and save on hospital costs. So Peter actually explains how this cost effectiveness math works, how insurers use this every day to determine what drugs they will or won't cover. So take a listen.
Peter Kolchinsky 4:42
You actually have a lot of Payers out there that don't have to cover Trikafta they don't there's not a legal obligation for them to cover my Trikafta but they can just cover like one other cystic fibrosis drug somewhere that barely works and is less expensive, and they can meet whatever requirements you know there may be for them to cover something See if they cover try Trikafta because they know that if they don't, they will not be considered a legit health insurance plan, any health insurance plan that doesn't cover a drug that is that good. And that reasonably priced for the value it brings to society would be seen as a really bad unreliable insurance plan. So ultimately, if they have a million lives, and they have some patients with cystic fibrosis there, they know they're being watched by all their healthy members, you know, the ones who contribute revenue to the insurance plan and allow it to remain profitable. You know, they know they're being watched by all these people. And they can see like, well, I've got these kids whose lives are gonna be transformed by this drug. And it costs about $200,000 a year, frankly, not that out of line from a whole bunch of other drugs that are there, it will save a ton of money on, you know, all kinds of costs, and it will just completely revolutionize the lives of this whole family. Yeah, I think we should probably pay for this drug, or we will be hated by all of our healthy revenue contributing members. So that judgment call by a plan that's like, Yeah, let's cover it. That is the moment when, ultimately value is assessed in America, when you have hundreds of plans that have people that all are calibrated to that, you know, that is what the market is.
Terry Wilcox 6:23
That's true. And I've always said that, you know, the patient voice in this piece are exactly what they're talking about there are they are they healthy, covered lives. And so the more that you can interject this into the healthy, covered lives, through storytelling, or whatever the more impact, we will have away from things like QALY. So what needs to change? Well, the math on how we determine value for one,
Peter Kolchinsky 6:53
all of us who depend on investors, pouring money into r&d, you know, drawn to the promise of returns in order to make all of our lives better, you know, to improve the human condition, they should consider the bad math to be like an insidious virus that is talking us into undermining ourselves, we have to fight this, right. And one way to fight it, is by doing the good math, you know, better math, I should say, on our own products.
Terry Wilcox 7:26
Now, Bob, one of the models of what Peter says is better math is what's called the grace model, which Entitly Risk risk, the co author of the study here has invented. Now we've done a past episode on this, but can you recap it briefly for us again, and explain how this model really takes into account patient needs in a way that current models don't.
Bob Goldberg 7:47
So the grace model, which is the generalized risk adjusted cost effective model, adjusts for the degree of severity of the disease that someone's experiencing. It also takes into account the fact that a disease may have not had any new drugs for generations. So the fact that it's a new drug itself is worth something. So when it comes to the next steps, Peter says that we can use the grace model to help people understand that medical innovation is worth the price of development.
Peter Kolchinsky 8:26
I can't promise you that Congress in the public will believe you, you know, we have to fight this fight out there for the hearts and minds of the public and realistically will not be one with math. Like this is a small step towards making your case. I think that we have to all band together, and pool our creativity and some of our resources to try to over let's say, a 10 year period of time, win back the hearts and minds of America the value of innovation.
Terry Wilcox 8:56
But even that can be a challenge because investors are facing the same problem we do. We need healthy people to back us up.
Peter Kolchinsky 9:04
How do we show healthy people that they in fact get something for their money every time they pay those high insurance premiums? Because I think that healthy people have forgotten that they get something out of all this. All this talk of patients, patients patients. Well, if you're pretty healthy, you're thinking I'm not a patient. So that means none of this is for me.
Terry Wilcox 9:26
Well, you and I both know, Bob, everyone is a future patient, or the loved one of a patient. I can't tell you the countless number of stories, you know, an illness comes out of the blue and all of a sudden the loved ones in treatment for three or four years or an illness comes out of the blue and they're gone in three weeks.
Bob Goldberg 9:45
Yeah. And you forget, obviously, I know I do mean you sort of believe and hope that every day is going to be healthy and happy and you don't expect a diagnosis. The point of Insurance is to really prepare for that unexpected event. And to know that the resources, both the navigational and the care manager resources and the innovations are there for you.
Terry Wilcox 10:15
Well, that's right. And that's why we should all care about the innovation in medicine, even if we don't need it, you know, right now in this moment. So Bob, what is your biggest takeaway from this? I
Bob Goldberg 10:28
think it's, you know, we've mentioned again, we've done some really good shows on how to pay for drugs, how to value them, that we have to keep reminding people that the new medicines is the green technology for health, that if you want long term, better health overall, we need to continue invest today and continually for treating and avoiding diseases tomorrow. Medical Innovation is our greatest gift to ourselves. So if you're interested, you can learn more about the study and Peter's organization, No Patients Left Behind by going to the link in the show notes.
Terry Wilcox 11:17
This episode of the patient's rising podcast is brought to you by the patient's rising helpline, health insurance, caregiving, and pretty much every other topic in health care can be confusing and tough to understand. You have questions and the patients rising helpline has answers all for free, call or email us and one of our trusted Navigators will be there to help. Case after case has been handled by our navigators for patients and caregivers just like you, if you or someone you know has a healthcare question, challenge or an issue, we're standing by and ready to help to get in touch, leave us a voicemail, or send us an email using the link in the show notes.
Terry Wilcox 12:00
And before we go today, some important stories and the news this week we wanted to bring to your attention.
Bob Goldberg 12:07
That's right. Now, as I said at the top of the show, Terry, you have an op ed that was recently published in The Hill, could you please tell our audience what it was about?
Terry Wilcox 12:19
Well, it's about protecting Medicare patients rights to get care in the home, which is you and I both know is so important. It's just you know, you have a elderly father, my mother in law lives with me, I cannot even begin to tell you how important this is. And as especially for those of us who are part of the sandwich generation who have, you know, young children who just turned 10 Last weekend, Jackson and James, and also my 88 year old mother in law living in my home, nine out of 10 seniors and Medicare beneficiaries would prefer. And I can speak for my household on this to receive short term recovery or rehabilitation care at home, rather than a nursing center. And what this Op Ed was about is Medicare is proposing another round of cuts that will total more than 9% beginning in 2024. And we just don't want that to happen. These people are already not well paid is an industry that's difficult.
Bob Goldberg 13:23
Oh, you and I can both attest. And I mean anyone that has a parent that wants to keep them in home or loved one, finding people to do the hard work at the sometimes insulting levels of compensation is ridiculous. In addition, those 9% cuts will make it harder, not just to have people help out in the home. But the investment that companies need to make in virtual and remote patient monitoring is necessary. So I'm hoping that calmer, smarter minds such as yours will prevail, that everyone read your op ed and go once again. Terry is right. So yeah,
Terry Wilcox 14:07
Another story that is getting a lot of news is representative Jennifer Wexton of Virginia. She's my Congresswoman announced that she won't be going for a fourth term in the house after being diagnosed with PSP, which stands for progressive Supranuclear palsy. She initially thought she had just been diagnosed with Parkinson's and didn't plan on retiring. But this is basically for those of you who haven't heard of PSP and I had not until yesterday I did not. It was not familiar with it. She has called it Parkinson's on steroids. So it's a very fast it progresses quickly. PSP can inhibit walking, eye movement, speech and more according to the Mayo Clinic. And you know, this really hit close to home because it's very close to my age. She is only 55. She has two beautiful sons, a wonderful family. And she said in the statement that she's honing in on what's most important, which is her family, and she's going to spend all the time she has left with them. And I applaud her for that, and I wish her well. So lastly, patients rising now has released our must pass for patients list for Congress. There are five bills that deal with everything from out of pocket costs to discrimination against Americans with disabilities to banning the QALY. So we'll have a link to this list in the show notes and please contact your representative and senators to urge them to move forward on these important patient issues.
Bob Goldberg 15:41
We have more episodes in the way so make sure to follow the podcast on your favorite podcast app, so you can be notified when we return.
Terry Wilcox 15:49
Until then, for Bob and everyone at patients rising. I'm Terry Wilcox, stay healthy.