Topics Held the Pharmaceutical Manufacturers Association of Japan (PMAJ) Media Forum. The theme was "Reconsidering the Diverse Values of Pharmaceuticals: What Contributions to Society are Expected from Pharmaceuticals?

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On March 23, 2021, the Pharmaceutical Manufacturers Association of Japan (PMAJ) Media Forum was held at the Nihonbashi Life Science Hub (Chuo-ku, Tokyo). Under the theme of "Reconsidering the Various Values of Pharmaceuticals: What Contributions to Society are Expected from Pharmaceuticals," lectures were given by Dr. Isao Kamae, Specially Appointed Professor at the University of Tokyo School of Public Policy, and Dr. Naka Igarashi, Associate Professor at Yokohama City University School of Medicine, Health and Social Medicine Unit. On the day of the forum, 42 journalists attended at the venue and via webcast (22 attended at the venue and 20 watched the webcast). The background of the forum and outline of the lecture are as follows.

Scene of the forum

Background of the Forum

In Japan, the number of "supporters" of the social security system continues to decline due to the decrease in the working-age population resulting from the falling birthrate and aging population. In order to sustain the social security system under such circumstances, it is necessary to increase the number of "supporters" and maintain a balance between benefits and burdens, and pharmaceuticals are expected to contribute to this by extending healthy life expectancy.

On the other hand, the evaluation of pharmaceuticals is based on medical perspectives such as novelty, efficacy/safety, improvement of treatment methods, and convenience, and the evaluation from the perspective of sustainability of social security, which is an extension of medical perspectives to increase "supporters" through improvement of productivity loss of patients themselves and rehabilitation of patients' families by reducing their burden, is insufficient. We believe that the current situation is insufficiently evaluated from the perspective of the sustainability of social security.

Under the circumstance that innovative drugs are expected to appear in the future as a result of progress in science and technology, a system is required to appropriately evaluate the various values of pharmaceuticals in Japan's medical insurance system. In order to realize this, it is necessary to foster discussions with relevant stakeholders, and as part of this effort, we have decided to hold a forum under the theme of "Reconsidering the Diverse Values of Pharmaceuticals".

Evaluation of Value and Paradigm Shift in Health Care

Today, I would like to talk about the contents that will trigger discussion on value or value assessment. I would also like to discuss common misconceptions and lack of awareness, as well as future challenges, while taking a look at the state of value assessment in other countries.

The reason why the issue of value has come to be discussed is related to the paradigm shift in medicine. Since the time of Hippocrates in ancient Greece, until about the middle of the 20th century, medical care was based on experience; in the 1990s, scientific evidence became important, and in the 21st century, medical care based not only on scientific evidence but also on broader societal values came to be considered important. In the 21st century, it came to be considered important to base medical care not only on scientific evidence but also on broader societal values. Against this backdrop, research on the cost-effectiveness of medical technology or clinical research based on cost-effectiveness came to be conducted. In recent years, with the advent of expensive pharmaceuticals, this has become a financial issue in order to maintain universal health insurance, and the question of "what is the price of life" has become a topic of debate.

To begin with, "value" is a vague term, but value is not determined by a single factor, but rather by multiple dimensions. Economists also view value as willingness to pay or opportunity cost (the economic value of the next best thing you give up to get the best thing). Value is not a permanent constant and may change over time, even if the value of a particular thing is known.

What is Pharmacoeconomic Value?

There are three focal points for the value of a medical technology: first, some cost savings; second, an increase in survival; and third, an improvement in the patient's "quality of life" (QOL). Combining the second and third of these factors, namely survival and QOL, a new evaluation method called "Quality-Adjusted Life Year" (QALY) was introduced mainly by the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom. In considering the cost-effectiveness of medical technology, the incremental cost-effectiveness ratio (ICER) was devised to balance QALY and cost, and it is now internationally recommended that medical technology be evaluated using ICER. Japan was the first country in the world to use the ICER. Japan was the first country in the world to introduce a system for adjusting the prices of drugs and medical devices using ICER, and since ICER is considered to be an indicator of value, ICER-based pricing can be said to be value-based pricing.

12 elements of value

Researchers from the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) led a report called US Value Assessment Frameworks, focusing primarily on the United States, published in 2018. It includes the concept of 12 value factors. The review article published in Regulatory Science includes a Japanese translation of the 12 value factors ( Figure 1 ).

Figure 1: 12 Elements for Value Evaluation
Source: Isao Kamae. Pharmaceutical and Medical Device Regulatory Science, PMDRS, 50(3), 135-141, 2019

Two of the 12 value elements are accounted for by the QALY increase or net cost to calculate ICER as mentioned earlier (green circles). These 12 value factors are not independent of each other, but are related to each other. The concept is prescient because it also includes the value of fear of contagion (red circle), although these 12 value factors were not published until before the recent pandemic of the new coronavirus. The question is how to integrate and evaluate these various values.

What are misconceptions and lack of awareness about value assessment?

Here, I would like to discuss some common misunderstandings and lack of awareness regarding value evaluation. First, let's talk about the "object of value evaluation. In Japan's cost-effectiveness evaluation system, the targets of evaluation are limited to pharmaceuticals and medical devices, but in macro medical technology evaluation, medical systems, medical systems, and even medical policies are also included in the scope of evaluation. Next, I would like to discuss the relationship between value and price. Price adjustment based on ICER in the Japanese system is only a convenient relationship between ICER and price, which is completely different from the theoretical relationship between ICER and price. Despite this, the Japanese system primarily uses only ICER to adjust prices. In economics, it is generally known that the appropriate price is determined by the balance between consumer surplus and producer surplus, to the extent that it does not exceed the willingness-to-pay amount. In addition, the World Health Organization has stated its opposition to value-based prices as they tend to be high and create excessive producer surplus. Finally, there is the "academic principal". Measuring the diverse values of individuals does not necessarily lead to the best policy choices. This is because even if we quantify various values, we cannot find a social welfare function that aggregates individual values. In addition, other countries have various concerns about QALYs as the primary measure of value. Furthermore, the way in which the valuation of value is achieved depends on the principles and values of each country.

What constitutes procedural justice and the six items recommended by ISPOR's "Value Evaluation" report and the current situation in Japan

Health technology assessment is not merely empirical analysis (analysis and presentation of data), but is a science in the broadest sense, with a mix of normative analysis, and requires procedural justice ( Figure 2 ). The five requirements that constitute procedural justice are: participation of all parties concerned, transparency of deliberations and rules, voice of all parties concerned, thorough discussion of the basics and standards of distribution, and consensus building through deliberations. In Japan, the Central Social Insurance Medical Council (Chuikyo) has cleared the requirements of transparency of deliberations and rules, and consensus building through deliberations, but there is currently no discussion on the basics and criteria for distribution.

Figure 2: Components of procedural justice and the current situation in Japan

ISPOR has also published six recommendations for assessing value ( Figure 3 ). Japan has not yet implemented the sixth item, in particular, "Develop and test new elements of benefits to create a superior value scale that reflects the perspectives of both insurers and patients.

Japan was the first country in the world to introduce price adjustment based on ICER, but the theoretical justification is insufficient. In addition, there remain many issues that need to be further recognized in valuing. I believe that future value assessment in Japan needs to be addressed in the context of protecting the asset of medical care.

Figure 3 Six items recommended by ISPOR's "Value Assessment" report

Today, I would like to introduce the results of a web-based survey conducted in collaboration with the Pharmaceutical and Industrial Policy Research Institute and the state of value.

What ordinary consumers think about the value of medicines and how they should receive medical examinations, etc.

In November 2020, we conducted a web-based survey of men and women aged 20-69 (2155 respondents) (results will be published in the March 2021 Policy Research Institute News. No.62, p.15 - p.20). The survey included the factors that the general public values in addition to the efficacy, safety, and treatment cost of drugs, as well as the future trend of visits to the Corona Disaster Center. First, regarding changes in the frequency of hospital visits, 31% of all respondents answered that they have "reduced or stopped" their visits. Furthermore, more than 20% of all respondents answered that they were still reducing or had discontinued their visits. In terms of future trends regarding online medical care, fewer than 10% of all respondents had received online medical care during the survey period. However, more than half of all respondents hoped to use online medical care in the future.

What is Health Economics?

Health economics is based on the idea that medical resources are limited and must be allocated appropriately, i.e., used efficiently. However, until now, the explanation of "why are they finite?" has been limited to the discussion of money, such as the financial resources for medical care. Therefore, by raising co-payments, taxes, and insurance premiums, and by allocating budgets to other areas, it has been treated as if it were practically unlimited. The Corona Disaster made it clear that physical medical resources such as human and material resources are limited, and this led to the development of a discussion on the optimal allocation of resources and why it is necessary to consider resource allocation.

What is HTA?

The original definition of Health Technology Assessment (HTA) is very broad, but in a narrow sense, it means "to achieve efficient medical care by making decisions on benefits and setting prices for drugs and medical devices based on cost-effectiveness assessment" ( Figure 4 ). However, it was once misunderstood that "cost-effectiveness = value. The question is how to measure the value of a healthcare policy, price, or insurance system that is commensurate with value. The original idea was that cost/QALY could be measured to a certain degree, but this has somehow changed to the point where it seems as if cost/QALY is the value. Recently, however, there has been a swing back overseas, and it is now being said that there are other elements of value besides cost/QALY. In textbook terms, the cost and effectiveness of a new drug and an existing drug are calculated, the effectiveness is converted into QALYs, the difference in cost is divided by the difference in QALYs to produce "ICER per QALY," and the final judgment of cost-effectiveness is made according to the size of the ICER produced when compared to a predetermined reference value or threshold value. However, few countries actually follow this textbook approach, and it is recognized that various factors other than ICER must be taken into account, and that there are many factors that cannot be captured by cost/QALY.

Fig. 4 HTA (Health Technology Assessment, Health Technology Assessment)

The value of not going to the hospital and the value of minimizing the burden on healthcare providers

From a health economics perspective, reducing the number of hospital visits reduces medical costs, but this is actually different from whether it is perceived as a positive thing by people in the world, the majority of whom would prefer to go to the hospital if they could. While it is true that reducing medical costs is a good thing, I believe that people in the world did not recognize it as a value. Today, however, "not having to go" to the hospital has become a clear benefit. Those who are not troubled by online medical care and self-medication may be able to leave medical resources for those who are truly in need by not going to the hospital.

Here are the results of the survey we presented at the beginning of this report ( Figure 5 ). We surveyed what items are important as new values of pharmaceuticals. What I am focusing on is that the top item in the survey results is "the ability to reduce the burden on the medical profession. I believe it is very important that after the Corona disaster, the value of minimizing the burden on the healthcare provider is recognized as valuable in itself.

Figure 5 Items considered important for the value of a new drug, in addition to the efficacy and safety of the drug and the cost of treatment

The future of "value

When HTA and cost-effectiveness are introduced, there is an illusion that what was previously vague can be evaluated on a single axis. Originally, however, efficacy and safety were uncertain, and clinical trials are conducted to verify the balance between additional efficacy and additional toxicity. And cost-effectiveness is to look at the balance between clinical usefulness, which is the axis of "efficacy plus toxicity," and money. When there is uncertainty about efficacy and toxicity, i.e., efficacy and safety, it is naturally impossible to determine a unique cost-effectiveness figure. When efficacy and safety are ambiguous, the balance cannot be uniquely determined by cost-effectiveness alone. That is why cost-effectiveness is a good tool, but we need to take a hard look at what it cannot measure. In addition, I think that rather than just asserting that there are various values, a steady effort to extract the various values will be required to clarify the value of the high-cost drugs that will appear in the future.

Discussion

After the presentations by Mr. Kamae and Mr. Igarashi, a discussion was held with Mr. Kazuhiko Mori, Executive Director of the Pharmaceutical Manufacturers Association of Japan (PMAJ), as a facilitator, as follows.

Regarding the point "price based on value is not always a fair price," does this mean that ICER-based pricing is only a convenient relationship between ICER and price, which is not sufficient?

You introduced "the value of not going to a medical facility" as an example of a value that has not been evaluated so far; how do you think this can be reflected in prices?

Even if the value cannot be quantified, it seems to me that it is important to have a process that makes it clear to everyone that the decision was made after a thorough discussion. This seems to have something in common with the "procedural justice" that Mr. Kamae presented in his lecture.

Discussion

After the Forum

Through this forum, we were able to recognize once again that pharmaceuticals have diverse values. We believe that it is important to continue discussions with various stakeholders in order to consider a system to appropriately evaluate these values in Japan's medical insurance system. The Pharmaceutical Manufacturers Association of Japan (PMAJ) will continue to hold such meetings in FY2021 to deepen discussions on the various values of pharmaceutical products and to consider the ideal form of value evaluation.

( Akira YUASA, Koji IIDA, Ichiro TAMAOMI, Industrial Promotion Subcommittee, Industrial Policy Committee)

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