WASHINGTON, July 24, 2020 – Alliance for Aging Research President and CEO Susan Peschin, MHS, issued the following statement:
Today the President signed an Executive Order (EO) to lower drug prices in federal programs. While the Alliance for Aging Research appreciates the Administration’s efforts to lower prescription drug costs, we oppose the President’s EO on the International Pricing Index (IPI). To express the urgency of opposing the IPI, the Alliance joined nearly 50 national aging and patient advocacy organizations in cancer, heart disease, rare diseases, mental health, Parkinson’s, lupus, and other conditions in a letter sent this week to Congressional leaders.
The IPI EO would require Medicare Part B drug prices to be based on an international average of prices from Canada and other countries. While price competition with other countries seems reasonable on its face, in practice it would have a disproportionately negative effect on companies that have newer or more innovative products on the market, often for what are the most challenging diseases. Without innovation, potential treatments for Alzheimer’s disease, cancer, and rare diseases will be delayed or even derailed, as will the ability of the industry to effectively respond to the next global pandemic.
The practical impact of this policy for beneficiaries is highly questionable. For example, an Avalere study found that fewer than one percent of older adults in Medicare Part B would see a reduction in out-of-pocket (OOP) costs as a result of the IPI Model.
Regrettably, an IPI would also effectively endorse the use of discriminatory cost-effectiveness standards used by foreign governments. Many of the referenced countries, such as the United Kingdom and Canada, make drug reimbursement and coverage decisions based on cost-effectiveness assessments tied to the quality-adjusted life-year (QALY). These QALY assessments assign a financial value to the patients for whom a given treatment is intended.
According to QALY assessments, if the group is sicker, older, and/or disabled, their value is less. When applied to healthcare decision-making, the results can mean that some patients—people with disabilities, veterans, and older adults—are deemed “too expensive” to receive care. In just one example, a study using QALYs found that an early pregnancy loss (miscarriage) had a higher “utility” (i.e., value) than a child born with moderate-to-severe Down syndrome. The National Council on Disability (an independent federal agency) report on QALYs explicitly called on the Trump Administration to rescind the IPI because it would rely on prices set internationally using discriminatory metrics of value.
QALY is a generalized metric that cannot account for health disparities, incorporating a bias that hurts racial minorities and low-income communities. The Alliance believes the Administration should, in the midst of a national reckoning on systemic racism, work to dismantle discriminatory policies rather than create new initiatives that codify bias.
QALYs originated in the 1960s when the British government was searching for ways to ration health care for its National Health Service. This is an important premise to recognize—if we embrace the IPI, we are embracing healthcare rationing. Rationing in many European countries has not only resulted in access issues but has also translated into higher mortality in chronic diseases such as cancer and cardiovascular disease.
The United States has repeatedly rejected QALYs and similar assessments as the basis for making drug coverage and reimbursement decisions. The Rehabilitation Act and Title II of the Americans with Disabilities Act (ADA) provide protections against cost-effectiveness standards in the Medicare and Medicaid programs.
Effectiveness should be measured by improvements to a patient’s condition and quality of life, rather than personal characteristics or health status. We hope the Administration reverses course and examines alternatives that would successfully lower OOP drug costs for our nation’s patients.
About the Alliance for Aging Research
The Alliance for Aging Research is the leading nonprofit organization dedicated to accelerating the pace of scientific discoveries and their application to vastly improve the universal human experience of aging and health. The Alliance believes advances in research help people live longer, happier, more productive lives and reduce healthcare costs over the long term. For more than 30 years, the Alliance has guided efforts to substantially increase funding and focus for aging at the National Institutes of Health and Food and Drug Administration; built influential coalitions to guide groundbreaking regulatory improvements for age-related diseases; and created award-winning, high-impact educational materials to improve the health and well-being of older adults and their family caregivers. For more information, visit www.agingresearch.org
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