Underestimating the Value of an Intervention: The Case for Including Productivity in Value Assessments and Formulary Design

BACKGROUND: Value assessment reports are increasingly being considered in health care coverage decisions. The inputs included and analytic methodologies underlying these reports should include all components of value. OBJECTIVE: To determine whether and how productivity was included in a value assessment, compare the incremental cost per quality-adjusted life-year (cost/QALY) estimates with and without productivity, assess if inclusion of productivity changed the value category and estimate the direction and magnitude of change. METHODS: We reviewed pharmaceutical value assessment reports published between March 2017 and July 2019 by the Institute for Clinical and Economic Review (ICER) to determine whether productivity was included and how it was reported (i.e., co-base case or scenario analysis). Within each report, we identified unique treatment comparisons for which modelers estimated an incremental cost/QALY. We categorized the incremental cost/QALY estimates using ICER’s willingness-to-pay (WTP) categories and assessed if inclusion of productivity changed the value category (i.e., < $50,000/QALY). For reports that included 2 numerical estimates, we assessed the direction and magnitude of change when productivity was included. RESULTS: Of the 19 reports that evaluated pharmaceutical treatments, 18 (94.7%) included productivity. Two reports (11.1%) incorporated productivity in a co-base case analysis, and 16 included productivity in a scenario analysis. Across these 18 reports, there were 75 unique comparisons of pharmaceutical interventions. Across the 75 comparisons, 4 (5.3%), 3 (4.0%), 8 (10.6%), and 1 (1.3%) of the coverage decisions would change at the $50,000/QALY, $100,000/QALY, $150,000/QALY, and $500,000/QALY threshold, respectively. Sixty comparisons included 2 numerical cost/QALY estimates. The magnitude of change in the cost/QALY, after including productivity, ranged from –80.1% to 6.8%. The estimated value increased for 54 (72%), decreased for 5 (6.6%), and did not change for 1 (1.7%) of the comparisons. CONCLUSIONS: Value assessment should capture the range of costs and benefits of an intervention. The exclusion of productivity costs can alter, often underestimating, the assessment of value. This may affect coverage decisions—inclusion or exclusion from the insurance benefit—based on these assessments. Value assessment reports intended to be used for health care decision making should include productivity and elevate its visibility by using base-case analyses rather than scenario analyses.