AI Article Synopsis
- The US Inflation Reduction Act prohibits Medicare and Medicaid from using discriminatory value assessment methods against older, terminally ill, or disabled individuals when determining maximum prescription drug prices.
- New assessment approaches like Equal Value of Life-years (EVL) and Healthy Years in Total (HYT) have been proposed but lack solid economic foundations, leading to inconsistent decision-making and negative outcomes for certain patient groups.
- The authors suggest an alternative method grounded in Generalized Risk-Adjusted Cost-Effectiveness (GRACE) to address these issues and provide a more equitable evaluation of drug value.
Article Abstract
The US Inflation Reduction Act (IRA) prohibits the Centers for Medicare and Medicaid Services (CMS) from using standard quality-adjusted life-years or other value assessment methods that discriminate against the aged, terminally ill, or disabled when setting maximum fair prices for prescription drugs. This policy has reignited interest in methods for assessing value without discrimination. Equal value of life-years gained (EVL), healthy years in total (HYT), and Generalized Risk-Adjusted Cost-Effectiveness (GRACE) have emerged as proposals. Neither EVL nor HYT rests on well-articulated microeconomic foundations. We show that they produce decisions that are inconsistent over time in a variety of ways, including: (1) failure to support additivity and indirect comparison in cases where the standard-of-care therapy changes over time; (2) strictly negative value of survival gains that accrue from a new, better standard-of-care, particularly for the disabled themselves; (3) unbounded average value of survival gains; and (4) non-convex survival preferences. We propose an alternative method that relies on GRACE and its microeconomic foundations.
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| http://www.ncbi.nlm.nih.gov/pmc/articles/PMC11639167 | PMC |
| http://dx.doi.org/10.1007/s10198-023-01659-7 | DOI Listing |
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