Insights on Excessive Drug Costs and Using QALYs to Determine Value

May 3, 2021

Dan Ollendorf of the Center for the Evaluation of Value and Risk in Health at Tufts University Medical Center and co-author of a new book on drug pricing discusses his thoughts on how to address high prescription drug costs. He notes that using a measure of quality-adjusted life years (QALYs) could indicate the value of a drug as part of a cost-effectiveness recommendation, as could reference pricing and a federal health technology assessment. He also discusses the impacts of generic drugs on pricing.

Dr. Ollendorf notes, “Prices are very high in the U.S. We’ve seen lots of studies and publications showing that they’re very high here — much higher than they are in other countries. And it seems as though when the price is well aligned with the value to the patient, it’s almost as if it’s an accident,” adding, “The other thing to keep in mind is that the QALY is one building block of a cost-effectiveness analysis. Those analyses themselves are subject to a good deal of uncertainty because what you’re doing is extrapolating the experience from a short-term clinical trial and trying to understand how those effects play out over time. So there are uncertainties there.” Read more here.