A Framework for Assessing
Medication Value and Cost

Developers of medical innovations (including medications) are asked to justify the effectiveness of their new technology as part of an assessment of whether the innovation deserves to be "covered" (paid for) by the insurer (state or private). Technology that treats symptoms but does not cure or prevent a condition is considered a "halfway" technology. Those that prevent or cure are termed "full" technologies (Weisbrod 1991; Thomas 1974).

Most technologies are "halfway" technologies, such as controlling diabetes, hypertension, cholesterol levels, or cancer. They are assessed for the improvements they make in patient functioning and quality of life and compared with the costs and results of other treatment approaches for the same condition. Mental health technologies, however, are approached as though they were "full" technologies. Like immunizations and curative technologies, new mental health medications are expected to justify their use by showing a "medical cost offset" (positive benefit to cost comparison) in other areas of medical care (and society) as justification for covering the new service. In other words, the cost of a new mental health drug is expected to cause a decline in the use (cost) of other medical care and services, although the drug is to treat and manage a specific psychiatric disorder.

Technology assessment for any innovation requires a framework for analysis. Eight questions are proposed for analyzing whether to adopt a pharmaceutical innovation. Portions draw on a discussion by Weisbrod and LaMay (1999) on the adoption of new technologies. Questions 1-5 are key questions that, if answered in the affirmative, suggest a new medication (or group/class of medications) should be eligible for coverage, even at greater cost. It suggests that a technology's "value" is dependent on whether there is improved health outcomes and health status, not monetary cost alone. Questions 6-8 are questions which may, or may not, add evidence to support paying for a medication. These last questions should be used to advance the debate. They should not be used as the sole basis on which to determine whether access to a medication (technology innovation) will be allowed under a public/private insurance plan.


Is the drug FDA approved?
Federal Food and Drug Administration approval for distribution of a new drug is granted a pharmaceutical company when they have demonstrated substantial evidence that the drug is effective and safe. The evidence of effectiveness is based on adequate and well-controlled clinical studies (Merrill 1999). This is a minimum criterion for adoption of a new drug by a system, but it provides a reviewing body a first level of confidence that the drug under review has already met rigorous clinical criteria before coming to market for sale.


Is the technology (medication) a genuine innovation in treatment?
Is the drug(s) an innovation that can save lives, or dramatically improve the quality

of life? Alternatively, is it only a minor or marginal improvement over already available drugs that accomplish essentially the same thing with equal effectiveness and safety?


Is the health status of the patient at stake?
Does access to medication allow timely use of services in order to achieve the best health outcomes (IOM 1996)? Is the patient's health status or safety significantly impacted or changed by the drug? Is his or her's health better for having taken the medication verses another medication? Is there a need that cannot be met if patients do not have access to that drug, or the class of drugs it represents?


Is the medication the clinical standard of care?
Is the medication(s) the most appropriate (or only) effective treatment for a given condition? Is it the consensus of the medical/mental health community that a specific drug or class of drugs is the treatment of choice? If the care provided were to be challenged in court, would it meet community standards for care?


Is increased cost due to improvements in ability to treat?
Are increased costs due to improvements in the ability to diagnose and treat rather than simply costing more for the same service and outcomes available from another drug? (Drug companies provide the research and development necessary to bring a drug to market. Many take at least 10 years of development work. The expectation of the company is that it will recoup that investment and make a profit. Unless there are efforts to demand reductions in prices, as was done with AIDS, the cost of new drugs can be expected to remain high.)


Is there a direct impact on mental health costs?
Is there an indirect impact on medical costs (medical-cost offset)?

Does use of the medication result in changes in the use (increased or decreased) of other mental health services? Will expanded access to the medication(s) reduce other costs for general medical care for this same patient? Is there less disability? Can the person participate in duties at home or return to work?


Is there an impact on the family?
Does use of the medication change the patient's behavior and their interaction with their families? Does it lessen the illness-related problems in the family or the burdens experienced?


Is there an impact on society?
Does the use of the medication allow improved patient functioning in society? Does it reduce the symptoms of the diseases enough to permit patients to work with improved performance and productivity? Does it reduce the illness-related incidence of homelessness, suicide, and criminal behavior?

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