NCD Letter to CBO on reliance on the QALY to estimate budgetary scoring

Skip to Page Content

April 7, 2021

Mr. Phillip Swagel
Congressional Budget Office
Ford House Office Building, Fourth Floor
Washington, DC 20515-6925

Re: Congressional Budget Office’s Model of Drug Price Negotiations Under the Elijah E. Cummings Lower Drug Costs Now Act

Dear Mr. Swagel:

As Chairman of the National Council on Disability (NCD), I write to express concerns about the Congressional Budget Office’s (CBO) reliance on the quality-adjusted life year (QALY) to estimate the budgetary effects of H.R.3, the Elijah E. Cummings Lower Drug Costs Now Act.[1]

We are troubled that although CBO recognized that concerns have been raised about the discriminatory design and impact of the QALY, it described the discrimination as “potential,” and opted to utilize it because it was “the best available to CBO and is consistent with the approach taken by many countries to negotiate drug prices.”[2] This makes light of the fact that the QALY assigns a lower value to the lives of people with disabilities and chronic illnesses. It also ignores the fact that countries that rely on the QALY to set drug prices have restricted or denied patients with disabilities access to effective drugs used to treat chronic conditions and to breakthrough medications.

In 2019, NCD published, “Quality-Adjusted Life Years and the Devaluation of Life with a Disability,” describing the QALY methodology and its ethical and legal implications. NCD found sufficient evidence of the discriminatory effects of QALYs to warrant concern and recommend its prohibition. Our recommendation to prohibit the use of QALYs is based on issues raised by bioethicists, patient rights groups, and disability rights advocates; compelling arguments from prominent bioethicists condemning the use of QALYs; and the inability of patients in countries where QALYs are used to obtain coverage of medications for chronic illnesses.[3]

In fact, the restricted access occurring in countries utilizing QALY-based cost effectiveness research raised concerns that its use in the U.S. would result in rationing care to seniors and people with disabilities, leading Congress to prohibit its use under the Affordable Care Act of 2010 (ACA).[4] The ACA prohibits the Patient-Centered Outcomes Research Institute (PCORI) from using the QALY or similar measure “that discounts the value of a life because of an individual’s disability as a threshold to establish what type of health care is cost effective or recommended.”[5] It also prohibits the Secretary of Health and Human Services from using the QALY, or similar measures, to determine coverage, reimbursement, or incentive programs under the Medicare program.[6]

Based on the discriminatory design of the QALY method, resulting in restricting access to life-sustaining and lifesaving drugs and treatments, and recognition of the concerns that led to the prohibition of its use under the ACA, NCD recommends that CBO utilize alternate methods to estimate the budgetary effects of any future drug pricing proposals. As we set forth in our 2019 report, one such alternative method is multi-criteria decision analysis, which can be used in a nondiscriminatory manner. It is significantly more difficult, if not impossible, to use QALYs in a nondiscriminatory manner.

We offer to brief you and members of your staff on the findings of our 2019 report and to amplify the basis for our concerns.

Respectfully,

Andrés J. Gallegos
Chairman




[2] CBO’s Model of Drug Price Negotiations Under the Elijah E. Cummings Lower Drug Costs Now Act: Working Paper 2021-01, at 10 (February 4, 2021), available at https://www.cbo.gov/publication/56905.

[3] National Council on Disability, “Quality-Adjusted Life Years and the Devaluation of Life with a Disability” (2019), available at https://ncd.gov/sites/default/files/NCD_Quality_Adjusted_Life_Report_508... also see, NCD’s letter of January 15, 2021, to the Centers for Medicare and Medicaid Services regarding the Most Favored Nation Model Interim Final Rule, available at https://ncd.gov/publications/2021/ncd-letter-cms-most-favored-nation-rule (explaining the discriminatory nature and impact of the QALY and the danger of importing this metric through reliance on foreign drug prices).

[4] See, e.g., statements made during House and Senate debates on health care reform bills in October and November of 2009, expressing concern that U.S. use of cost-effectiveness research, like that utilized in the United Kingdom and Canada, would result in rationing care similar to that experienced by patients in those countries: Senator Kyl (AZ). Congressional Record 155:142 (October 5, 2009) p. S10081; Senator McConnell (KY). Congressional Record 155:19 (October 28, 2009) p. S25860; Senator Kyl (AZ). Congressional Record 155:161 (November 2, 2009) p. S10970; Representative Broun (GA). Congressional Record 155:162 (November 3, 2009) p. H12274;

Representative Pitts (PA). Congressional Record 155:163 (November 4, 2009) p. H12293; Senator Roberts (KS). Congressional Record 155:173 (November 20, 2009) p. S11888.

[5] Patient Protection and Affordable Care Act, Pub. L. 111–148, title VI, § 6301(c), Mar. 23, 2010 (codified at 42 U.S.C. 1320e-1(e)(The Patient-Centered Outcomes Research Institute…shall not develop or employ a dollars-per-quality adjusted life year (or similar measure that discounts the value of a life because of an individual’s disability) as a threshold to establish what type of health care is cost effective or recommended. The Secretary shall not utilize such an adjusted life year (or such a similar measure) as a threshold to determine coverage, reimbursement, or incentive programs under subchapter XVIII.

[6] Id.