Imagine a world without standards. There would be disagreements about everything. There would be no shared understanding of time and space; no rights and responsibilities; no financial transactions. And there would be no shared language or means of communications to resolve the differences. Utter chaos.
Fortunately, standards have brought relative order to most facets of life and society. But as with English and metric units, standards vary — and things can get lost in translation. You may recall how a Mars probe was lost because of a failure to convert English to metric units.
Standard of care is relatively easy to conceptualize but difficult to operationalize. When payers evaluate new drugs and medtech, they compare the new product to the standard of care — but their views on the standard of care can be, well, irregular.
When payers follow the providers
Payers frequently view a product with the greatest market share as the standard of care. When payers view market leaders as the standard of care, it is typically rooted in economic considerations; successful brands with larger market shares usually can afford to offer larger rebates and/or discounts. In competitive markets, a contract with the market leader can benefit both the payer and the manufacturer — precisely why payers help successful brands succeed by making them preferred products.
When payers allow what’s common (i.e., “standard,” “conventional,” or “customary”) to persist, it may seem like an implied endorsement of the wisdom of crowds. But crowds are not always wise (think: groupthink or herd mentality). Payers know that what appears to be common medical practice varies by place and over time. Payers are pragmatic when selecting a standard of care that does not reflect common provider behavior. Contradicting a small group of specialists, such as oncologists, would be costly if their discontent led to their exit from the provider network.
Appeals and, more importantly, overturned denials, can guide payers’ views on the standard of care. When policies restrict access to a popular product, pushback from providers can signal that the payer is drifting too far from what providers consider to be the standard of care. And the lack of pushback from providers suggests to payers that the standard of care is malleable.
When payers follow the evidence
Payers often turn to U.S.-based evidence assessments (e.g., ICER) and guidelines (e.g., National Comprehensive Cancer Network) for guidance on the standard of care. Influential assessments and guidelines assign a level to the quality and strength of the evidence reviewed. This type of guidance, however, may not always be available, especially for first-in-class products. And up-to-date guidance may not be available at the time a payer reviews a new entrant into an established market.
In the absence of evidence-based guidance, a common problem with rare conditions, payers may turn to evidence found in peer-reviewed journal articles to inform their views on the standard of care. Payers can weigh this evidence on the basis of trial design or other factors, such as the impact and quality of the journal. Alternatively, payers may outsource this function to teams like Hayes Inc., which considers the level of evidence and provides product-specific ratings of efficacy and safety.
Payers leverage their own experience to inform their views on the standard of care. When there are insufficient head-to-head trials and indirect comparisons are strained, payers can turn to real-world evidence by mining their own data for insights to evaluate the relative performance of products.
When payers follow the leaders
Payers routinely ask specialists from their networks to offer an expert opinion about best practices and the standard of care. These experts may be aware of emerging evidence not yet published or incorporated into guidelines. Their opinions may be especially important to payers who try to predict the future standard of care. Of course, their opinions may not be aligned with common practice.
And when lost or uncertain, payers may follow the lead of large competing payers whose policies and shifting preferences can signal a drift in the standard of care.
Standardizing the standard of care
Payers’ views on the standard of care are not standardized, but the process they use and the multiple information sources they consider are very similar. Payers often share the same or similar views on the standard of care. If and when their views diverge, the true standard of care will likely emerge from the marketplace of ideas and reflected in both market access decisions and market share.
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