Understanding ICER’s Evolving Influence on Drug Pricing and Negotiation

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ICER is eager to position itself as the primary comparative and cost-effectiveness research body in the US. While their activity has been traditionally more limited to product-specific reviews, the Institute is increasingly looking to shape the broader debate around value and drug pricing.

On October 8, the Institute for Clinical and Economic Review (ICER) released its inaugural Unsupported Price Increase (UPI) Report. In it, ICER reviewed products that represented the largest share of US spending from 2017-2018 and selected 8 products whose estimated net price increases were correlated to greatest spending over the 2-year time period. ICER also included 1 additional product in response to public request. The therapies highlighted by ICER are mostly specialty drugs concentrated in 4 key therapeutic areas: oncology, rheumatology, neurology, and HIV.

The UPI Report did not include cost-effectiveness or full economic analyses of each product reviewed; instead, ICER focused solely on whether or not new evidence existed for each product to potentially “justify” price increases. The Institute considered randomized clinical controlled trials, comparative observational studies, and large uncontrolled studies released between January 2016 and December 2018 and determined that only 2 of the 9 products had new evidence that could potentially support their associated price increases.

ICER’s decision to undertake these annual price increase reviews comes on the heels of a strong uptick in the volume and frequency of the economic effectiveness reviews they have already conducted. Since 2007, ICER has released final evidence reports on 44 therapeutic areas, 33 of which have focused on drugs. Within these reports, 70 of the 122 drugs reviewed (57%) had market prices above ICER’s established cost-effectiveness thresholds. ICER conducted 28 of the 33 reviews (84%) since 2016 and, among these more recent reviews, 65 of the 106 drugs reviewed (61%) had market prices above ICER’s cost-effectiveness thresholds. The increasing rate at which ICER is conducting these reviews, coupled with the Institute’s proactive strategy to review products at or near FDA approval, continue to signal ICER’s ambition to position itself as an influential entity in assessing value.

Products Determined to Exceed Cost-Effective Thresholds
Number of Products Reviewed Over Time

In addition to the UPI Report and ICER’s more traditional cost-effectiveness evaluations, ICER also publishes white papers, action guides, and journal articles on issues related to comparative effectiveness methodology, technology assessment, coverage decision making, and healthcare financing. For example, ICER published “Value, Access, and Incentives for Innovation: Policy Perspectives on Alternative Models for Pharmaceutical Rebates” in March 2019, evaluating the advantages and disadvantages of 3 major alternative models to rebates (i.e., 100% pass through, point of sale, and elimination). Furthermore, ICER has also been forming partnerships in the last 2 years with third-party entities (e.g., Veterans Affairs) to support the integration of ICER’s reviews into formulary development processes.

ICER’s uptick in activities is occurring in an evolving policy landscape with policymakers increasingly focusing on potential drug pricing reforms to slow prescription spending in public markets. Various federal policy proposals, including ones related to drug price negotiation or reference pricing, are looking to increase the use of comparative clinical and cost-effectiveness data, while many states are interested in conducting reviews to assess whether prices or price increases are excessive. Given these dynamics, ICER appears to be taking this opportunity to increase its prominence among both payers and policymakers. As a result, stakeholders should seek to understand ICER’s role and consider these key questions:

  • How will ICER’s role in the US healthcare market continue to evolve, and what does that mean for patient access?
  • How are payers using ICER assessments and reports to inform coverage policies and formulary negotiations?
  • How are policy makers using ICER assessments when considering potential reforms around drug pricing, patient access, and budget impact?
  • How are stakeholders (e.g., manufacturers, plans, patient advocacy groups) reacting to and engaging with ICER?
  • What therapeutic areas are likely to be included in future ICER reviews?
  • How will ICER seek to expand its focus to other non-interventions (e.g., digital health, clinical pathways)?

To learn more about Avalere’s value, access, and policy work, connect with us.

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