Blog December 2, 2019

The Relationship Between ICER and Industry is Evolving

drugcostsThe relationship between pharma and the Institute for Clinical and Economic Review (ICER) has seen evolution, since ICER began ruling on the clinical and economic value of drugs, medical devices and other healthcare interventions. Of the 79 treatments that ICER reviewed since beginning its cost-effectiveness analyses in 2015, the group has supported the actual or expected pricing for a reviewed product just 23 times. Companies whose products ICER ruled as not cost effective have asked for greater transparency in its assessment, arguing a lack of complete understanding of the risks faced by patients or the full benefits of the treatment. Another common complaint has been that ICER did not consider the trend towards personalized health care and that the projected overall costs of care without the reviewed treatments were somewhat underestimated. Some patient advocates have also taken issue with ICER’s reviews, calling the algorithms used in the review process discriminatory against the chronically ill, elderly and people with disabilities by calculating their lives to be worth less than younger or not disabled individuals. 

But, as we have previously written, ICER has been gaining influence in the pricing debate, with payers and employers increasingly influenced by ICER’s assessments when determining whether to cover a particular treatment.

As a result, companies are beginning to work more closely with ICER in setting the price of their treatments, because they understand that ICER’s endorsement can be leveraged in coverage and reimbursement discussions. For example, Sanofi and Regeneron proactively reached out to ICER before launching Dupixent (dupilumab), and as a result priced their drug far lower than analysts’ expectations in order to obtain ICER’s cost-effectiveness endorsement. This tactic seems to have worked well, as Dupixent is now well on its way to being considered a blockbuster drug, selling more than $1 billion annually. 

ICER has also been responding to some of the criticism from industry and patients, reconsidering how it models cost-effectiveness, reshaping its appraisals, and revisiting some of its conclusions as new data and new pricing information have emerged. As a result of industry-ICER interactions, some initial “nos” from the watchdog have turned to “yes”es.  For example, after Sanofi and Regeneron’s cholesterol drug Praluent (alicorumab) did not live up to sales expectations, partly due to its price, the companies shared new long-term clinical data on the drug with ICER and lowered the drug’s price to fit within the ICER recommended range. The new determination that Praluent was indeed cost-effective, in turn, led payers to broaden coverage criteria, resulting in increased prescriptions.

ICER is expected to update the assessment framework underpinning its evidence reports on new drugs and health care interventions at the end of this year. What changes are likely to be made in how it judges cost-effectiveness? Will a closer partnership develop between ICER and the pharma industry, as a result of greater public pressure to justify the price of health care interventions?