Should ICER be NICER? The case for analyzing the value of drugs

June 20, 2019
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It’s a tree of ICE, for those who hold fast to it

The headline in today’s Boston GlobePrice watchdog’s influence on drug makers expands; As nonprofit assesses treatments, some fear it inhibits key options— could have been written by a drug industry lobbyist. [And maybe it was, since the online headline instead uses the squeaky phrase ‘mouse that roared.’]

The article itself is more balanced. Of course it quotes the parents of a couple of kids who take expensive meds, objecting to anyone putting a price tag on their lives. But it also quotes health economics experts pointing out that the price can’t be infinity.

The Institute for Clinical and Economic Review (ICER) follows a data-based approach to assessing the value of drugs, utilizing Quality Adjusted Life Years (QALY) and other well developed metrics. It provides guidance on what a drug could be worth, both on an absolute basis and relative to other treatment options. It doesn’t set prices or prevent a drug from being made available by a public or private health plan. At most, it helps contain the prices of drugs that enter the market and points out cases of outright rip-offs.

Elsewhere in the world (pretty much everywhere) there are real forces limiting drug prices and impacting access. In the UK for example, the National Institute for Health and Clinical Excellence (NICE) decides which drugs and treatments will be provided to patients in the National Health Service. Sometimes drugs are rejected or their use is heavily restricted. On the flip side, patients don’t pay for the drugs that are approved.

In the US the drug pricing forces are heavily weighted in favor of higher prices. We shouldn’t fret about an entity like ICER.

Many drug companies have decided to play ball with ICER by providing data to help justify the value of their products. Some, like Vertex and Serepta have pulled back, saying ICER is biased against drugs for rare diseases. I don’t read ICER’s analyses that way.

The quality of ICER’s research is high, but of course the reports are limited by the data and analytical techniques that are available to the organization. The correct response is to build up the availability of real world evidence (RWE), especially from clinical registries that demonstrate how a drug actually improves (or doesn’t improve) the lives of patients. Patient-generated data and information from claims and electronic medical records can be helpful as well.

With better data we can have answers we are more confident in, and we can accumulate evidence on how drugs perform after they are launched, which can offer a refined understanding of their value.

Thanks to the 21st Century Cures Act, enacted in 2016, there is an increased demand for the generation of RWE. The industry is ramping up its spending on RWE for drug approval, safety monitoring, and reimbursement. New analytical techniques and enhanced data availability from wearable devices and other electronic sources are ushering in a heyday for RWE.


By healthcare business consultant David E. Williams, president of Health Business Group.

 

 

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