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Leela Barham is a freelance health economist and policy expert. She has published in peer-reviewed journals and presented at national and international conferences. She has provided advice to the Department of Health and Social Care on policy on pricing of branded medicines to inform the negotiation of a successor to the UK’s Pharmaceutical Price Regulation Scheme (PPRS), the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS), as well as worked with patient groups, the NHS, pharmaceutical companies and many others internationally on the economics of healthcare and pharmaceuticals. Contact Leela on firstname.lastname@example.org
With the US Institute for Clinical and Economic Review (ICER) looking like it is here to stay, Leela Barham considers how its value framework is evolving.
The US Institute for Clinical and Economic Review (ICER) has been making a name for itself. This is not only because it produces a US-focused health technology assessment of new drugs, but also because it suggests the price at which a drug offers value. Leela Barham reports.
At the core of ICERs approach is a value framework. ICER says that the framework “forms the backbone of rigorous, transparent evidence reports”. The aim of the framework is to inform decisions not at the individual doctor-patient level, but rather at the population level. That equates to insurers in the context of the US health care system-be they public, or private. The reality though is that decisions taken at this level can affect individual patients as decisions on access trickle down-that is, if ICER’s reports are used by payers.
The framework includes a number of components (see figure 1) and not everyone agrees that all of them, especially budget impact, should feature. And as ever, the devil is in the detail.
Figure 1: The ICER value framework
As a result of what must have been a great deal of work, ICER announced their latest iteration of the value framework in June 2017. ICER ran a public consultation, receiving over 50 sets of comments as well as hosting a one-day meting with over 40 stakeholders. Not only that, but ICER also consulted on the changes that they developed from their own work and no doubt modified in light of the input received. That led to a further 43 sets of comments.
It will be no surprise to those who keep a close eye on HTA the type of issues tabled, although perhaps some changes might be a surprise. For example, the threshold to determine what is cost effective and what isn’t. ICER will now present a broader range for the threshold when ICER Appraisal Committees vote at public meetings. ICER will still apply the US$100,000 to US150,000 for value based price benchmarks, but a range from US$50,000 to US$175,000 will be presented to the Committees. In light of the rising pressure on prices, you might have thought a lowering would have been tempting.
Pricing features too. ICER will use estimates of net prices instead of list prices. This is a real bug-bear for many because payers all know that the list prices aren’t real prices. That said, industry tends to prefer that discounts remain confidential and would rather that back-calculations aren’t possible.
The latest iteration also more explicitly recognizes that some types of value might not be captured in the numbers; termed “other benefits or disadvantages” and “contextual considerations”. Although already present in the framework, they will be given a separate vote by Committees. That won’t however be used as a quantitative adjustment to the final assessment of value or value-based price benchmarks but be an “input”. The National Organization for Rare Disorders seem pleased with the changes, although as you might expect there are still areas of concern.
Budget impact will remain too but ICER will routinely use the approach of providing a tool that allows payers to put their own assumptions in. That will inform discussions on affordability and access during Policy Roundtables at ICER meetings. The threshold for budget impact has been re-calculated too using more recent data such as growth in US GDP. ICER also take the opportunity to highlight that this is only signaling that a discussion is needed and is not intended nor used as a budget cap. Budget caps in the context of ICER’s work in the US have led to concern of their arbitrary nature and the potential to shift from higher value spend to lower value spend.
Not all ICER assessments have produced a value-based price, but where ICER has, it’s not always been good news, although nor has it always been bad news either. It matters what the threshold for cost-effectiveness is; for example, at US$150,000 cost per Quality Adjusted Life Year (QALY), ICER estimates that TKIs in non-small cell lung cancer (NSLC) could increase price by 15%. At US$100,000 cost per QALY, a 21% discount would be needed. Other treatments for nsclc would all need discounting and some of these would be high; Nivolumab would need as much as a 68% discount under the lowest cost effectiveness threshold.
With ICER being successful in obtaining funding-just one grant from the Laura & John Arnold Foundation given in 2015 is worth US$5.2 million-it looks like it’s going to stay. Although not everyone will be a fan-and there are vocal critics including patients and others - it has got to be a good thing that an independent agency can shine a light on the difficult but impossible to ignore issues of value, price and affordability.
Arguably, it’s better too than the ad hoc extrapolation of HTAs from outside the US since US payers must surely be checking what NICE and others have to say about the very same drugs. The problem with those reports is that reflect a very, very, different context, not only from the structure of the health care system but economically, socially, and culturally too. However, as ever, questions will remain about the who, what, where, and when of what ICER do. With so much at stake, not least the health and well-being of patients and their carers, it’s only right that questions are asked.
If you don’t like the latest iteration of the ICER value framework, you’ll get a chance to influence the next round of evolution, expected to run from the 3rd quarter of 2019.