Caroline Humer reports for Reuters on the value of the Institute for Clinical and Economic Review (ICER) in holding drug prices down. ICER is a small not-for-profit research organization that determines the value of particular drugs and what they should cost. ICER has been effective at helping to lower the price of some prescription drugs.
Most other wealthy countries partner with independent research organizations like ICER to set prices for virtually all prescription drugs. The US government does not have its own agency or a partnership with an independent agency that determines the value of drugs. In this research vacuum, ICER has developed influence.
For example, some people thought that Gilead could charge as much as $10,000 for remdesivir because it was found to be helpful in treating COVID-19 patients. But ICER said that the drug did not justify a price of more than $5,000. Gilead ended up charging $5,700 for a ten-day supply.
ICER’s budget is not large enough to establish the value of all drugs or even most drugs. But, some say it has helped reduce the cost of almost 100 drugs. And, some health insurers keep off of their formularies certain drugs that ICER deems do not offer good value.
Drugs that ICER has determined cost way too much and are not cost-effective include Aubagio, for the treatment of multiple sclerosis, Ninlaro, for the treatment of multiple myeloma, Austedo, for the treatment of Huntington’s disease, and Rebif, an anti-inflammatory for the treatment of multiple sclerosis.
Not surprisingly, the pharmaceutical industry is not accepting ICER’s influence, which is reducing its profits. It is attacking the non-profit any way it can. Often, it relies on non-profits that are funded by pharmaceutical companies to attack ICER.
ICER’s goal is simply to help insurers and other prescription drug purchasers choose drugs that are cost-effective for a given condition, assessing the drug’s price and benefit to quality of life. To establish the fair value of a drug, it relies on a time-tested formula, QALY or quality-adjusted life year, what it costs to extend someone’s life with one year of good health. That is what other countries’ health systems do.
The federal government does not negotiate drug prices for Medicare or Medicaid. In fact, Congress forbade the federal government from using QALY to negotiate drug prices. ICER has been taking on that role, in a way.
Unfortunately, the pharmaceutical industry holds so much sway over pharmacies and other health care providers that CVS Health Corp was not successful at keeping drugs, which ICER has determined are not cost effective, off its formulary for employers.
ICER plans to look at prices for the novel coronavirus vaccine and COVID- 19 treatments with the goal of helping to ensure they are fair.
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