The debate surrounding prescription drug prices often seems, well, confusing. There is the constant chatter about “skyrocketing” drug prices, even as the facts tell a different story. And then there is the near constant misunderstanding about a medicine’s list price (set by drugmakers) versus what patients must pay out of pocket (set by insurance companies).
Sometimes it’s hard separating myth from reality, especially with so many powerful special interests trying to pin the blame for high health care costs on biotech innovators (also not true). As we have noted before, one organization that has helped spread misinformation about prescription drug costs is the Institute for Economic and Clinical Review or ICER.
Insurers, doctors, patients, drugmakers and others currently have a voice in deciding the right value for medicine. ICER wants to replace this free and fair market-based system with its own one-size-fits-all approach. Much like government bureaucrats dictate the price of medicines in countries with single-payer health care, ICER seeks to be the sole arbiter that decides what an innovative treatment is worth (and ultimately whether patients should have access to it).
As we have noted, ICER’s reports have long been criticized for discriminating against certain patients, lacking transparency, and for failing to take a holistic view. Then it’s no surprise ICER’s latest report—purporting to show “unjustified price increases”—suffers from many of the same fatal flaws. The false premise of this report suggests that any change in a drug’s price that’s not backed by ICER’s definition of “new clinical evidence” is inherently unjustified. Here are three key problems with ICER’s latest report:
Problem #1: A narrow perspective. ICER has adopted—with little transparency or public feedback—overly strict rules about what constitutes “new clinical evidence.” In fact, ICER rejected more than 99% of the evidence drugmakers submitted as part of their engagement with this report, leaving ICER to serve as both judge and jury over what evidence is worthy of demonstrating new clinical benefit. It seems when it comes to assessing the value of an innovative therapy, ICER isn’t interested at all in what the actual innovators have to say.
Problem #2: Ignores important factors. The ICER report ignores myriad facts that always inform decisions about the price for prescription drugs, such as competition within the market, the research and development of new medicines and the preferences of insurers and other payers. These and other important factors—which have long played a role in determining a medicine’s value—were disregarded in ICER’s analysis.
Problem #3:Destined to fail. The entire basis for ICER’s latest report—the evidence of new clinical benefit—represents a small fraction of a much bigger pricing equation. To make matters worse, ICER admitted that it could not complete a full economic analysis of the products that were part of its report. This approach all but guaranteed those medicines included in the report were destined to fall short of ICER’s biased standard.
When a mother recently asked how she was supposed to quantify the value of her son’s life, ICER President Steve Pearson noted, “[T]hat’s why we don’t have you vote.” This cold remark and this most recent misleading report show why the public and policymakers can’t trust ICER to provide a fair and honest assessment for determining the value of medicine.