Drug Costs

What is ICER?

December 3, 2018 11:12 am

Public policy is an alphabet soup of obscure acronyms—and we at APMI are guilty of adding to that jumble. Some refer to government agencies. Others are abbreviations of laws with much longer names. But most refer to groups, like APMI, trying to inform the debate around those policies. Dangers arise when influence groups blur the line between government and advocacy by assuming more official mantles.


That is increasingly the case with the Institute for Clinical and Economic Review, better known in health-policy circles by its acronym ICER. The organization calls itself an “independent and nonpartisan research organization” that “evaluates the clinical and economic value of prescription drugs, medical tests, and other health-care and health-care delivery innovations.” ICER offers its recommended pricing structures to pharmacy benefit managers; government officials who oversee Medicare, Medicaid, and other health care programs; and others in the health care ecosystem.  


To be clear: ICER is not a government agency and, according to its own accounting, receives almost 80 percent of its funding from private foundations, including the Laura and John Arnold Foundation. It also has received funding from health insurance companies.


Since it launched in 2006, ICER has amassed a significant amount of power and, if some state and federal policymakers have their way, the organization will soon help determine what medicine is covered under both state and federal health-care programs.


The question is: to the benefit of whom?


While ICER’s influence is growing, so is the body of research that indicates its rulings are unsound and have a negative impact on patients’ access to important treatments.


Here is what Joe Grogan, associate director for health programs at the Office of Management and Budget (OMB) told POLITICO recently: “There are a ton of private-sector payers whose job it is to evaluate these things and will have the benefit of real-time information from the front lines, from physicians, frankly from patients, from hospitals, from payers who can say, ‘This product in this class is something that I need; here is a valuable price point and do the research.’” Grogan said he is “skeptical of someone sitting in an ivory tower looking at price points and trying to pretend like they understand the market better than the private sector does.”


ICER is that ivory tower.


In an April 2018 report, the group Alliance for Patient Access (APA) argued ICER’s models should not be relied upon because they don’t take into account patient diversity, comorbidities, or the severity of the illness or medical condition from which the patient is suffering. The paper also argued ICER evaluates new drugs too soon after their introduction “when available data may be incomplete.” In the introduction to its report, the APA noted ICER “has come under scrutiny for its methodology and calculations” and questioned the organization’s independence, explaining ICER’s funding “comes directly from health insurers or from nonprofit foundations supported by health insurers.”


A May 2018 report by Xcenda reached a similar conclusion. Like OMB’s Grogan and APA, the report found the type of cost-effectiveness standards promoted by ICER “ignore the real-world needs of providers and patients.” Xcenda also estimated that if Medicare Part B were to apply ICER’s cost-effectiveness model as the basis for its coverage policy, 62 percent to 93 percent of patients with serious, complex conditions could lose access to the medicines on which they depend.


That is a cautionary statistic for politicians who want ICER to play a larger role in determining what medicines government health-care programs cover.