Drug Costs

Who Is Behind ICER’s Drug-Pricing Report?

October 10, 2019 10:11 am

Earlier this week FiercePharma reported, “Just five days after releasing a 145-page draft report suggesting that three next-generation treatments for rheumatoid arthritis would be unlikely to be cost-effective, the Institute for Clinical and Economic Review (ICER) has taken the unusual step of backtracking on its own number crunching.”


ICER Vice President of Communications and Outreach David Whitrap told FiercePharma that, within the last few days, the organization determined that it needed to “reevaluate the modeling approach” immediately. ICER did not say how it alter its approach.


Two days after this story broke – after ICER had issued another report on drug pricing – Axios’ Bob Herman came to the organization’s defense. The news outlet said the latest report “is transparent, telling readers that none of the funding for its report came from any part of the industry and outlining clearly what it considered to be acceptable research.”


Indeed, the report does say, “No funding for this work comes from health insurers, pharmacy benefit managers (PBMs), or life science companies.”


The emphasis there is ours. The words are specific, but money, of course, is fungible.


Even if insurers and PBMs did not write a check for this specific “study,” ICER acknowledges on its own webpage that “since June 2018” it has received funding from Blue Cross Blue Shield of Massachusetts, Blue Shield of California Foundation, and the National Institute for Health Care Management (NIHCM), which was founded “in 1993 by a group of forward-thinking health plan CEOs.” Today, NIHCM’s board of directors includes the CEOs of Arkansas Blue Cross and Blue Shield, Anthem, Horizon Blue Cross Blue Shield of New Jersey, Blue Cross Blue Shield of Massachusetts, Wellmark, and several other health insurance organizations.


Nowhere in its story did Axios note who did pay for the report.


Direct funding came from the Laura and John Arnold Foundation, the “billionaire couple” that, as STAT News has explained “is pumping money into the drug-pricing debate.” (The Arnold Foundation promoted the Axios story on Twitter.)


According to The Wall Street Journal, as of last October, John Arnold had spent more than $100 million on health care-related grants. He also is invested in a hospital-run organization that is trying to manufacture generic drugs. Additionally, Arnold has said, “Everybody thinks that the pharma industry is abusive in their tactics and doesn’t price drugs fairly.”


Clearly, Arnold funding comes with a specific point of view.


And, despite John Arnold’s claims, it is not a point of view shared by “everybody.”


STAT News recently asked University of Pittsburgh professor Dr. Ben Davies how to avoid drug shortages. He said, “Oh, God, I think the number one thing, and I’ve said this publicly and I’ve written about it, you have to think, unfortunately, even though I’m a card-carrying liberal, you have to raise the price of the drug. If manufacturers aren’t going to make any money on the drug, they’re simply not going to be that interested in making it.”


Another billionaire, Bill Gates, was asked during the last presidential campaign about the drug-pricing debate. He said, “I think the current system [in the United States is better than most other systems one can imagine. … I mean curing hepatitis C. This is a phenomenal thing and now you have multiple drug companies competing in terms of the quality and the price of that offering. The drug companies are turning out miracles, and we need their R&D budgets to stay strong.”


Not everyone agree that ICER’s point of view, or methodology, either. Back in February, Pioneer Institute Visiting Fellow Dr. William Smith said ICER should not use quality-adjusted life year calculations. He noted, “Because of controversy surrounding QALYs, Congress banned their use in cost-effectiveness reviews in the Medicare program.” Yet ICER “continues to market QALYs as a useful tool for Medicaid, commercial health plans, and pharmacy benefit managers.”


By digging into who pays ICER’s bills, it is clear why.