Should pharma fear ICER?

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Pharma doesn't seem to know what to do with — or about — the Institute for Clinical and Economic Review (ICER).

On one hand, nearly everyone in the healthcare ecosystem agrees on the need for a more comprehensive value assessment framework, one that takes into account real-world evidence and bakes in the costs associated with innovation. If we're going to complete the shift toward value and outcomes, the thinking goes, we better figure out a thoughtful way of making sense of the current economic landscape.

On the other hand, ICER's attempts to do just that haven't been embraced by pharma. The organization caught the industry's attention when it weighed in on the cost of hepatitis C drugs (its verdict: not worth the cost) and next-generation cholesterol medicines (ditto). In the wake of this, Amgen blasted ICER and its “opaque methods” even before the group completed its assessment of multiple myeloma medicines.

Meanwhile, many people on the brand side aren't entirely aware of what ICER is, much less the breadth of its mission. The confusion, combined with press reports that often misstate or overstate ICER's purpose, has created a perception out of whack with reality.

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This dichotomy bemuses ICER supporters and critics alike. “[ICER is] providing a credible source of cost-effectiveness information, which is hard to find,” says Pat Gleason, senior director, health outcomes at Prime Therapeutics, one of the 22 member organizations of ICER. “Federal agencies cannot look at anything related to cost-effectiveness. ICER has filled the void, and has done so really well.”


Susan Shiff, Merck

Others remain skeptical. “There continue to be some natural growing pains with the development and application of value frameworks in the U.S., as there would be with any new approach that has potential to change the way healthcare is delivered to large patient populations,” says Susan Shiff, Ph.D., SVP and head of the Center for Observational and Real-World Evidence (CORE) at Merck, also a member organization. “ICER has made great progress, but significant areas for improvement remain.”

Dr. Steve Pearson, ICER's founder and president, isn't one to dwell on the criticism or bask in praise. Rather, he paints his organization as a work in progress, ready to collaborate with drugmakers, payers, academics, and economists to affect meaningful change.

“[The attention] is a sign of not just our ongoing impact, but also the benefit of having an independent assessment of need and value,” he says.

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Pearson is keenly aware of the tension that has heightened as ICER's reports have become more conspicuously consumed by insurers and government entities (such as the Department of Veteran Affairs, which started integrating ICER assessments into its formulary management process in June). “As the reports began to get used by Express Scripts and other entities, there was no way the relationship [with pharma] wasn't going to get more complicated,” he concedes. “Some companies don't agree with the thrust of what we're trying to do. They think the market should determine pricing. Others feel there is a role for independent analysis, whether governmental or nongovernmental, but disagree with our specific methods.”

For the uninitiated, ICER is a nonprofit that seeks to determine whether a given drug is worth its price. It was founded in late 2006 and initially focused its attention elsewhere: conducting price versus merit analyses for robotic surgeries and proton beam therapy, among other procedures. At the time, such procedures were the ones that prompted concern about whether a price tag matched up with value.

That all changed when the FDA gave the thumbs-up to Gilead Sciences' blockbuster cure for hepatitis C, Sovaldi, in December 2013. The company's decision to list price it at $84,000 for a 12-week treatment course started the pricing debate that rages to this day — and opened the door for an organization such as ICER. In its draft report on Sovaldi, ICER declared the drug wasn't worth the money.

Were payers listening? It's anyone's guess, but the report got pharma's attention. “It was a pivot point,” Pearson recalls. “All of a sudden, the whole country seemed aware the innovation coming into pharma created tension.” This had a secondary effect on ICER, which was perceived as having led the “Sovaldi costs too much” brigade.

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“A lot of people feel we suddenly sprung out of Zeus' head full-grown with the Sovaldi report in hand, but we'd been working with manufacturers and payers for six years before that,” Pearson adds.

Photo credit: Getty Images


ICER's defenders and critics agree on a few counts. They believe the group's heart is in the right place and that it is earnestly striving to improve the underlying economics of the healthcare system. They also acknowledge ICER has gone out of its way to respond to concerns, whether from manufacturers, insurers, the academic community, or organizations pushing value assessment schemes of their own.

“One of the misperceptions [about ICER] is that it isn't listening to all entities with a stake in the game,” Gleason says. “It has changed its value framework method in response. It posts the feedback. It's great for everyone that ICER isn't closed-minded.”

Even as he admits he's “preordained to be skeptical of ICER,” Wayne Winegarden, Ph.D., senior fellow in business and economics at the Pacific Research Institute and a contributing editor for Econostats at George Mason University, tends to agree. “It embraces comments from people who take issue,” he says.

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“As Andy Warhol said, they're famous for being famous,” explains Peter Pitts, president and cofounder of the nonprofit Center for Medicine in the Public Interest. “ICER's reports always say the same thing — that older and generic drugs are more efficient for the system and new tech isn't worth the effort. It's an anti-innovation entity.”

Mitch Higashi, VP, U.S. medical health economics and outcomes research at Bristol-Myers Squibb, puts it a bit more delicately. “I worry ICER's way of doing a value framework is becoming obsolete,” he explains. “If it wants to have a relevant voice, it has to innovate at the same pace as the rest of us.”

Among the charges critics level at ICER, stifling innovation ranks atop the list. They believe the organization understands the system is shifting from volume-based to quality-based, yet wonder why it hasn't adjusted its value assessment framework.

“You don't get anywhere by comparing drug A versus drug B in an asylum. You go out and get those patient-centered definitions of quality,” Higashi continues. Pitts agrees, adding, “Even the FDA recognizes patient input is critical. ICER is using 19th century tech to judge 21st century medicines.”

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Pitts' and Higashi's remarks hit at another oft-cited criticism of ICER: The nonprofit's methodology is so outdated, it's almost useless to anyone outside its walls. “You have an organization pushing price controls and justifying them based on a methodology that makes some leaps of faith in its assumptions,” Winegarden says. “It creates an aura of precision that's not really there.”

“For me and my team, it comes down to the methods,” adds Higashi. “When those methods don't make sense, we start asking questions.”

According to ICER's critics, it hasn't helped that the organization hasn't been transparent about communicating the reasoning behind its assessments. “Transparency is the biggest [problem]. ICER's model can't be easily replicated,” notes National Pharmaceutical Council chief science officer and EVP Robert Dubois, Ph.D., who serves on ICER's advisory board.

Dubois, like others who take issue with ICER's transparency, points to an open source model developed by the Innovation and Value Initiative. “Anyone can download the model, modify it, adjust for different parameters, or choose different approaches for analysis. All stakeholders interested in value assessment would benefit from being able to replicate ICER's and others' models,” he notes.

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Louis Garrison, Ph.D., a professor at the University of Washington School of Pharmacy and board member of the International Society For Pharmacoeconomics and Outcomes Research, agrees, adding, “[ICER] needs to share more of its models with industry and perhaps even use industry's models.”

Meanwhile, critics and even some supporters remain baffled by ICER's decision to publish its work infrequently in peer-reviewed journals. Doing so, they say, would further bolster the credibility of its reports.


Steve Pearson, ICER

“During my time at Bristol-Myers Squibb, we've participated in three ICER value assessments, but none of them have been published in peer-reviewed literature,” Higashi says. “Its assessments are done behind closed doors with a model we can't access and calculations we can't see. I have no idea if any of it is rigorous enough to withstand a formal peer review.”

Asked to address these and other criticisms of ICER, Pearson doesn't take the bait. “We are listening and willing to learn,” he says. “Unless we did our reports in a hermetically sealed room where we wouldn't be influenced by interested parties, there's always going to be some tension.”

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So how can ICER — not to mention other purveyors of value frameworks — get better? It depends on who you ask, but tweaks might include any or all of the following: Bringing more real-world evidence into its considerations; tweaking its methodology and philosophy toward a broader concept of value; focusing on treatment guidelines by disease category, rather than on a product-by-product basis; and better articulating the rationale for the thresholds it applies.

One proposal most ICER critics (and even some of its boosters) support relates to the timing of the organization's reviews. Many of the drugs reviewed by ICER are first-in-class. A few stand as the only treatment for a given condition. Waiting for a set duration after launch — say, six months — could allow for the consideration of real-world evidence or other information that may not have been deemed essential earlier in the process.

“[The timing] creates a tension between ICER's desire for reviews at the time of product launch and the reality that important data are not available at that time,” Dubois explains. “ICER should consider waiting to review a product until a year after its launch, or putting a re-review policy in place.”

Perhaps the assembly of a value framework that will come within spitting distance of satisfying myriad interested parties is a nigh-impossible task.

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“Medicines are unique economic goods. We only produce 30 or 40 a year,” Garrison explains. “At the same time, if you're attempting to work with [those medicines] before they launch, you're going to have a hard time keeping up with the rapidity of entrance in the market.”

Let's not forget payers conduct their own reviews, which means reports issued by ICER and others may not have the influence many people assign to them. “These are sophisticated buyers,” Garrison adds.

Still, given the passion ICER ignites among boosters and critics, it is clear the group's efforts are resonating. Where there's a lack of information or systematic analysis and a demand, as there is for value assessment of high-cost medicines, somebody will fill the void. It's not as if the organizations behind similar value-assessment schemes in other industries — Underwriters Laboratories, Good Housekeeping and its venerable seal of approval — waited for permission before diving into the fray.

The debate over ICER's methodology may simmer for years to come. And Pearson is perfectly OK with that. “The course we're on feels right,” he says.

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