ICER to work with VA on its drug price choices and payments

Veterans affairs sign
Nonprofit drug price analysis group ICER will work with the Department of Veterans Affairs to use its drug analysis in setting prices for the VA's pharmacy benefits.

ICER, the drug price analysts the industry loves to hate, is getting a chance to practice what it preaches. It will work with the Department of Veterans Affairs on negotiating the prices the VA will pay for drugs.

The Institute for Clinical and Economic Review (ICER) said Tuesday it will help the VA’s pharmacy benefits management services office use ICER drug price assessment reports to decide which drugs to cover and to dicker with drugmakers and wholesalers on price.

“Our mission has always been to support a more effective, affordable, and just healthcare system by providing objective analysis of the effectiveness and value of different care options," said ICER President Steven Pearson, M.D., in a release. "We are therefore very proud to begin a concerted effort to work with, and learn from, the pharmacy team at the VA."

ICER, a Boston-based independent nonprofit organization, was formed in 2005, and for about a decade its researchers were focused on healthcare costs in general. But in 2014, it began evaluating new drugs, analyzing their cost and effectiveness and issuing reports that indicated at what price point a drug was worth its cost, generally well below the list prices drugmakers set.

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It has done evaluations on some of the most highly anticipated drugs in the last several years, including Gilead's Sovaldi and the new PCSK9 cholesterol fighters from Amgen and from partners Sanofi and Regeneron. Its report suggested that the PCSK9 meds needed an 85% price cut to be worth using.

Those kinds of reports have elicited hot criticisms from some drugmakers of its techniques for arriving at price suggestions. Bristol-Myers Squibb lashed out at a report on half-dozen high-priced multiple myeloma treatment regimens, including BMS’ Empliciti, that said they were far less cost effective than the standard treatment with Celgene's Revlimid and dexamethasone. BMS called the report flawed and said it could stand in the way of patients getting drugs that could improve their lives.

The group has taken the criticism to heart. After hearing from drugmakers, academia, payers and others, ICER rolled out some significant revisions to its methodology earlier this year.

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It changed its quality-adjusted life year threshold, a common measurement in healthcare costs. It has lowered that to $50,000 to $150,000, compared to the group’s previous range of $100,000 to $150,000. ICER, with the help of a consulting group, will also review drugs at their price minus rebates, rather than weighing list prices.

All of that will be put into play in helping the VA. ICER’s Pearson pointed out that all of its reports are in the public domain so anyone can use them. It will help the PBM at Veterans Affairs, however, on how it can use the ICER reports “in the context of its own population.”

“We will also assist the VA in exploring new ways it can use the reports to continue to provide a safe, effective and sustainable prescription benefit while more closely aligning a drug's price with the value it provides to Veterans and the U.S. taxpayer," Pearson said.