Controversial drug-cost watchdog ICER mulls changes, and pharma's full of suggestions

After taking fire for its drug assessments for more than a year, self-appointed cost-effectiveness watchdog ICER is ready for a rethink. It's invited pharma and patient organizations to the table, and companies are eagerly stepping forward to voice their criticisms.

The Institute for Clinical and Economic Review, which has slammed the pricing on some of pharma's biggest new launches, this week released more than 300 pages of comments on its drug review process from more than 50 companies and patient organizations, with biopharmas such as Bristol-Myers Squibb ($BMY), Amgen ($AMGN), and Sanofi ($SNY) responding.

As they have done informally over the last few months, several drugmakers officially called for more openness at ICER, hoping to glean more info about its review methods. Several letters suggested that the institute places more weight on drugs' benefits instead of focusing so much on their burdens on healthcare budgets.

Amgen, which previously criticized ICER's review of its multiple myeloma med Kyprolis and its PCSK9 cholesterol med Repatha, hit both of those points and more. The California-based Big Biotech, citing transparency concerns, said the institute’s “models remain black boxes that cannot be replicated by the groups ICER thinks should consume and consider them. Although ICER has made some effort to share high-level model specs, the process remains far from fully transparent.”

ICER president Steven Pearson told FiercePharma the “vast majority” of letters provided constructive feedback that the institute will review before suggesting its changes. In December, ICER plans to lay out new draft policies for another round of public comment.

About 45 representatives of pharma companies and patient organizations met with ICER last Friday to discuss potential changes.

“There’s no way you can ever update a process like this and satisfy everybody, because a lot of the comments are in complete opposite directions,” Pearson said. “Some people said, for our budget impact, make the time horizon longer, some people said make it shorter.”

In its letter, Amgen went on to say that ICER should change its calculations to avoid making a drug's cost the "main determinant of health system value."

It's a mistake to focus primarily on cost, Amgen believes, because those "analyses poorly reflect value as they treat healthcare spending as a consumption rather than an investment, and do not take into account any long-term health benefits, cost savings, or improved productivity.”

Industry group BIO said the institute shouldn’t use a drug's list price to determine costs. List price “does not reflect the discounts and rebates that are widely negotiated in the marketplace, nor does it reflect the rebates required by federal healthcare programs," BIO said. Instead, the organization believes ICER should use rebate percentages used by Medicare and Medicaid--which are public--as a rough calculation method.

BMS, for its part, "does not believe ICER’s current process produces scientifically accurate reports," Mitch Higashi, head of U.S. Medical Health Economics and Outcomes Research, told FiercePharma via an emailed statement. He added that it's "potentially misleading to the community to suggest that it should be used as a tool for evaluating drug costs or restricting patient access to innovative medications."

BMS also called for more openness in the process and more emphasis on long-term value, among other points.

In another trend, numerous letters argue that ICER needs a more realistic method of calculating uptake of a new drug. Several stakeholders said the group’s new-drug adoption figures are too high.

The institute’s “uptake assumptions have been largely inaccurate to date and do not take into account payer restrictions, the time it takes to change treatment practices, or patient behaviors involved in adopting new technology,” Janssen’s North America chief scientific officer, Anastasia G. Daifoti, said in a letter.

The institute's calculations for uptake "appear to be significantly biased," she said, "so as to present a far more aggressive scenario than actually plausible, ring the ‘alarm bell’ and unduly pressure manufacturers.”

Relations between industry and the institute have been testy after ICER last year snagged a $5.2 million dollar grant from the Laura and John Arnold Foundation to assess U.S. drug pricing. Drugmakers and their important products were critiqued, and pharma--amid all the pricing scandals and formulary pressure--felt their pricing power being threatened even more. Companies kicked back, and now ICER is opening the door for some give-and-take on its process.  

In June, a feud between biopharma and the group escalated, when BIO claimed that insurance companies were funneling money to the organization put more pressure on drug prices.

Following the new review process, changes to ICER’s methodology won’t just be “cosmetic,” Pearson said, but they likely won’t be a complete overhaul, either.

“We want to make sure that the rules of the road are clear, that they appear valid,” Pearson explained. “We want the results to have integrity. For that to work, we want people to feel like their voices are being heard.”

ICER earlier this year caught criticism from Bristol-Myers Squibb and Amgen after the institute determined that their multiple myeloma meds, Empliciti and Kyprolis, weren’t worth their price tags. Last fall, ICER said new PCSK9 meds should be discounted by two-thirds to 85%.

And just last week, the institute said BMS’ immuno-oncology drug Opdivo, Merck’s ($MRK) checkpoint inhibitor Keytruda and Roche’s ($RHHBY) cancer-fighter Tarceva would need deep discounts to be considered cost-effective in non-small cell lung cancer. 

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