ICER’s Money Problem: A Self-Appointed 'Drug Pricing Czar'

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While the last year was very difficult for millions of Americans, it was also a period of rapid innovation as leaders in government and the private sector worked to combat a global pandemic. As a result, about half the U.S. adult population is now fully vaccinated for COVID-19 and, in most places, a sense of normalcy is returning.

Given these successes, many were surprised when President Biden recently announced his support for the World Health Organization (WHO) proposal to waive intellectual property (IP) protections for COVID-19 vaccines. After a year that showed the world what was possible when government policy prioritizes scientific advancement, the administration’s actions could end up undercutting future innovation without any immediate public health benefit.

Sadly, this is not an isolated instance – there are other forces actively working to undermine delivery of breakthrough treatments to patients at a faster pace. For the past few months, the Institute for Clinical and Economic Review (ICER), a self-appointed gatekeeper for prescription medicine in the U.S., has been on a public relations offensive to weaken incentives to invest in new treatments.

In April, ICER released a white paper outlining proposed changes to the U.S. Food and Drug Administration’s accelerated approval pathway (AAP). Put simply, the AAP allows for rapid approval of drugs developed for serious conditions, particularly those that are the first available treatment for a condition, or that have distinct advantages over existing treatments. By temporarily eliminating some regulatory hurdles, the AAP program makes it easier to provide some of the most desperate patients access to the newest treatments. And, by most objective measures, the program has been a success, particularly when it comes to cancer treatments.

While ICER’s white paper acknowledged some benefits of the AAP, it also outlined many potential “reforms” to the program. Chief among these reforms was a proposal to increase mandatory rebates or lower reimbursement rates for AAP drugs, with the potential to increase reimbursements in the future based on confirmatory evidence.

On the surface, mandating lower prices until an AAP drug is fully approved may seem like a reasonable idea, but it completely ignores the impact on patients.  Under such a scheme, patient access to innovative treatments would be severely curtailed.  And the promise of newer, better, more specialized treatments may take longer to realize – if that promise is ever realized at all.  Quite simply, creating disadvantageous pricing for AAP drugs creates a disincentive to discover them.

Any regulatory program – including the AAP – should be reexamined over time. However, the principles behind the AAP are sound.  The program works because it prioritizes patient access while still holding drug developers accountable.  It incentivizes development of treatments that would not be worth the financial risk under normal circumstances, including those designed to treat patients who would otherwise be left behind.

It is not surprising that ICER would look at the AAP and recommend steeper mandatory rebates or price cuts.

ICER has a long history of performing research that, far more often than not, concludes that new drugs and treatments are not worth the cost. Their recommendations also typically include demands for increased rebates or lower prices.

Of course, the main audiences for ICER’s valuations are the health insurers and pharmacy benefit managers (PBMs) that use ICER’s conclusions to make decisions about pricing and coverage for new therapies. That is also where much of the organization’s funding comes from. Executives from some of the world’s largest insurers sit on the ICER board, and its president is a former research fellow for the largest insurance industry trade association.

Long story short, there is a significant overlap between ICER’s research outcomes and the profitability of the industry that funds ICER’s activities. ICER insists that it is an independent actor. However, when they advocate regulatory changes that can prevent some of our most vulnerable patients from getting access to cutting-edge treatments, it is clear whose interests they are representing.

The events of the past year have revealed quite a bit about America’s health system. They have exposed weaknesses and highlighted areas in dire need of improvement.

At the same time, they have shown us that policies designed to encourage innovation and scientific advancement can produce miraculous results and benefit the lives of millions of people. We hope that as they debate potential reforms, our elected leaders will look to build on these successes rather than following the advice of supposed experts who are not focused on the needs of patients.

Terry Wilcox is the executive director of Patients Rising. William Smith, PhD, is Visiting Fellow in Life Sciences at the Pioneer Institute in Boston.

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