Home health remedies Cost watchdog ICER lays out plans to scrutinize pharma’s costliest price hikes

Cost watchdog ICER lays out plans to scrutinize pharma’s costliest price hikes

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The Institute for Clinical and Economic Review has been a thorn in pharma’s side for years, with its reviews often concluding drug launches are priced too high. Now, the pain for pharma could spread.

The cost-effectiveness watchdog plans to apply its number crunching to already marketed drugs as well as brand-new ones, but in this case it’ll assess whether particular price hikes are justified by new evidence or benefits. 

ICER has posted a draft protocol (PDF) for its new annual reviews, with the first list to release in October. The group will focus on drugs that demand the most in U.S. healthcare spending, and it’ll probe those that posted significant price hikes over the previous two years. Reviewers will look for changes in evidence over the time period to determine whether data support price increases. It’ll also ask drugmakers for input on their products’ benefits and for other justifications for price increases, such as higher manufacturing costs. 

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RELATED: Controversial U.S. cost watchdog plans to expose ‘unsupported’ price hikes on old drugs 

ICER’s first report will look at up to 13 drugs; the panel conducting the reviews will include members from patient advocacy organizations, pharma companies and representatives from public and private payers. The group first announced its plans to scrutinize price hikes in June.

ICER formed in 2006 and, thanks to funding from the Laura and John Arnold Foundation, started analyzing pharma’s drug launches in 2015. Last year, the group won another $13.9 million in funding from the foundation and plans to put part of that money toward work on drug price hike reviews.

The group hasn’t been popular with pharma, thanks to sharply critical analyses of their new launches. ICER has taken issue with the cost of dozens of new drugs and drug classes, sometimes calling for discounts of one-third or more off a new drug’s list price. It has slammed prices for cancer drugs, PCSK9 cholesterol drugs and more, and companies have hit back by questioning ICER’s motives and review process. For instance, Vertex Pharmaceuticals in May slammed ICER’s assessment of its cystic fibrosis drugs, which said the products would need discounts of up to 77% to be considered cost-effective. 

But over the past year or so, ICER has also worked with some drugmakers to evaluate their launch prices before the new products roll out, and it has even endorsed some prices. The group signed off on pricing for new CGRP migraine drugs, on CAR-T cancer drugs that carry price tags in the hundreds of thousands of dollars and on Roche’s Hemlibra to treat hemophilia. 

RELATED: ‘Sham’ or public interest? ICER suggests 70%-plus discounts on Vertex’s cystic fibrosis drugs 

The new reviews will only add to intense scrutiny on pharma’s pricing, however. After years of hikes and near-constant scrutiny from politicians and the public, pharma companies again increased prices to start 2019. Last week, Rep. Elijah Cummings announced an investigation of 12 companies, and lawmakers have been rolling out proposals in Congress to take on high drug prices.  

Meanwhile, the Trump administration has been working to implement its drug pricing blueprint, which aims to boost competition in drug markets to lower prices as well as to lower costs for patients. 

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