Creating a Dialogue or Just Playing for Headlines? Third Time Isn’t the Charm for ICER’s Pricing Report

In recent years, we’ve seen some positive trends in the drug pricing environment:

• Data from the federal government showed that prices for prescription drugs have continued to decline for the second consecutive year in a row. Despite an uptake in total retail prescription drug spending, drug prices decreased by 0.4% in 2019 after falling by 1.0% in 2018.
• Recent commercial pharmacy benefit management (PBM) drug spending reports showed that drug spending continues to grow more slowly than every other part of the U.S. health care system.
• An IQVIA report noted that net manufacturer prices for brand medicines — the cost of medicines after all discounts and rebates have been paid — declined 2.9% in 2020, continuing a downward trend over the past five years.
• A Drug Channels analysis on pharmaceutical manufacturers’ publicly reported pricing trends found: “Consistent with our previous analyses, rebates and discounts reduced the selling prices of brand-name drugs to less than half of their list prices. What’s more, net drug prices have declined for the past four years.”

Although the evidence is clear that drug prices and spending are slowing or trending downward, that’s not the message the Institute for Clinical and Economic Review (ICER) wants to convey. In its latest report on drug pricing, ICER focused on a narrowly selected group of medicines rather than the overall landscape, and then relied on incomplete evidence and inadequate analyses to fit the desired narrative.

In ICER’s third report looking at which drugs didn’t meet its restrictive criteria, ICER changed its own rules and moved the methodologic goal posts. Without this change, ICER would have been hard pressed to find enough drugs to criticize in its report. Specifically, ICER expanded its search of medicines from the top 100 drugs by U.S. sales revenue to the top 250 drugs, and it lowered the definition of an inflation threshold from “twice medical consumer price index (CPI)” to “medical CPI plus 2%.” 

What’s worse is that ICER hasn’t learned from past mistakes and repeated the same methodologic flaws that marred its first two analyses. It admitted that its analysis is incomplete and that it cannot conduct a formal review of therapies and their prices: “ICER does not currently have the capacity to perform full economic analyses in conjunction with the evaluation of clinical evidence for the drugs in its UPI Reports.” Without a formal economic review, ICER cannot accurately assess or report on whether the price of a therapy was fair — or even underpriced — in the first place.

Those aren’t the only problems with this biased report. As we’ve shared in previous criticisms of ICER’s reports:

• While ICER set an unreasonably high bar for the types of evidence it would consider, it set a low bar for the pricing data it utilized.
• ICER only considered data during a two-year period, which ignores the effects of medicines on patients’ well-being over a longer period of time, as well as fluctuations in costs and health spending.
• ICER ignored relevant economic information — the kind used by payers in their decision-making.

Selectively picking the data to arrive at a convenient narrative — like ICER does in this report — should not be mistaken for good research. Even more important, reports like this one, with significant flaws, should not be used to inform health care policy decisions. Flawed data only results in flawed policies. This report may get headlines — it won’t, however, create a productive dialogue that benefits patients or our health care system.