In recent years, the drug pricing landscape has been changing in positive ways, but that message, unfortunately, hasn’t reached certain audiences. According to a Drug Channels analysis of SSR Health data, growth in drug prices slowed significantly over the past five years, with net prices declining by -2.2% in 2020 alone. Additionally, while prices have fallen, utilization has increased, which means that more patients are using more medicines, which increases overall health spending.
Given those declines in prices, the Institute for Clinical and Economic Review’s second report on drug pricing – focusing on a hand-picked, narrow group of medicines rather than the overall landscape -- is an unnecessary and misleading exercise. ICER used incomplete evidence and inadequate analyses, creating a flawed report that should not be relied on by any policy- or decision-maker interested in developing sound, evidence-based drug policy. Poor information only leads to poor decisions, which can greatly harm patients and the health care system.
ICER ignored previous criticisms and has not corrected the same methodologic flaws that marred its first analysis. It still admits 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.”
“...[I]f it cannot conduct a formal economic review, then ICER cannot accurately assess whether the price of a therapy was fair—or even underpriced--in the first place.
“In most cases, ICER also did not conduct broader searches for relevant studies and clinical information about the handful of medicines it chose to review, limiting the types of evidence included in its analysis. 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.
“The ICER report is a snapshot in time, focusing only on individual therapies in a two-year period. Instead, the report should provide a longer view of how prices, costs and health spending fluctuate over years. Peer-reviewed studies have shown that therapies can be cost-effective over the long-term, particularly if they improve a patient’s quality of life and reduce hospital stays.”
In its new report, ICER again ignored relevant economic information – the kind used by payers in their decision-making – to paint an unflattering and inaccurate picture of industry. Health researchers have found that over time, some medicines reduced health system spending, such as through their route of administration or a reduced need for doctor visits. This type of economic information, viewed as important by most health care payers, was not considered.
To be clear, there are many drivers of health care spending, and we are not minimizing the role of pharmaceuticals in those numbers. But as we’ve noted before, “finger-pointing and micro-focusing on one aspect of health care are not conducive to having a broader dialogue or getting to the root of health spending issues.”
Going forward, we need to ask critical questions and have a broader dialogue before citing flawed reports like ICER’s. Flawed information can lead to flawed policy decisions, and that won’t benefit patients or society. This report may get headlines -- it won’t, however, create a productive dialogue.