The Institute for Clinical and Economic Review (ICER) today published its latest report on Unsupported Price Increases (UPI) of prescription drugs in the United States. Among the top drugs with price increases in 2019 that had substantial effects on US spending, ICER determined that seven of 10 lacked adequate new evidence to demonstrate a substantial clinical benefit that was not yet previously known. The 2019 unsupported price increases on these seven treatments, even after pharmaceutical rebates and other concessions, cost the US health system an additional $1.2 billion beyond what would have been spent if their net prices had remained flat.
“Thanks in part to increased public scrutiny on annual price hikes, higher pharmaceutical rebates, and an uptick in generic drug utilization, average net prices on brand-name drugs have remained relatively stable in the US over the past two years,” said David Rind, MD, ICER’s Chief Medical Officer. “However, there remain many high-cost brand drugs that continue to experience significant annual price hikes, even after accounting for their rebates. Even more concerning, several of these treatments have been on the market for many years, with scant evidence that they are any more effective than we understood them to be years ago when they cost far less. As state lawmakers continue to pursue legislation that aims to limit drug-price increases when there is no clinical rationale, we hope our UPI reports continue to provide an explicit and independent approach to evaluate the evidence. If new data emerge that show a treatment may be more beneficial than what was previously understood, perhaps some level of price increase is warranted. For seven of the ten high-cost drugs we profiled in this year’s report, however, we found that the price increases lacked such justification.”
Methodology and Key Findings
Consistent with their protocol announced in June 2020, ICER identified a list of prescription drugs that met each of the following criteria:
- Were among the top 100 drugs by 2019 US sales revenue;
- Experienced WAC (list) price increases that were more than twice as high as the rate of medical inflation between 2018 and 2019;
- Even after rebates and other concessions, experienced net price increases that placed them at the top of the list of drugs; and
- After net price increases were vetted with manufacturers, were found to be the top 10 drugs whose price increases — as opposed to volume increases — contributed to the largest increase in US spending. (Of note, Astellas provided information after the report deadline for vetting prices that the net price increase of Xtandi® would have placed it in position 11 rather than position 10; Xtandi was kept in the evaluation.)
In addition, our protocol allowed for the public to recommend up to three additional drugs of concern to be evaluated even if they do not meet all of these criteria; this public input process led Enbrel® (etanercept, Amgen) to be included within ICER’s evaluation.
The three drugs assessed that did have new important positive clinical evidence were Entresto® (sacubitril/valsartan, Novartis), Entyvio® (vedolizumab, Takeda), and Xtandi® (enzalutamide, Astellas). Importantly, however, ICER’s determination that new evidence exists for these three treatments should not be interpreted to mean that the new evidence justifies the level of price increase; a full cost-effectiveness assessment was not conducted.
Comparison to Previous Unsupported Price Increases
In October 2019, ICER published our first UPI report, which identified seven specific drugs that experienced unsupported price increases that cost American insurers and patients an additional $4.8 billion across 2017 and 2018. When comparing these two reports, readers should note that the first UPI report calculated price and cost increases over a two-year period, while this latest report is focused solely on the single year of 2019.
Humira and Tecfidera are the only two therapies that had unsupported price increases significant enough to qualify for both reports.
A Note on Insulin Price Increases
ICER received public comments from state policymakers suggesting that insulin be evaluated in the current UPI Report, and we have included a section on these drugs. Seven of the top 10 insulin products each had more than $500 million in US revenue in 2019. However, while some of these products experienced increases in their list prices during 2019, after rebates the net price paid by the US health system on nine of these products was actually lower in 2019 than in 2018. While the overall decrease in net spending may help moderate rising insurance premiums, the ongoing increase in list prices continues to present real affordability concerns for patients who are exposed to the unrebated price – particularly for those individuals without insurance, but also for insured individuals who have not yet reached their deductible or whose insurance plans require that members pay a percentage of a drug’s list price as coinsurance.
The Institute for Clinical and Economic Review (ICER) is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. ICER’s reports include evidence-based calculations of prices for new drugs that accurately reflect the degree of improvement expected in long-term patient outcomes, while also highlighting price levels that might contribute to unaffordable short-term cost growth for the overall health care system. For more information about ICER, please visit ICER’s website.