Not widely known outside of drug pricing policy and business experts, the Boston-based nonprofit organization known as the Institute for Clinical and Economic Review (ICER) pursues the improvement of healthcare value by offering comprehensive, clinical and cost-effectiveness analyses of drugs, tests and procedures. It has become in a way an organization that established a “value-based price point” for the cost effectiveness of drugs in America much like is done by the United Kingdom’s NICE. The organization has been critiqued by the pharmaceutical industry (“Pharma”) for omitting key factors in establishing rational baseline drug pricing. Recently, ICER published its latest report on Unsupported Price Increases (UPI) of prescription drugs in the United States. Covering the top drug price increases in America in 2019 that material impacts consumer spending, ICER determined that seven of 10 of the price increases lacked adequate new evidence to demonstrate a substantial clinical benefit that was not yet previously known. These 7 price increases alone, according to ICER, cost the U.S. health system an additional $1.2 billion beyond what would have been spent if their prices had remained flat. ICER does report that due to a confluence of factors (public scrutiny of pharma pricing, higher pharmaceutical rebates and increase in generic drug use), generally branded drug prices remained “…relatively stable in the U.S. over the past two years,” reported ICER’s Chief Medical Officer David Rind, MD.
What are ICER’s Key Findings in this latest report?
ICER identified a list of prescription drugs that involved review of the top 100 drugs by 2019 sales revenue. Based on a number of considerations (rebates and other concessions, price increases, etc.) they report on the top 10 drugs whose price increases—as opposed to volume increases—contributed to the largest increase in U.S. spending. They are included in the table below:
|Drug||2018-19 WAC Increase||2018-19 Net price Increase*||Boost in U.S. Drug Spending Due to Price Hike ($millions)|
|Enbrel® (etanercept, Amgen)||5.4%||8.9%||$403|
|Invega Sustenna®/ Invega Trinza® (paliperidone palmitate, Janssen)||6.8%||10.7%||$203|
|Xifaxan® (rifaximin, Salix)||8.4%||13.3%||$173|
|Orencia® (abatacept, Bristol-Myers Squibb)||6.0%||7.4%||$145|
|Tecfidera® (dimethyl fumarate, Biogen)||6.0%||3.7%||$118|
|Humira® (adalimumab, AbbVie)||6.2%||2.0%||$66|
|Vimpat® (lacosamide, UCB)||7.0%||5.6%||$58|
*While potentially surprising to industry observers, it is possible for net-price increases to outpace list-price increases based on a variety of factors, including relative reductions in 1) rebates to payers, 2) fees to wholesalers and others in the supply chain, and/or 3) patient assistance. Each of the manufacturers listed above had an opportunity to volunteer corrections to the ICER estimated net-price changes, and several of them did report ICER in their recent press release.
Insulin Pricing Comment
ICER shared some updates on general insulin pricing trends, given state policymaker interest in including that treatment for diabetes in the current report. They note that seven of the top 10 insulin products each had over $500 million in U.S. revenue in 2019. Although some of these products’ price point actually increased during 2019, post rebates the net price point paid by the U.S. health system on nine of these products was actually lower in 2019 than 2018.
TrialSite reported over the last two years growing concerns about pharma insulin price increases. ICER notes that although overall decreases in net spending on insulin products may serve to moderate rising insurance premiums, the ongoing increase in list prices of such drugs continues to present significant affordability concerns from patients who are exposed to the unrebated price—especially individuals without insurance, but also insured individuals who have not yet reached their deductible or whose insurance plans require than their members pay a percentage of a drug’s list price as coinsurance.