Commentary

Video

Kimberly Westrich's ICER Recommendations to Improve Drug Pricing Data Accuracy

Author(s):

Kimberly Westrich, MA, chief strategy officer of the National Pharmaceutical Council, shares 3 key recommendations to improve the accuracy and quality of drug pricing data.

The Institute for Clinical and Economic Review (ICER) tends to undervalue treatments, so adjusting their methods and incorporating patient assessments is crucial, says Kimberly Westrich, MA, chief strategy officer of the National Pharmaceutical Council.

Transcript

What are your recommendations for ICER to help improve the accuracy of data in their reports on drug pricing?

ICER’s methods and data systematically undervalues treatments, which can have impacts for the incentives for future innovation, and for patient access to those treatments. There are 3 simple recommendations that I would make to ICER that could improve the accuracy of their reports.

The first one is methods, and there's all sorts of things that ICER could do to change their methods, but [there are] 2 that I think are low-hanging fruit at this point. One is dynamic pricing, and dynamic pricing is looking at pricing over the life cycle of a drug. Drugs go generic, which is a benefit that drugs have that most other health care services and treatments don't. Dynamic pricing involves looking at the pricing over the life cycle of the drug, and factoring in that pricing when it goes generic, which is a significant drop in price. That other low-hanging fruit from a method standpoint is looking at the discount rate. ICER’s been using a 3% discount rate, which again, is looking out into the future and discounting future costs and benefits. There's a lot of evidence now that shows that maybe a 2% discount rate would be better, and that's going to dramatically change the results that you get from an ICER value assessment. So that's point number 1, some low-hanging fruit changes in the methods.

Point number 2 is eliminating what ICER is calling it’s shared savings model. This is something that ICER originally introduced for its short-term and transformative therapies. It's not evidence-based, and what it does is it artificially caps the price. So rather than looking at what ICER would recommend as its health benefit price benchmark that comes out of its cost effectiveness analysis model, it caps and comes in at a lower price. It positions this as sharing the savings with society, but what it's really doing is capping the price, and sharing the savings with the payers. That's of concern because it can affect the incentives for future innovation, and again, it can affect patient access. So that's point number 2, to eliminate the shared savings, which has also started to creep into ICER’s regular value assessments, not just the single and short-term transformative therapies, which is a big concern.

The third area is patients themselves. ICER has a patient engagement program that has developed over the years. They went from having an informal program to a formal program, and they have made great strides in engaging with patients and talking with patients, which is fantastic. Where they haven't made great strides is for the feedback that's coming from patients to really be impacting the results of the assessments. We're at an inflection point where ICER could be thinking about, “How do we pull that information from patients into the assessments in a way that it actually has a meaningful impact on the results?” There's an interesting model that's come out from Brett McQueen [Robert Brett McQueen, PhD, associate professor, University of Colorado Skaggs School of Pharmacy and Pharmaceutical Sciences] and others that looks at involving patient feedback as part of the deliberative process in a meaningful way. So those are my recommendations for ICER. Number 1: do some of the method changes that are low-hanging fruit. Number 2: eliminate the shared savings approach. And number 3: involve patient feedback and patient engagement in a way that it meaningfully impacts the results of the assessment.

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