A project announced Tuesday will compare the cost and benefit of costly drugs.
The Institute for Clinical and Economic Review will begin releasing reports that will compare clinical effectiveness of drugs, compare prices and their potential impact on the U.S. healthcare system and economy. The agency will then set a value-based benchmark for pricing.
The ICER project is funded by a $5.2 million grant from the Laura and John Arnold Foundation, a private foundation that encourages evidence-based and multidisciplinary approaches to address challenges in various sectors, including education, policy and healthcare.
The reports will reference how prices are directly linked to the drugs' ability to improve the health of patients.
“What we're trying to do is create a transparent way to look at the relationship of the price with the value the drug brings to patients,” said Dr. Steven Pearson, president of the Institute for Clinical and Economic Review, “Drug prices have been trending upward quite dramatically in recent years. But the idea that insurers are just going to cover any new drug, at any price, whether or not there is benefit, is over.”
A recent report from pharmacy benefits manager Express Scripts highlights just how costly treatments can be for patients. The number of individuals in the U.S. taking at least $100,000 worth of prescription drugs annually tripled from 2013 to 2014 and the cost of medications for diseases like hepatitis C and cancer were among the main factors driving the increase, the report found.
In June, the American Society of Clinical Oncology released drug comparisons for first-line treatments of four different cancers. It found, for example, two combination therapies for metastatic non-small cell lung cancer had no differences in clinical benefit or toxicity, but the newer therapy cost physicians nearly $8,400 more to acquire. ASCO plans to offer reports that compare additional cancer-types in coming years.
The first ICER evaluations- which will focus on PCSK9 inhibitors for cholesterol and a new Novartis heart failure drug called Entresto – are expected the first week of September. Pearson says future evaluations will be closely timed with new therapies that are in the pipeline for approval for by the Food and Drug Administration, as insurers and others must make decisions about clinical use and coverage relatively soon after approval.
That timing is key, according to Dr. Daniel Goldstein, a fellow in the hematology and medical oncology department at the Winship Cancer Institute of Emory University in Atlanta. His recent presentation at the clinical oncology conference in Chicago used a similar framework to establish a value-based price for a lung cancer drug that is pending FDA approval.
Once a drug is approved the price is essentially set, and it is then potentially more difficult to adjust to a value-based price; another opportunity is to perform an economic analysis while early phase clinical studies are ongoing, offering a preliminary look at whether or not it is worth moving forward with the next phase of research, he said.