The Institute for Clinical and Economic Review (ICER) is a Boston-based independent nonprofit organization that seeks to place a value on medical care by providing comprehensive clinical and cost-effectiveness analyses of treatments, tests, and procedures.[1]
ICER was founded in about 2005 by physician-researcher Steven D. Pearson, MD, MSc, FRCP.[1] Until 2014 it concentrated on assessing health care costs (rather than evaluating drugs).[2] It evaluates the cost-effectiveness of drugs in a similar way to the UK's NICE,[1][3] and has come under some criticism from the drug industry.[2] ICER has placed a monetary value on several prescription drugs since 2014. Insurers have used those evaluations to justify which drugs are approved or denied.[2][4] The institution is funded by Arnold Ventures LLC (formerly the Laura and John Arnold Foundation), drug makers, insurers, and government grants.[2]
Threshold cost criteria
ICER uses a “value assessment framework” to decide prices for select medical treatments. The framework was last adjusted in 2020. ICER’s framework considers total spending on medical treatments as well as the type of patient who will receive the treatment.[5]
To find total spending, ICER estimates the amount of money available to be spent annually on new drugs and then divides that amount by the number of expected US Food and Drug Administration approvals to set an affordability benchmark.[1]
To determine patient value, ICER uses quality-adjusted life year (QALY) to determine how much a drug can improve the quality of the patient’s life. QALYs determine how much a treatment can improve a patient’s life while subtracting value for any negative side effects. ICER also uses the Equal Value of Life Years Gained (evLYG) to determine if treatment adds years to the patient’s life.[6]
ICER's affordability calculations adjust for drugs targeting prevalent diseases and/or those presenting a significant clinical benefit by setting the threshold at double the available funds divided by the expected number of new drugs (approved by FDA).[1][2]
After discussions in 2016 ICER determined the value of one quality-adjusted life year threshold to be $150,000.[7]
Criticism
Since drugs that combat rarer diseases are typically spread over smaller patient pools, companies will often charge a higher price for the drug in order to recoup their investment. As a result, some critics argue ICER tends to report that these rare disease drugs are not worth the high cost listed for them, without taking into account the input of physicians, patients, or other societal factors when determining a drug’s value. According to the Pioneer Institute, “A recent ICER review of two breakthrough treatments for Spinal Muscular Atrophy (SMA) concluded that neither therapy met ‘traditional cost-effectiveness thresholds.’”
ICER has been criticized for being an “arbitrary, nontransparent, non-peer-reviewed report” which can determine whether a patient receives a treatment recommended by a doctor.[8]
ICER’s use of the QALY has left some concerned that less efficient drugs will be prioritized. Oxford University’s Quarterly Journal of Medicine stated: “If a new treatment is less effective than standard therapy, but costs much less there will be a cost per QALY benefit in adopting it.” [9]
ICER is also seen[by whom?] as a watchdog for drug price hikes that are not backed by clinical evidence. ICER released a study in 2019 that reported, “In 2017 and 2018, out of nine identified drugs that had substantial price increases on top of already high current spending, seven drugs had no new important evidence to support their price increases. The net price increases on these seven drugs alone cost American insurers and patients an additional $4.8 billion over two years.”
QALY
QALY stands for Quality-Adjusted Life Year and it is one measurement system used by ICER to determine the value of a drug. One QALY is equal to one perfect year of health. Critics of the QALY argue that the measurement is too subjective to be used broadly. Critics also claim QALYs can be ableist or ageist because disabled or elderly individuals cannot have one year of perfect health based on its criteria.[9] Some critics have sought to ban QALYs as a metric. On January 31, 2023, HR 485 was introduced, which would prohibit the use of QALYs.[10] Currently QALYs are subject to a limited ban in the Medicare program, this bill would expand the ban to all federal programs.[11]Proponents of the system agree that it may be imperfect, but consider it to be the best available measurement system for quality and quantity of life.
evLYG
The Equal Value of Life Years Gained, or evLYG, is a measurement system proposed by ICER which measures how much a medical treatment can extend the life of the patient. The evLYG measures the cost of a treatment per life year gained regardless of the quality of life provided by that treatment.[12] The metric was adopted in response to criticism that the QALY metric was too narrow, and that its focus on quality of life would lead to discrimination against the elderly and disabled.
Critics of the evLYG metric argue that the metric is too broad and doesn't account for nuance in patient conditions. Specifically, evLYG relies on generic patient reported outcomes when dealing with specific and unique situations.[13] Critics also argue that the evLYG metric ignores additional dimensions of value, such as how a specific treatment may not add to a person's lifespan but could reduce the overall burden on the healthcare system, saving lives elsewhere. [14]
Drugs evaluated - reports issued
It issued a draft report that said Sovaldi wasn’t worth the list price of about $84,000 a year.[2]
ICER's governing boards include various health experts, including several insurance executives.
Governance Board: Ellen Andrews, PhD, Executive Director, Connecticut Health Policy Project Carmella Bocchino, RN, MBA, President and CEO, CRB Strategies, LLC Wendy Everett, ScD, Special Advisor, NEHI Ron Pollack, JD, Chair Emeritus, Families USA Murray Ross, PhD (Chair), Vice President and Director, Kaiser Institute for Health Policy Kaiser Permanente Lewis Sandy, MD, Executive Vice President, Clinical Advancement, UnitedHealth Group Mark Skinner, JD, President and CEO, Institute for Policy Advancement Anya Rader Wallack, PhD, Associate Director, Center for Evidence Synthesis in Health at Brown University
Advisory Board: Robert W. Dubois, MD, PhD, Chief Science Officer, National Pharmaceutical Council Jon Gavras, MD, Senior Vice President, Chief Medical Officer, Prime Therapeutics Colleen Haines, RPh, Chief Clinical Officer, IngenioRx, a subsidiary of Anthem Vivian Herrera, Executive Director, Head Immunology & Dermatology and Medical Access, US Health Economics & Outcomes Research, Novartis Pharmaceuticals Corporation Kjel A. Johnson, PharmD, Vice President, Specialty Strategy and Client Solutions, CVS Health Ron Preblick, PharmD, MPH, Sr. Director, Global Business Partner, Rare Blood Disorders, Sanofi Andreas Kuznik, Senior Director, Health Economics and Outcomes Research, Regeneron Pharmaceuticals Chris Leibman, PharmD, Senior Vice President, Value and Access, Biogen Dave Macarios, MBA, MSc, Vice President, Global Evidence and Value Development, Allergan Martin Marciniak, PhD, Vice President, US Medical Affairs, Customer Engagement, Value, Evidence, and Outcomes, GlaxoSmithKline Kendra Martello, JD, Senior Director, Public Policy, Government Affairs & Public Policy, Mallinckrodt Pharmaceuticals Michael Sherman, MD, MBA, MS, Senior Vice President and Chief Medical Officer, Harvard Pilgrim Health Care David R. Strutton, PhD, MPH, Vice President, Global Pharmaceuticals and Policy Evidence Research, Center for Observational and Real-World Evidence (CORE), Merck & Co., Inc. Sean D. Sullivan, PhD, MSc, Professor and Dean, University of Washington School of Pharmacy Marcus Thygeson, MD, Chief Health Officer, Bind Benefits John Watkins, PharmD, MPH, BCPS, Pharmacy Manager, Formulary Development, Premera Blue Cross David Weinstock, MD, Professor of Medicine and Pediatrics, Harvard Medical School and Dana-Farber Cancer Institute
Clinical trials are prospective biomedical or behavioral research studies on human participants designed to answer specific questions about biomedical or behavioral interventions, including new treatments and known interventions that warrant further study and comparison. Clinical trials generate data on dosage, safety and efficacy. They are conducted only after they have received health authority/ethics committee approval in the country where approval of the therapy is sought. These authorities are responsible for vetting the risk/benefit ratio of the trial—their approval does not mean the therapy is 'safe' or effective, only that the trial may be conducted.
The incremental cost-effectiveness ratio (ICER) is a statistic used in cost-effectiveness analysis to summarise the cost-effectiveness of a health care intervention. It is defined by the difference in cost between two possible interventions, divided by the difference in their effect. It represents the average incremental cost associated with 1 additional unit of the measure of effect. The ICER can be estimated as:
Prescription drug list prices in the United States continually are among the highest in the world. The high cost of prescription drugs became a major topic of discussion in the 21st century, leading up to the American health care reform debate of 2009, and received renewed attention in 2015. One major reason for high prescription drug prices in the United States relative to other countries is the inability of government-granted monopolies in the American health care sector to use their bargaining power to negotiate lower prices, and the American payer ends up subsidizing the world's R&D spending on drugs.
An orphan drug is a pharmaceutical agent that is developed to treat certain rare medical conditions. An orphan drug would not be profitable to produce without government assistance, due to the small population of patients affected by the conditions. The conditions that orphan drugs are used to treat are referred to as orphan diseases. The assignment of orphan status to a disease and to drugs developed to treat it is a matter of public policy that depends on the legislation of the country.
The National Institute for Health and Care Excellence (NICE) is an executive non-departmental public body, in England, of the Department of Health and Social Care, that publishes guidelines in four areas:
Frank Edward Young was an American physician who served as Commissioner of Food and Drugs from 1984 to 1989 and later as a deputy assistant secretary in the United States Department of Health and Human Services. In 2013 he joined Braeburn Pharmaceuticals as executive vice president, clinical and regulatory affairs. In 2018, he became the executive vice president of clinical and regulatory affairs at TissueTech Inc.
The University of Tennessee Health Science Center (UTHSC) is a public medical school in Memphis, Tennessee. It includes the Colleges of Health Professions, Dentistry, Graduate Health Sciences, Medicine, Nursing, and Pharmacy. Since 1911, the University of Tennessee Health Science Center has educated nearly 57,000 health care professionals. As of 2010, U.S. News & World Report ranked the College of Pharmacy 17th among American pharmacy schools.
Cost–utility analysis (CUA) is a form of economic analysis used to guide procurement decisions. The most common and well-known application of this analysis is in pharmacoeconomics, especially health technology assessment (HTA).
The quality-adjusted life year (QALY) is a generic measure of disease burden, including both the quality and the quantity of life lived. It is used in economic evaluation to assess the value of medical interventions. One QALY equates to one year in perfect health. QALY scores range from 1 to 0 (dead). QALYs can be used to inform health insurance coverage determinations, treatment decisions, to evaluate programs, and to set priorities for future programs.
Disability-adjusted life years (DALYs) are a measure of overall disease burden, expressed as the number of years lost due to ill-health, disability, or early death. It was developed in the 1990s as a way of comparing the overall health and life expectancy of different countries.
Pharmacoeconomics refers to the scientific discipline that compares the value of one pharmaceutical drug or drug therapy to another. It is a sub-discipline of health economics. A pharmacoeconomic study evaluates the cost and effects of a pharmaceutical product. Pharmacoeconomic studies serve to guide optimal healthcare resource allocation, in a standardized and scientifically grounded manner.
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Pharmaceutical policy is a branch of health policy that deals with the development, provision and use of medications within a health care system. It embraces drugs, biologics, vaccines and natural health products.
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ISPOR—The Professional Society for Health Economics and Outcomes Research, also known as ISPOR is a global, nonprofit 501(c)(3) public organization for educational and scientific purposes, as defined by the United States Internal Revenue Service.
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The Equal Value of Life Years Gained or evLYG is a generic measure used to determine how much a medical treatment can extend the life of the patient. Unlike other healthcare metrics, the evLYG does not consider the quality of life for the patient; it exclusively considers the length of life. It is used in economic evaluation to determine the added time a treatment may give a patient. Critics argue the evLYG measurement is flawed because it values a medication based solely on the added years of life. A higher priced drug that both extends life and adds two years of life receives the same evLYG score as a lower priced drug that adds two years but does not improve life.
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