ICER’s Dramatic Shift from QALY to Pharma Profit Metrics Could Have a Chilling Effect on Innovation

The Institute for Clinical and Economic Review (ICER) has been very responsive to the current public health pandemic, from adjusting their review timelines to assessing COVID-19 impact on drug pricing and patient access. Within a few days of Gilead’s remdesivir gaining emergency approval by the U.S. Food and Drug Administration (FDA), ICER has published an analysis on alternative pricing models for the therapy and other potential treatments for COVID-19. [See full report here]

In its preliminary analysis, ICER had the objective to estimate a price for remdesivir in the treatment of COVID-19 that would represent a “cost recovery” approach which assumes that a set price should compensate the manufacturer for the costs of production without additional profit. The conceptual elements of the ICER model for a cost recovery pricing estimate include: 1) the marginal cost of producing the next course of remdesivir therapy; 2) research and development costs provided by the manufacturer; 3) research and development costs provided by the federal government; and 4) additional profits beyond the marginal cost.

It is important to note that the cost recovery pricing estimate does not include the remdesivir administration-related costs to which the manufacturer may expand their pricing framework to include societal elements such as government investments in research and development as well as societal proceeds.

Many may argue that ICER’s cost recovery model is making the case that pharmaceutical companies should not substantially profit from innovations that have significant societal impact, and this framework might affect how ICER assesses other therapies and its price recommendation. Understanding how ICER has evolved and how it is shifting its value framework is key to ensure manufacturers are prepared and aligned to address a review of their product and/or therapy category.

For biopharmaceuticals working diligently to address the current public health crisis or those that may be on the list for an ICER review, our team of experts can support them to develop a strategically aligned response. To learn how, fill out the form below to meet with our experts.

 

HTANAVIGATOR by EVERSANA™

The smart application that gives you everything you need to learn, prepare, and respond to an ICER review.

No matter where you are in the journey, HTANAVIGATOR gives you actionable, sharable information that is easily accessible and constantly updated to help inform a comprehensive and strategically-aligned organizational response to an ICER assessment.

 

About EVERSANA™

EVERSANA is the leading independent provider of global services to the life science industry. The company’s integrated solutions are rooted in the patient experience and span all stages of the product life cycle to deliver long-term, sustainable value for patients, prescribers, channel partners and payers.

The company serves more than 500 organizations, including innovative start-ups and established pharmaceutical companies to advance life science services for a healthier world. To learn more about EVERSANA, visit eversana.com