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.
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