Kelly: The Institute for Clinical and Economic Review (ICER) has emerged as a leading voice in evaluating healthcare technologies on their clinical and economic value. Despite ICER’s recommendations being advisory, multiple surveys show half of the payers draw upon ICER findings in rebate and pricing discussions with manufacturers. Do you have some high-level advice for companies on how to prepare for an ICER review?
The Background
Steve: Yes, I do. For those that aren’t familiar with the Institute for Clinical and Economic Review, also known as ICER (and not to be confused with “Incremental Cost-Effectiveness Ratio”), this is a private, non-profit research organization that conducts various types of analysis, including economic evaluations. To inform discussions in the healthcare sector, their mantra or their mission (from their website) is “Fair Pricing, Fair Access, Future Innovation.” I think most would concur that's a reasonable and noble objective. Achieving that, however, is a difficult assignment for them and all health economic researchers.
ICER has been in existence for about 15 years, but they've only recently--within the last five years or so--come to the forefront of the pricing and reimbursement debate in the US, namely with the publication of some of their research assessments, which raised some controversy and consternation from the bio-pharmaceutical industry and some associated criticisms regarding the value framework that they use for their evaluations.
As for the term “value framework,” there isn't, as far as I'm aware, a standardized definition. I think that, in this context, I would define a value framework as “a set of concepts, elements, and analyses that are all taken together to aid in evaluating a medical intervention or treatment.” For a little bit of historical context, in the US for decades, there's been a void for an entity like ICER that can provide this type of service and analysis. For the most part, that niche has primarily been filled by academic researchers, but more recently, ICER and other value frameworks, such as those developed by ASCO or NCCN to name two, have attempted to fill the vacuum that exists for this type of information.
Many years ago, it appeared that AHRQ, the Agency for Healthcare Research and Quality, would take a lead role in spearheading the development of this type of data, but that hasn't materialized. And as recently as 2016, an Avalere survey suggested that few, if any, payers were seriously considering information from these value frameworks. But as you mentioned, what a difference a few years makes. The evidence does seem to suggest that a shift has been occurring in the last handful of years in which ICER's revised framework is gaining more traction, and being considered much more closely by payers.
Advice on Preparing for ICER Reviews
I assume that the ICER framework, or something similar, is here to stay and therefore, how do I advise clients on the impact of an ICER review and what they can do to prepare for such an evaluation? With so much about technology assessment, costs, pricing, reimbursement, manufacturer rebates, etc. being so opaque and/or discussed behind closed doors, I give credit to ICER for at least making their process quite transparent by comparison to what we have come to expect.
The ICER value framework is well-documented and has undergone revisions in response to valid critiques, most recently in 2020, but there are plans to revise it again in the next couple years. So a manufacturer should have a relatively clear understanding of how their product will be evaluated in an ICER review, if they've done some homework. Given what’s at stake for a manufacturer, a ‘do-nothing’ approach in anticipation of or in response to an ICER review of its product is not advisable and leaves a manufacturer very vulnerable. More realistically, I suggest that, at a minimum, clients have a designee or preferably a team to stay abreast of an ongoing ICER review and be prepared to be active and consultative throughout the process.
An ICER assessment will touch on many different domains, including clinical, of course, but also patient-reported outcomes or quality of life if they're relevant, economics, etc. So a multidisciplinary team, often including consultants if the internal expertise is not readily available, which is not always is, would be ideal. ICER does give manufacturers advance notice of its plans to assess a particular treatment. So it should not catch a manufacturer completely unaware, and although the FDA approves dozens of new products each year, and ICER can't possibly evaluate them all nor would there be cause to do so, I suspect that manufacturers have an inkling of whether their asset may appear on ICER's radar screen as they are developing the product.
Because ICER's evaluation process is intended to at least be quasi-collaborative with various stakeholders, including the public and manufacturers, I advise clients to be prepared to effectively participate. But the problem with only having a team to stay abreast of the process is it leaves the manufacturer on the back foot and in a reactive stance. In my opinion, it is better to have done some of the foundational homework in advance, especially for a manufacturer who suspects that they'll have an asset coming to market that has a reasonable chance of being the subject of an ICER review.
Therefore, my third and preferred option is that manufacturers that believe that they might be facing an ICER review in the years ahead, is to conduct some of that relevant research in advance. As I've mentioned, there are budget constraints for all manufacturers and you need to weigh and balance the use of those finite resources. But having at least performed the basic research and to have asked and answered some of the fundamental questions will pay dividends later. For example, I recommend that clients give some thought to what other relevant treatment comparators ICER likely would include in a comparative effectiveness evaluation. How does their new asset stack up against those alternatives? This may not always be easily answerable given the potential lack of head-to-head trials across numerous competitors during a clinical development program. Manufacturers probably won't have randomized controlled trial data versus all the potential comparators. Therefore, they need to consider whether they require meta-analyses or other research techniques to get a sense of how the asset might perform against potential comparators that would be included in an ICER review.
Manufacturers should have thought through some of the key differentiating advantages that could be included in a cost-effectiveness analysis or budget impact analysis, both of which are a part of ICER's value framework, and that the manufacturer can demonstrate would shed a favorable light on their asset. That could be informed by research they've already completed, possibly conducted in conjunction with a clinical trial. If they've developed that evidence, it certainly gives more credibility if the manufacturer wants to rebut or suggest that the ICER review is not taking into account all the relevant information. They need to be able to come to the table having done their research and to be prepared to bring out those things that they think are advantageous for their product. Finally, manufacturers should have at least taken a stab at developing a full cost-effectiveness analysis and budget impact analysis, or at least made an attempt at an early kind of conceptual framework and model, especially if they believe that eventually they may be subject to an ICER review. That will help place them in a more proactive stance when ICER or another evaluator comes knocking at their door. That more comprehensive option I think is always the best one.
For more reading on the topic of ICER and other value and pricing considerations, I would recommend a recent book by Neumann, Cohen, and Ollendorf called ”The Right Price: A Value-Based Prescription for Drug Costs.”
About Steve Duff
I have spent nearly 25 years providing health economic and reimbursement consulting services to pharmaceutical, biotechnology, medical device, and diagnostic companies. I provide to my clients a unique combination of health economics expertise with clinical knowledge and product development experience gained through various positions in the consulting and pharmaceutical industries.
Prior to founding my own consulting practice, I spent eight years as a principal consultant with Covance Health Economics and Outcomes Services where I focused on medical technology assessment, economic modeling, and development of dossiers, manuscripts, and strategic plans. My clients ranged from small start-ups to Fortune 500 companies with technologies in various stages of development and commercialization.
In addition to my consulting experience, I also have held various positions in pharmaceutical research and clinical development. I spent seven years in research and development at Kendall McGaw and Allergan, primarily in the field of pharmacokinetics.
Over the course of my 25-year career providing health economics consulting services, I have been privileged to assist hundreds of clients achieve their market access and commercialization goals. Examples of these accomplishments include:
Conceptualization and programming of sales and pricing models for dozens of pharmaceutical, device, and diagnostic products to inform successful market adoption strategies;
Development and publication of the first cost-utility analysis of robotic surgery and six comparator treatments of prostate cancer informed by an extensive literature review and synthesis;
Supporting a cutting-edge ophthalmology product for over a decade with budget impact and cost-effectiveness models, dossiers, publications, and literature reviews across five approved indications; and
Development of several economic models used to support successful listing recommendations by Australia’s Pharmaceutical Benefits Advisory Committee (PBAC).
I have a Bachelor’s Degree in Biology from the University of California, San Diego and a Master’s Degree in Health Policy and Management from the Harvard University School of Public Health.