ICER's 'Unsupported Price Increases' Report Misses the Mark. Again.

Programming Note: No Curve tomorrow unless there’s news [knocks on wood]. Back Monday. Let it snow.

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I feel like a broken record here, but ICER just dropped its annual “Unsupported Price Increase Report,” and it’s just not useful. (For a sampling of my reactions over the years: Here is me whining last year. Here’s a little rant from 2021.) 

I respect what ICER is trying to do. Understanding when price hikes are questionable is a good and noble goal. It’s just really hard to do in a way that’s methodologically sound. 

Almost every piece of this effort -- from the way that net prices are calculated to ICER’s determination of what does and does not justify a price increase -- is just too wobbly to serve as a foundation for the conclusions that ICER wants to draw. 

You can read the report, along with the five medicines that ICER is targeting this year, but I’m not sure that it says anything meaningful. 

Each year, a different flaw in the methodology emerges to cast doubt over the whole enterprise. This year it’s the inflation rate that ICER uses as a baseline. The CPI-Medical -- one of the government’s measures of health inflation -- was close to zero last year, suggesting that there was no room for “cost of living” adjustments in drug price increases. 

Of course, CPI-M is only one tool that could be used, and it’s tough for drugmakers to respond in real-time to inflation numbers. ICER builds in a little bit of a fudge, but that was hardly enough to account for a historically weird set of CPI-M numbers. There are probably ways around that problem. Sanofi used to make decisions based on the projected rate of medical inflation (using more-representative National Health Expenditure data instead of CPI-M numbers), but ICER has stuck to its guns. 

NPC, in comments to the STAT story, suggested that if the overall (i.e. non-medical) rate of inflation has been used, the results would have shown that even ICER’s fiendish five medicines would have appeared to be deflationary. 

(Indeed, the STAT piece quotes NPC’s Kimberly Westrich at length, so it’s worth the click.)

I’m sure you all didn’t open the newsletter to read paragraph after paragraph of inflation analysis, and my hope -- and this is my hope every year -- is that this is the last time I have to talk about the ICER UPI report and all of its failings**.

Again, I get where ICER is coming from. I appreciate the group’s hustle here. I like the debate that is spawned around their individual drug assessments. But this particular project just feels unsalvagable. 

** tbh, I didn’t even get close to “all of its failings.” Perhaps the largest one is that ICER doesn’t bother to figure out if increased prices are cost-effective, which is probably the important point.

• IQVIA just pushed out another one of its must-read reports, this one on the difference between drug approvals in the United States, the EU, and Japan. Turns out that between 2019 and 2022, 51 meds were approved in the United States but not Europe. About 33% of all meds that get the FDA green light don’t have EU clearance within two years. 

• I linked yesterday to the effort by a congressional odd couple -- Josh Hawley and Liz Warren -- to team up behind a bill that would require PBMs to sell off their pharmacies. But STAT’s cynical take is probably the most important read, laying out the case for why this remains a longshot. On the flip side, we’re having a serious conversation about breaking up Big Health, which is pretty amazing. 

• Don’t forget! There are still IRA lawsuits knocking around the courts, and we haven’t seen a lot of attention there. But one of the more interesting appeals belongs to Novo Nordisk, which is calling into question not only the constitutionality of the law but also some of the fast-and-loose rulemaking. The government’s brief in that case is due on Monday. 

Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations. 

To learn more about how Reid Strategic can help you, email Brian Reid at [email protected].