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US insurers can peg access to ICER value reviews

Latest step in US pricing evolution

US pharmacy benefit manager CVS Caremark is to start using cost-effectiveness analyses by the Institute for Clinical and Economic Review (ICER) to decide if drugs should be excluded from its plans.

In a just-published white paper entitled Current and new approaches to making drugs more affordable, CVS says its clients will be able to exclude any drug launched at a cost of more than $100,000 per quality-adjusted life year (QALY) based on ICER’s calculations unless they have breakthrough status from the FDA.

The adoption of ICER guidance is part of an array of approaches taken to limit drug costs by the PBM, along with encouraging the use of generic substitution for brandname drugs, using prior authorisation for some medicines to make sure prescribing is in line with evidence-based rules, and encouraging competition between pharma companies for product placement on formularies.

Nucala

GSK's Nucala: found to be over-priced by ICER in its value assessment

Founded in 2005, ICER regularly publishes cost-effectiveness guidance on medicines and over the years has shot down a number of new drugs, including PCSK9-targeting cholesterol drugs from Amgen and Sanofi/Regeneron, GlaxoSmithKline’s severe asthma therapy Nucala (mepolizumab) and Vertex’ range of cystic fibrosis drugs. It also recommends when prior authorization should be obtained – for example with the new CGRP inhibitor migraine drugs.

The move comes as the drug industry and President Donald Trump have levelled accusations at PBMs and other “middlemen” in the healthcare supply chain of contributing to the problem of high drug prices by pocketing rebates and not passing on savings to customers. CVS and the other big PBMs – Express Scripts and UnitedHealth – refute that suggestion, arguing that their negotiating power is helping to keep prices in check.

CVS’ white paper is a bite back at the criticism of the PBM sector, and it insists rebates obtained from manufacturers are returned to its customers to lower their costs.

“While it is often lost in the debate over who is responsible for high drug prices, CVS Caremark has been able to help improve adherence and keep drug cost inflation under control in spite of steady price increases by manufacturers,” it asserts.

It says that claims by drugmakers that they raise prices because they have to pay rebates are “a myth” and – in many cases – “list prices are increasing faster for drugs with smaller rebates than for medications with substantial rebates.”

Along with ICER guidance, CVS says it has two other new strategies to help reduce costs, including the adoption of a broader definition of preventive drugs for chronic diseases to enable more patients to avoid out-of-pocket costs, and the development of transparency tools that can be used by doctors, pharmacists, and consumers to understand the real costs of drugs.

The new measures will lower costs for patients and cut into profit margins for pharma companies, says the PBM. It insists however this will not be a barrier to drug discovery – as is often cited by drugmakers – as companies currently “spend more on marketing that discovery”.

Earlier this week, US industry body the Pharmaceutical Research and Manufacturers of America (PhRMA) highlighted a study by Memorial Sloan Kettering Cancer Center researchers in a blog post, which “reinforces that one-third of medicine list prices are rebated back to …PBMs, wholesalers, health plans and other stakeholders in the biopharmaceutical supply chain.”

16th August 2018

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