The Institute for Clinical and Economic Review (ICER) collaboration with the Department of Veterans Affairs (VA) Pharmacy Benefits Management Services office (PBM) on price negotiations is garnering attention—some good, some bad.
As part of this arrangement, ICER will work with staff in the VA PBM to facilitate their integration of ICER reports into the VA formulary management process of evaluating the comparative clinical effectiveness and value of drugs. This is an ongoing collaboration first announced in June 2017.
In a Health Affairs blog post, National Pharmaceutical Council (NPC) Chief Science OfficerRobert Dubois, MD, PhD, urges caution with the VA-ICER arrangement.
“If the use of multiple value assessment frameworks by organizations such as the VA brings greater value to our veterans, who have given so much for their country, then this could be a positive development,” Dubois says. “But frameworks cannot be used in a vacuum. It’s incumbent upon the VA and ICER to ensure that a broad array of evidence is used and regularly updated, a variety of frameworks and stakeholder input is considered, and the factors that are important to veterans and their families are included in decision-making.”
In a response piece also published on the Health Affairs blog, representatives of the VA noted that “The sole purpose of the VA’s collaboration with the ICER is to have access to an independent assessment of value for new drugs of interest, as just one part of the VA’s overall evidence-based, deliberative process. The VA budget is fixed each year at a certain level—within this context our (VA PBM) goal is to provide the highest-quality, safest, and best-value pharmacy benefit to our veteran patients. The fact that we leverage our buying power to negotiate the “steepest discounts in the country” for prescription drugs should be celebrated and not be a cause for concern.”
According to Ken Perez, vice president of healthcare policy, Omnicell, Inc., an automated healthcare solutions company, the “bigger, unspoken concern of pharmaceutical companies is the precedent that the VA-ICER collaboration may set for price negotiations applied to other populations, such as Medicare and Medicaid, or in the worst case from the drug makers’ perspective, for the entire population under a single-payer system such as Medicare for All, as evidenced by Dubois’s reference to the healthcare systems of the United Kingdom, Germany, and Australia,” Perez says.
Meanwhile, the ICER says that it is helping the VA provide the highest quality care for veterans while protecting U.S. taxpayers from unnecessarily high drug prices.
“ICER’s evidence reports are objective and supported solely by grants from nonprofit foundations,” ICER wrote in a statement to Managed Healthcare Executive. “In a public, transparent process that includes input from manufacturers, clinicians, insurers and patients, ICER independently reviews all available evidence to assess the clinical and cost effectiveness of each drug. In addition to reviewing all newly approved medicines, we plan to revisit and update our assessments as new evidence becomes available for therapy classes we have previously reviewed.”
“The VA does not plan to apply a strict cost-effectiveness threshold approach to its formulary,” according to the ICER statement. “The ICER value-based assessments are important—but not the only—inputs that the VA considers when making these coverage determinations. By incorporating ICER’s reports into its own PBM processes, the VA is now able to 1) identify which medicines offer the best long-term value and 2) negotiate agreements with manufacturers that more closely align each drug’s price with how well it improves veterans’ lives.”
Criticisms and concerns
NPC’s concerns are described in an earlier Health Affairs blog, pointing out the issues with the ICER framework’s underlying methodologies, including the budget threshold impact and heavy focus on the payer perspective, among others.
“Another challenge is that ICER assessments are a static representation of evidence at a point in time,” Dubois says. “They don’t routinely update their coverage decisions as new evidence evolves, like most payers do. Outdated information could hurt, rather than help patients; we hope that won’t be the case in this partnership.”
ICER recently announced that it will be expanding its scope to include more frequent updates to existing reviews based on new evidence.
Medical Economist Robert Goldberg, PhD, cofounder and vice president of the Center for Medicine in the Public Interest, believes that the VA has consistently limited access to new medicines at a great cost to patients.
“The innovation gap has grown since then,” Goldberg says.
In its Health Affairs blog, the VA notes “the goal [of the collaboration] is not to use these assessments to deny veterans access to new and expensive drugs but to make these drugs more accessible by obtaining the best price available and hence increasing their value.”