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As the national debate over prescription drug pricing reaches a fever pitch, drug manufacturers bringing new products to market face unique challenges. From the threats of political oversight and media scrutiny to academic guesstimates on the value of these products, the current environment for bringing breakthrough treatments to market is marked by unprecedented scrutiny. Perhaps nowhere is this more apparent than in the burgeoning world of cost-effectiveness analysis.

In this exercise, health care researchers rely on a variety of data to try to quantify how much a treatment extends life and improves health. The result of cost-effectiveness analyses is often a threshold — or a range of prices — at which researchers believe the treatment would be worth paying for.


From an economic perspective, the limitations of cost-effectiveness analyses are obvious. Estimates of a treatment’s value are typically based on demand-side considerations, such as the drug’s efficacy and effectiveness, safety, side effects, and cost. Yet the companies that create new medicines must compensate for supply-side factors, such as the time, risk, and capital necessary to bring the product to market.

While cost-effectiveness analyses may be useful as a research tool, their growing application to real-word decision-making poses a serious threat for access to today’s innovative treatments.

In the U.S., the 800-pound gorilla of cost-effectiveness analyses is the Institute for Clinical and Economic Review (ICER), which calls itself “an independent and non-partisan research organization.” But with a governing board stacked with insurance industry executives, patients and drug innovators should make no mistake about who ICER is serving.


While critics raise concerns with ICER’s breakneck process and a methodology that patients have called “discriminatory,” the interests of insurers appear to be sacrosanct. And despite substantial public criticism, ICER has doubled down on its use of the quality-adjusted life year (QALY), a measure that routinely undervalues interventions for older people, individuals with disabilities, and those with chronic conditions.

As Patricia Goldsmith and Carole Florman of CancerCare recently pointed out in STAT, ICER’s latest framework “will continue to exclude disease-specific experts, patients, and caregivers from voting panels; and will maintain review schedules that signal a greater commitment to speed than accuracy.”

I believe that ICER poses a threat to patient access to new therapies. Its cost-effectiveness determinations have been so reliably friendly to insurers that CVS announced late last year a plan that would allow its pharmacy benefit manager, Caremark, to refuse to cover drugs that don’t pass ICER review. That’s a terrifying proposition for drug makers that have invested more than a decade of research and billions of dollars to earn FDA approval and bring products to market and the patients who are desperate to access those treatments.

Not always a death knell

ICER has established a track record of determining that most new treatments are not worth paying for. Yet the announcement that it will review a new drug is not always a death knell. In fact, the organization’s credibility rests on its ability to occasionally say “yes” to innovation.

Through focused campaigns that combine effective outreach to allied stakeholders, evidence development, and good communication, those who have the most to lose from an unfavorable ICER assessment — such as drug manufacturers, patient groups, and others — can establish a compelling narrative about the value of their treatments to help earn the organization’s approval.

Just look at ICER’s $2.1 million cost-effectiveness threshold for Zolgensma, a gene therapy for treating spinal muscular atrophy (SMA). Beyond offering what former acting FDA Commissioner Ned Sharpless called a “milestone in the transformational power of gene and cell therapies,” leading SMA advocates were organized, well-resourced, and equipped with peer-reviewed scientific literature.

Shaping ICER’s opinion about the value of a new product is no easy task, especially when the organization is demonstrably dismissive of “lived experiences” from people whose lives are touched by disease. In many cases, the organization has been downright patronizing when presented with such stories. “That’s why we don’t have you vote,” ICER’s president, Stephen Pearson, said to the parent of a child with Duchenne muscular dystrophy at a meeting on the disease.

While patient groups often feel slighted by ICER’s clandestine review process, those that have the resources to provide information that ICER will accept as rigorous data have been more successful in moving the needle.

To accomplish that, it’s necessary to go beyond anecdotal evidence and emotional testimony and come armed with quantifiable data on everything from the hours of productivity stolen by a disease to the side effects of alternative treatments, caregiver burden, and more. Admittedly, that is a time- and resource-intensive process for patient groups operating with fixed budgets — or no budgets at all. It’s important to go into the process wide-eyed and ready to document if ICER incorporated the information and feedback given to it and whether its assessment has captured real-world patient experiences.

To earn ICER’s support, ironclad data on a product’s clinical effectiveness is a merely a prerequisite. Beyond that, offering nuanced perspectives on condition-specific data can give ICER’s decision-makers quality-of-life metrics that accurately show a therapy’s true value to patients. While ICER may decline to incorporate the data, simply offering it can help underscore the shortcomings of an unfavorable assessment.

When done right, these efforts can make a difference. ICER’s recent draft evidence report on treatments for rheumatoid arthritis is a good example. After extensive stakeholder feedback that highlighted shortcomings in its methodology, ICER took the unusual step of withdrawing its draft report suggesting that three next-generation treatments for rheumatoid arthritis would be unlikely to be cost-effective.

While ICER’s assessment of these products may not yet be resolved, the withdrawal at least demonstrates a willingness to adapt and respond to data-driven, well-publicized public critiques.

ICER alternatives

Although it is easy to assume that ICER is the only game in town, several organizations are attempting to address its shortcomings and bring a more nuanced, patient-centered approach to the value debate.

One is the Patient-Driven Values in Healthcare Evaluation initiative, based at the University of Maryland School of Pharmacy. It is dedicated to developing and advancing new methods to incorporate the patient perspective into value assessment and value-based decision-making.

Likewise, the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center is exploring how to incorporate nontraditional elements of value into cost-effective analyses. And the University of Colorado Pharmaceutical Value initiative is applying novel multi-criteria decision-making methods that actively encourage stakeholder engagement in the development of patient-centered decision tools.

Another ICER alternative is the Innovation and Value Initiative, a membership-based nonprofit organization headquartered in Alexandria, Va. It is taking these efforts a step further by working to create an interactive learning system. As economist Wayne Winegarden recently commented in Forbes, this initiative’s “flexible interactive system that empowers multiple perspectives (e.g. patients, providers, payers, and manufacturers) and can account for both individual and qualitative considerations can be a valuable tool that addresses some of the flaws inherent in value assessment frameworks” like the one ICER uses.

The ambitions of these alternative value assessments are especially encouraging given ICER’s narrow focus. As that organization continues to develop value assessments with payers’ fingers on the scale, patient advocates and drug manufacturers should increasingly look to these more holistic approaches in highlighting the value of their novel therapies. With strategic investment in alternative models for assessing value and an adept communications strategy, they can ensure that the right message is delivered in the court of public opinion.


While I contend that ICER’s value-assessment methodology is unmistakably designed to serve payers, that doesn’t mean other stakeholders can afford to ignore the organization. It has the ear of many policymakers looking for quick fixes on drug pricing, and more than a dozen drug makers currently support ICER with annual contributions. But make no mistake: Sponsorships alone do little to influence ICER. Those hoping to get a reasonable outcome from an ICER value assessment must approach the process with a sophisticated strategy.

Harmonizing the desire for affordable pharmaceuticals with the challenge of keeping the innovation pipeline flowing requires a delicate balance that simply cannot be reflected in a single value assessment. And as long as payers are relying on these assessments to tell their side of the story, drug innovators and patients would be wise to start establishing narratives of their own.

Shea McCarthy is a senior vice president at Thorn Run Partners, where he focuses on federal health care policy and advocacy. The firm receives fees for services it provides to stakeholders across the health care spectrum including patient groups, provider organizations, drug and device manufacturers, and others.