In the latest fracas over pharmaceutical pricing, several large drug makers are objecting to the value assigned to their multiple myeloma treatments by a controversial nonprofit, which is increasingly influencing coverage decisions made by insurers.

In a recent report, the value of three medications was determined to be significantly below their list prices, which run from $8,000 to $14,000 a month. And the findings may cause a showdown at a May 26 meeting that the Institute for Clinical and Economic Review is holding to review its analysis.

In its analysis, the nonprofit found that a vial of Kyprolis, which is sold by Amgen, costs $1,862, but ICER determined the medicine should be priced anywhere from $673 to $1,267 in order to be cost effective. The wide range reflects different benchmarks for assessing the value known as QALY, or quality-of-life years. This measures both the quantity and quality of life generated by providing a treatment or some other health care intervention. More specifically, a QALY measures life expectancy and the quality of the remaining years of life when using a treatment.

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For instance, a vial of Empliciti, which is sold by Bristol-Myers Squibb, costs $2,368, but the analysis found the drug would be cost effective if a vial were, instead, priced from $267 to $588. And Ninlaro, a capsule sold by Takeda Pharmaceuticals and priced at $2,890, would be more cost effective if priced between $181 and $587, according to the analysis.

To be sure, the new drugs, which are used by patients who have relapsed or did not respond to previous attempts at treatment, are seen as beneficial. More than 26,000 people in the United States were diagnosed last year with multiple myeloma and more than 11,000 died, according to the National Cancer Institute. ICER acknowledges the new treatments can help patients live longer.

But ICER maintains the list prices aren’t justified. “At current wholesale acquisition costs, the estimated long-term cost-effectiveness of these regimens exceeds commonly cited thresholds,” said ICER President Dr. Steven Pearson in a statement accompanying the report, which was released earlier this month. To conduct its analysis, ICER reviewed more than three dozen studies for the different drugs.

Of course, list prices do not reflect rebates that manufacturers may offer pharmacy benefits manager and insurers. Nonetheless, the analysis has upset several of the drug makers. Over the past two years, the nonprofit has argued the prices for new treatments for hepatitis C and high cholesterol, for instance, are not cost effective. And payers have used its reports as ammunition in haggling with drug makers.

“Unfortunately, in its draft report evaluating multiple myeloma treatments, ICER underestimates the value of (the) treatments by using arbitrarily low value estimates and thresholds, combined with alarming overestimations of the penetration and budget impact of newer medicines,” an Amgen spokeswoman wrote us.

Amgen, in fact, last month openly questioned the ICER analysis before it was officially released. The drug maker argued that the ICER process wasn’t fully transparent and challenged its methodology, especially since Amgen ran its own cost-effectiveness analysis.

“We remain concerned that ICER is focused on ringing alarm bells from a payer perspective, rather than focusing on a rigorous analysis that fully reflects the cancer patient perspective of value,” the Amgen spokeswoman wrote.

Similarly, a Takeda spokeswoman wrote us that “one of the flaws with the ICER study is that Ninlaro, (which is) the least costly therapy, is shown to have the highest cost. There does seem to be a problem with the ICER analyses.” She added that “ICER truly does not understand or value the importance of progression-free survival (the ability of a drug to extend life) or innovation.”

[UPDATE: A Bristol-Myers spokeswoman sent this: The report “takes a narrow view on what we believe are larger issues that cannot be evaluated in isolation when determining the value of treatment for multiple myeloma or any other pharmaceutical therapies. The report is based on a number of assumptions, as it relies on cross-comparisons between clinical trials featuring highly diverse patient populations and substantial differences in trial design.”]

A Novartis drug, Farydak, was considered cost effective, but only in so-called third-line use, which refers to a medicine that is used after other treatments have not worked. ICER had expressed concerns about its use as a second-line therapy due to issues in clinical trials, according to Dan Ollendorf, chief scientific officer at ICER.

A Novartis spokeswoman wrote us that the drug maker wants ICER to reassess its rating. “We believe there are several limitations with their analysis that warrant consideration. The report lacks the patient perspective and real world experience with the treatment, which is important to consider to fully understand the risk/benefit profile of a therapy.”

In response to the criticism, Ollendorf noted that “the entire cost of a regimen, including how long a drug has to be given, needs to be understood to gauge the cost impact. Some patients are given a drug for a fixed period of time, but some until the disease progresses.” In other words, costs will vary.

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