Last month, ICER updated their protocol for identifying drugs that have unsupported price increases (UPI). Not only is ICER examining rising drug prices, but California and Vermont now have laws tracking substantial drug price increases, requiring drug manufacturers to submit information that might justify increases above a certain threshold.
ICER says that the UPI reports are not intended to determine whether a price increase for a drug is fully justified by new clinical evidence or meets an ICER health-benefit-based price benchmark. Instead, ICER’s aim with these reports is to determine “whether substantial new evidence exists that could justify its price increase.”
How does ICER determine that a drug belongs on it’s UPI list? I review ICER’s approach below.
Drug selection process:
Process to identify top 10 drugs:
Step 1: Identify drugs that meet the following criteria:
- Are among the top 250 drugs by US net sales revenue
- Have increases in wholesale acquisition cost (WAC) that exceed the rise in average medical consumer price index (CPI) of by more than 2 percentage points
Step 2: Among the drugs in Step 1, select the that have the largest budget impact (i.e., change in net price times number of people prescribed) a
- Net sales revenue come from SSR Health data from the prior year and estimates of the impact on the change in price (and potentially change in sales volume) will be considered
Step 3: ICER contacts the drug manufacturers of the top 15 drugs identified in Step 2 to inform them that their drugs will potentially be reviewed as part of the UPI process.
Step 4: Manufacturers will have three weeks to contact ICER with any concerns about ICER’s estimates of average price changes or budget impact and any corrections to the calculations
Step 5: After discussion with manufacturers, any drugs with net budget impact less than $25 million are removed from the list.
Step 6: After these discussions with manufacturers, final list of the 10 drugs with the highest net budget impact expected in the forthcoming year are published publicly.
Process to identify top 3 Medicare Part B drugs (Additional Therapies)
While the general UPI approach for 2022 generally mirrors that of previous years, this year ICER added a process for identifying drugs covered by Medicare Part B where price increases are likely to have a large impact on government finances.
Step 1: Identify drugs covered by Medicare Part B that meet the following criteria:
- Have more than $50,000 in cost per fee-for-service patient (note: this cost includes both Medicare and patient out-of-pocket costs)
- Have increases in wholesale acquisition cost (WAC) that exceed the rise in average medical consumer price index (CPI) of by more than 2 percentage points
Step 2: Drugs meeting the criteria in Step 1 are then ranked based on expected change in budget impact, calculated as: average annual total spending per patient in the first year of the Medicare Part B Price Increase Period multiplied by the percentage change in average spending per dosage unit (from first to last year of the Medicare Part B Price Increase Period) multiplied by the total number of patients who used the drug in the last year of the Medicare Part B Price Increase Period.
Step 3: ICER contacts the drug manufacturers of the top 15 drugs identified in Step 2 to inform them that their drugs will potentially be reviewed as part of the UPI process.
Step 4: Manufacturers will be asked if they had previously or are currently contested the relevant government dataset results for their drug. If so, the drug will be removed from consideration.
Step 5: The top three drugs will be reviewed as “Additional Drugs” as part of the 2022 UPI report
Final list:
For the 2022 report, ICER decided will not publicly the list of 10 UPI drugs or 3 Additional therapies while the UPI review is taking place. The reason for this is that ICER heard concerns that being on such a list was stigmatizing even when a determination has not yet.
What evidence can drug manufacturers provide
ICER allows manufacturers to provide the following evidence which could potentially support price increases:
- New clinical/economic evidence: New evidence or analyses published or presented over the two-year Evidence Review Periods that demonstrate improved clinical or economic outcomes compared with what was previously believed
- New indication: Older evidence that led to a new approved indication for the drug within the two-year Evidence Review Periods
- New evidence relative to comparator: New evidence or analyses published or presented over the two-year Evidence Review Periods relating to comparator therapies that the manufacturer believes indicate clinical advantages of their drug
- Change in cost: A large increase in costs of production
- Cost offsets: Large price savings attributable to the drug in other parts of the health care system
- Other: All other reasons deemed relevant by the manufacturers.
Key changes in methods from previous years.
Key methodological changes from previous years include
- Removal of drugs from UPI list if net budget impact increases by less than $25 million.
- Inclusion of the “Additional Drugs” process for Medicare B covered drugs
- For therapies being evaluated in sequential reports, only considering evidence that became available since the prior review