ICER, VA join to work on drug value, price negotiations

The Institute for Clinical and Economic Review (ICER) will work with the Department of Veterans Affairs (VA) Pharmacy Benefits Management Services office (PBM) to facilitate their integration of ICER reports into VA’s formulary management process of evaluating the comparative clinical effectiveness and value of drugs.

“This process evaluates the comparative clinical effectiveness and value of drugs. ICER will also work with VA staff to develop options for using ‘value-based price benchmarks’ suggested in ICER reports to support negotiations with pharmaceutical companies-with the goal of maintaining excellent access to important treatments while ensuring prudent use of VA resources,” Ndidi Mojay, VA spokesperson, tells Managed Healthcare Executive. “As it has in the past, VA will continue to use ICER reports as part of its drug formulary management processes. VA’s overarching goal is to incorporate as much high-quality information as possible, such as that found in ICER reports, into VA’s drug review and decision-making processes.”   

ICER’s drug assessment reports include a full analysis of each therapy’s comparative clinical effectiveness, cost-effectiveness, and potential budget impact. Patient input is used to inform these analyses and to identify other potential benefits and broader contextual considerations that should be considered in judgments of overall value. ICER uses transparent methods to calculate for each new drug a value-based price benchmark anchored to the benefit the drug brings to patients. For its drug assessment reports, ICER works with the patient community and clinical experts, and invites a broader public engagement by convening public meetings at which independent committees debate the report findings with the input of all stakeholders.

VA uses drug reviews from a variety of sources, therefore using ICER reports in and of itself is not necessarily unique, according to Mojay. However, “from VA’s perspective, what is unique about the collaboration arrangement is that VA and ICER staff can engage each other on issues of mutual interest,” she says.

ICER itself will determine the products it will consider for review. VA reviews all new molecular entities and prioritizes those reviews based on the needs of the Veteran population.

Next: Focus on value

Focus on value

The goal of the ICER-VA collaboration isn’t focused on savings, according to Mojay. “Rather, it focused on assessing value of treatment options and ensuring drugs are used appropriately for patients,” she says.

Borzilleri

A unique element of this particular evaluation process is utilizing the effectiveness of drugs with a cross analysis of the long-term economics and costs, according to InteliSys Health CEO Tom Borzilleri.

“In the past, effectiveness was typically assumed based on clinical studies but no comprehensive data has ever been gathered across a defined group of patients using actual treatment effectiveness results and the costs associated with the ingredients prescribed,” Borzilleri says. 

Managed care executives don't have either the funding or large populations of patients that can be enrolled in studies that are big enough to determine the comparative “value” of new drugs, according to Tom Sullivan, MD, chief strategic officer and chief privacy officer for DrFirst, a software solutions and services provider.

“Adding cost to the equation of outcomes-also known as value-can provide pharmacoeconomic answers that have been difficult to obtain in the past,” Sullivan says. “Kaiser and a very few others have some studies that have been previously helpful but the VA has a longer history of attempts to get these answers through large trials. Within the VA, its single vendor, uniform EHR and its successor should also make this easier and less costly to collect and mine the relevant data."

Sullivan

If the studies are well designed and correctly implemented, the findings should lead both tax-supported plans and the private sector to better promote more cost-effective decisions regarding preferred treatments, according to Sullivan. “Further, those finding would lead to formulary policies with appropriate guidance and exceptions. Better adherence will follow if the proper education--and in some case incentives-takes the findings into consideration,” he says.

Borzilleri believes that although savings would be difficult to predict, “one would expect that the proposed methodology should provide new insights that may produce actionable data, which will produce improved cost abatement,” he says. “When addressing the drug costs across the general population, it’s a known fact that affordability has a direct influence and impact on drug compliance, adherence and patient outcomes. Identifying more effective or the most effective treatments will always have a positive impression on patient outcomes. But when addressing a population of patients that receive a fully-paid benefit, where affordability is not part of the equation as is with patients within the VA system, adherence most likely will not be able to be quantified as accurately.”

However, not everyone is happy about this partnership. Robert Goldberg, PhD, co-founder and vice president of the Center for Medicine in the Public Interest. (CMPI), says: “This is alarming-not only for veterans but for all Americans. This is the first time a group is using cost effectiveness to limit access. This violates the Affordable Care Act’s prohibition on using Quality Adjust Life Years (QALY) to set price or access."

Further, Goldberg says, "this will lead to less access, more sickness since ICER claims that most new prescriptions have to be free or discounted 80% to be used, and even at that price, access would be limited to ensure new prescriptions spending doesn't go over ICER’s amount.”