Drugs are Overpriced According to the ICER Framework

May 2021

The Institute of Clinical and Economic Review (ICER) emerged as a critical voice in evaluating value-based price (VBP) benchmarks for drug pricing. However, despite its growing presence in the life sciences industry, the organization’s magnitude of impact on drug pricing is currently unknown.

ISPOR conducted a retrospective review of 34 ICER Final reports from November 2007 to October 2020 to compare ICER-estimated VBPs to net pricing for 95 drugs across 35 indications. They found that the net price of 81% of drugs exceeded the $100,000/QALY VBP threshold and 71% exceeded the $150,000/QALY VBP threshold. Approximately half of the drugs needed at least a 36% reduction to be considered cost-effective at the $150,000/QALY threshold.

Current net prices are poorly aligned with ICER-estimated VBPs framework, leaving questions about value to the market. As ICER’s framework and opinions gain more traction, it may become more common for the drug manufacturers to collaborate with ICER in earlier stages of development. As the Biden administration seeks to advance significant drug-pricing reform, it could refer to ICER reports for value assessment and manufacturers that haven’t done their homework could be disadvantaged going to market.

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