Are Drugs Priced in Accordance With Value? A Comparison of Value-Based and Net Prices Using Institute for Clinical and Economic Review Reports

Abstract

Objectives: The Institute for Clinical and Economic Review (ICER) is an independent organization that reviews drugs and devices with a focus on emerging agents. As part of their evaluation, ICER estimates value-based prices (VBP) at $50 000 to $150 000 per quality-adjusted life-year (QALY) gained thresholds. We compared actual estimated net prices to ICER-estimated VBPs.

Methods: We reviewed ICER final evidence reports from November 2007 to October 2020. List prices were combined with average discounts obtained from SSR Health to estimate net prices. If a drug had been evaluated more than once for the same indication, only the more recent VBP was included.

Results: A total of 34 ICER reports provided unique VBPs for 102 drugs. The net price of 81% of drugs exceeded the $100 000 per QALY VBP and 71% exceeded the $150 000 per QALY VBP. The median change in net price needed to reach the $150 000 per QALY VBP was a 36% reduction. The median decrease in net price needed was highest for drugs targeting rare inherited disorders (n = 15; 62%) and lowest for cardiometabolic disorders (n = 6; 162% price increase). The reduction in net prices needed to reach ICER-estimated VBPs was higher for drugs evaluated for the first approved indication, rare diseases, less competitive markets, and if the drug approval occurred before the ICER report became available.

Conclusion: Net prices are often above VBPs estimated by ICER. Although gaining awareness among decision makers, the long-term impact of ICER evaluations on pricing and access to new drugs continues to evolve.

Keywords: Institute for Clinical and Economic Review; cost-effectiveness; cost-utility analysis; health economics; model-based economic evaluation.