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Weekly View
September 2, 2021
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The unofficial end of summer is upon us. In preparation for the holiday, we’re sharing this newsletter a day early. We hope you have a safe and enjoyable Labor Day weekend!
OK, let's see what happened this week...
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Last week, we published an Observational Real-World Evidence (RWE) Update to our 2018 assessment of therapies for hereditary angioedema (HAE).
HAE was an ideal candidate for an RWE update because, as ICER emphasized throughout our 2018 assessment, our cost-effectiveness models were unusually sensitive to an assumption around how many HAE attacks patients were experiencing before initiating treatment. We based our initial assumption on the clinical trial data, but until working with Aetion on this update, we had no way of knowing what the baseline attack rate looked like in the real world. If real-world patients, on average, had a slightly higher baseline attack rate than what was suggested by the clinical trials, these treatments could have appeared cost-effective at their current prices. On the other hand, if patients going on treatment had a slightly lower baseline attack rate than what was previously assumed, the therapies’ prices would need to be substantially discounted to reach common thresholds for cost-effectiveness. Until we looked at the RWE, we could not predict which direction our economic models would tilt.
RWE will never replace high-quality, randomized clinical trial (RCT) data in isolating a treatment’s effect. But this pilot shows one way claims data can produce complementary insights. There are going to be instances when RWE demonstrates that a drug is more valuable than what was previously understood, and there will be other instances when RWE demonstrates that a drug’s price needs to come down. In situations like this -- when cost-effectiveness models are atypically sensitive to a single assumption -- observational RWE will continue to serve as a helpful tool for ICER and other HTA bodies.
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USC-Brookings Schaeffer Initiative for Health Policy
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While analyzing potential federal legislation on drug pricing, researchers from the USC-Brookings Schaeffer Initiative for Health Policy explore six key policy choices that any effort to rein in drug prices would have to address: (1) the role and authority of HHS in price-setting, (2) the decision to extend changes to all drugs or only high-cost ones, (3) private payers' ability to negotiate prices, (4) coverage policies for Medicare beneficiaries versus the general public, (5) value assessment, and (6) the overall selection process of which drugs to review. |
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Forbes
American Academy of Neurology (Podcast)
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A funny thing happened on the way to that $56,000-a-year Alzheimer’s drug (a price that is 7-19x higher than ICER’s benchmark): Payers are reluctant to pay, providers are reluctant to prescribe, and the price is coming down -- at least for some patients. It is a tale that could push Congress to allow Medicare to negotiate drug prices.
Related, neurologist Brian Callaghan discusses the American Academy of Neurology's reaction to ICER's recent assessment of aducanumab (Aduhelm).
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MUST READS
Inside Health Policy
The Hill
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Late last week, the Congressional Budget Office revised its estimate for how much Medicare drug-price negotiation might hinder future pharmaceutical innovation. Without determining whether the effect would be for either novel therapies or “me-too” therapies, the new CBO model suggests that HR 3 may lead to the development of 2 fewer drugs (a 0.5% reduction) in the first decade of Medicare drug-price negotiation, and 23 fewer drugs (a 5% reduction) over the second decade. Rachel Sachs, associate law professor at Washington University in St. Louis, suggested that this revised projection may still overstate the bill's potential impact on pharmaceutical companies:
“First, the innovation baseline that it's being measured against wasn't intentional. Policymakers didn't create Part D to provide optimal incentives for innovation -- they created it to give seniors a pharmacy benefit. Second, HR 3 itself includes policies (like the Part D restructure) that would increase expected returns, and may be coupled with others (such as coverage expansion). Solely analyzing provisions that would reduce returns would be misleading, as a result.”
Meanwhile, corporate employers are pushing for the lower drug prices to apply to people with private insurance as well, saying all Americans, not just those on Medicare, need relief.
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USC-Brookings Schaeffer Initiative for Health Policy
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Researchers from the USC-Brookings Shaeffer Initiative for Health Policy and the Washington University School of Law present a framework for categorizing and analyzing a wide range of proposed policy reforms for prescription drug pricing. They argue that policymakers should think about the following categories for reform options: (1) those focusing on patients’ out-of-pocket costs; (2) those targeting problematic incentives for various stakeholders within the system; and (3) those addressing the high prices of particular drugs.
The authors emphasize that choosing reforms primarily within a single category is unlikely to sufficiently address the many problems at play, and may even exacerbate other dimensions. For instance, reducing drug prices should help lower patient out-of-pocket costs, but solely reducing out-of-pocket costs can exacerbate problematic incentives and lead to higher prices.
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For years, top pharma companies responded to pricing criticism by pledging to limit their annual increases below 10%. But now it appears some big players are starting to test the limits of pharma’s social contract, Bernstein biopharma analyst Ronny Gal pointed out.
Amgen recently raised the list price for its psoriasis med Otezla by 2.4%, bringing its total increase to 10% over the last year. For a big-selling immunology drug, Gal states the number is "far above the 5% trend the industry accepted" during former president Donald Trump's term.
Amgen's hike came two weeks after Merck raised prices on a slew of its vaccines, sending prices up 11% year-over-year. Given that those price jumps didn’t make headlines, Bernstein analysts “wonder if pharma is now testing the market sensitivity for higher increase rates.”
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While ICER determined that Zolgensma’s $2.1 million price was warranted, given the treatment’s unique ability to transform patients’ lives, this should not be viewed as a price anchor for future gene therapies. Each gene therapy will offer a different mix of patient benefits and cost offsets, and each should be priced accordingly. (Many gene therapies will only be cost-effective at a price that's far lower than Zolgensma’s.)
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Roche has decided to withdraw its immunotherapy Tecentriq as a treatment for a type of breast cancer in the United States. The drug received accelerated approval in 2019 to treat inoperable, locally advanced or metastatic triple-negative breast cancer in people whose tumors express PD-L1, a protein that may help the cancer avoid detection by the immune system. But it failed last year to deliver positive follow-up data required by the FDA.
As ICER detailed in our recent white paper, the successes of the accelerated approval pathway are many, but policy experts are concerned the FDA has lacked consistency in its application of evidentiary standards, and that the pathway also lacks adequate incentives to get high-quality confirmatory trials completed in a reasonable time frame.
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Want to work for a fast-paced, mission-driven organization? Look no further! ICER is looking to expand our team, which includes a diverse set of clinicians, researchers, and policy experts.
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Research and Health Economics
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9/10: Myasthenia Gravis Evidence Report
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10/7: Hypertrophic Cardiomyopathy Evidence Report
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