Aligning Drug Prices and
Benefits:
What Are Our Options?
Dan Ollendorf, PhD
Chief Scientific Officer
Institute for Clinical and Economic Review
May 17, 2016
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Pricing of new (or old)
pharmaceuticals: our current context
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Drug Prices: Why Should We Care?
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The ICER Value Framework
• The “problems” the value framework was intended to
address
– Poor reliability and consistency of value determinations by payers
– Need for a more explicit and transparent way for HTA groups and
payers to analyze and judge value
• Tension between long-term and short-term perspectives
• The goal
– A common language and mental model of the components of value
across life science companies, payers, and other stakeholders
• A distinct goal for ICER
– Underpin public HTA programs in California, the Midwest, and New
England that deliberate and vote on effectiveness and value
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A Value Assessment Flowchart
Comparative
Clinical
Effectiveness
Incremental cost per
clinical outcomes
achieved
Other
benefits or
disadvantages
Contextual
Considerations
“Care Value”
Discussed and
voted upon during
public meetings
High
Intermediate
Low
“Care Value”
Discussed and
voted upon during
public meetings
High
Intermediate
Low
Potential
Short-Term
Health System
Budget Impact
Provisional
“Health System Value”
Discussed and
voted upon during
public meetings
High
Intermediate
Low
Mechanisms to
Maximize Health
System Value
Discussed during
public meetings; included
in final ICER reports
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Achieved
“Health System Value”
Not evaluated
by ICER or
voted upon by
public panels
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Potential Budget Impact Threshold
• Intent to address tension between long-term
value and short-term affordability
• Calculation tied to growth in overall US
economy
• NOT A CAP
• A signal that the costs of a new intervention
may need to be managed in some way
• 2015-16 threshold: $904 million per new
innovative drug
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From Value Assessment to ICER
“Value-Based Price Benchmarks”
Praluent or Repatha
Population
Care Value Price:
$100K/QALY
Care Value Price:
$150K/QALY
Draft Value-Based
Price Benchmark
$8,000
Max Price at
Potential Budget
Impact Threshold
$10,278
FH
(n=453,443)
CVD statin-intolerant
(n=364,948)
CVD not at LDL target
(n=1,817,788)
$5,700
$5,800
$8,300
$12,896
$5,800-$8,300
$5,300
$7,600
$2,976
$2,976
TOTAL (n=2,636,179)
$5,404
$7,735
$2,177
$2,177
Price to Achieve
$100K/QALY
Price to Achieve
$150K/QALY
Max Price at
Potential Budget
Impact Threshold
Draft Value-Based
Price Benchmark
$9,480/year
$14,472/year
$4,168/year
$4,168/year
$5,700-$8,000
Entresto
Population
Entresto
(n=1,669,235)
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More Recent Topics
• Mepolizumab (severe asthma), insulin
degludec (T1/T2DM), several new drugs for
multiple myeloma
• Potential budget impact threshold not crossed
in any recent evaluation, but:
– Questions raised regarding long-term costeffectiveness
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Q&A
www.icer-review.org
http://ctaf.org/
http://www.icer-review.org/midwestcepac/
http://cepac.icer-review.org/
Personal contact: [email protected]
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