New Report Addresses Distinct Challenges in Utilizing ICER to Assess Value of Rare Disease Treatments

Share on Facebook
Share on Twitter
Share on
LinkedIn
+

Pioneer Institute Discourages Policymakers & Payers from Adopting ICER to Evaluate Rare Disease Treatments

Media inquiries: Contact Micaela Dawson, 617-723-2277 ext. 203 or mdawson@pioneerinstitute.org

BOSTON, MA – Today, Pioneer Institute released a new report, Looming Challenges for ICER in Assessing the Value of Rare Disease Therapies, that examines why the Institute for Clinical and Economic Review (ICER) and the Quality Adjusted Life Years (QALY) approach to value assessment is particularly ill-suited to assess the cost-effectiveness of orphan and rare disease treatments, which represent a rapidly growing sector of the biopharmaceutical marketplace. In the report, lead author and Pioneer Institute Visiting Fellow in Life Sciences, Dr. William Smith illustrates a number of reasons why ICER is unfit to evaluate the cost-effectiveness of rare disease treatments, including:

  • ICER thresholds are not appropriate for rare disease drugs;
  • ICER’s definition of “ultra-rare disease” is arbitrary;
  • Clinical trial data is too limited to evaluate the value of rare disease drugs; and
  • ICER’s “one-size-fits-all” approach has failed to adapt to precision medicine.

With the recent growth in medicine spending, state and federal policymakers and payers are exploring the use of cost-effectiveness reviews to evaluate drugs for smaller patient populations with complex and rare diseases. Dr. Smith argues that ICER and QALY are not appropriate to meet that need.

“The ICER QALY thresholds are arbitrary enough when applied to traditional medicines but when applied to treatments for rare diseases, they take on additional – and troubling – arbitrariness…These thresholds are not “scientific” in any economic sense but, in asserting a value on human life, they are a kind of theological dogma that must be accepted on faith as an objective standard.”

As Dr. Smith points out, ICER itself has acknowledged the challenges that exist in evaluating the growing number of drugs for complex and rare diseases, and has unsuccessfully attempted to revise its value framework to meet the unique challenges associated with this segment of medicine. Between 2014 and 2018, none of ICER’s reviews of rare disease drugs resulted in a “high value” rating. A recent ICER review of two breakthrough treatments for Spinal Muscular Atrophy (SMA) concluded that neither therapy met “traditional cost-effectiveness thresholds.”

“Research and development costs for a rare disease drug are quite substantial as finding and enrolling patients in trials are particularly challenging. And with lower prevalence rates, these higher costs are spread over much smaller patient populations, making the prices for one course of treatment substantially higher than traditional small molecule drugs for large patient populations.”  

The report also examines ICER’s unwillingness to appropriately adjust its methodology for orphan and rare diseases. In 2017, ICER created a new “ultra-rare” category of diseases with patient populations of less than 10,000, a classification which does not correspond to any accepted definition of rare or ultra-rare diseases. It drew scrutiny from the patient advocacy community, including the National Organization for Rare Disorders (NORD).

“Given the arbitrary nature of ICER’s definition of rare diseases as well as their QALY thresholds, they were likely chosen to cast the widest possible net for their broader and more severe price control regime that is at the heart of the ICER model.”

Pioneer Institute discourages policymakers and payers from adopting ICER and other “one-size-fits-all” cost-effectiveness models, especially for those innovative and groundbreaking therapies to treat orphan and rare diseases. Instead, Pioneer Institute believes patients, their physicians and caregivers, and a variety of other societal factors should determine the value of these therapies.

“ICER’s continuing negative reviews of rare disease drugs seem to indicate that their goal is not to accommodate the unique contextual challenges of rare disease therapies but simply to push their prices down.”

About the Author

William Smith is Visiting Fellow in Life Sciences at Pioneer Institute.  He has 25 years of experience in government and in corporate roles, including as vice president of public affairs and policy at Pfizer, and as a consultant to major pharmaceutical, biotechnology and medical device companies. He held senior staff positions for the Republican House leadership on Capitol Hill, the White House, and in the Massachusetts Governor’s office.

About Pioneer

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.

Click image below to download our handout on this report:

Get Updates On Our Healthcare Research and Events!

Make a tax-deductible gift below to support our work to protect patients.

Recent healthcare posts:

Pioneer Institute Statement on the Commonwealth’s Discontinuance of the COVID-19 Weekly Public Health Report

Useful information about COVID cases or deaths at individual homes has become less available at a time when cases are increasing again, even among vaccinated residents. Pioneer urges Massachusetts to immediately reinstate the so-called Weekly Report, which contains cases and deaths inside individual nursing homes.

Study: Massachusetts Should Retain Additional Healthcare System Flexibility Granted During Pandemic

Massachusetts’ emergency declaration for COVID-19 ends on June 15, and with it some enhanced flexibility that has been allowed in the healthcare system.  Some of the added flexibility highlighted barriers that make the system more expensive, harder to access and less patient-centered, and the Commonwealth should consider permanently removing these barriers, according to a new study published by Pioneer Institute.

Study Calls for Better Reporting on Impact of COVID-19 in Eldercare Facilities

Over time, the Massachusetts Executive Office of Health and Human Services and Department of Public Health (DPH) have improved reporting about cases and deaths from COVID-19 in state-regulated eldercare facilities, but flaws and omissions remain and should be corrected, according to a new study published by Pioneer Institute.

New Analysis: ICER Framework Ignores Patient Preferences, Innovation & Societal Benefits in Evaluating Cost-Effectiveness of New Cancer Treatments

Pioneer Institute today released a new analysis, The QALY and Cancer Treatments: An Ill-Advised Match, that examines the alarming methodological and contextual shortcomings of the Quality Adjusted Life Years (QALY)-based methodology in evaluating new cancer therapies. The Pioneer Institute analysis reveals five specific problems with ICER’s evaluation of cancer treatments and demonstrates the urgent need to prohibit the use of the QALY amid trends in rapid cancer innovations and personalized medicine.

Study: Massachusetts Should Embrace Direct Healthcare Options

Especially in the COVID era, many are looking to alleviate the increased burden on the healthcare system.  One solution is direct healthcare (DHC), which can provide more patient-centered care at affordable prices and is an effective model to increase access to care for the uninsured, underinsured and those on public programs like Medicaid, according to a new study published by Pioneer Institute.

Survey: Consumers Want Healthcare Price Information, But Few Realize It’s Available

Great strides have been made to increase healthcare price transparency through online cost estimator tools and a state law that requires providers to give out price information. Yet despite the eagerness of consumers to access prices and out-of-pocket costs, many are unaware that such information is available and don’t know how to access it, according to survey results published by Pioneer Institute.

Study: Growth of Antibiotic-Resistant Infections Could Have Massive Human, Financial Costs

The world was blindsided by COVID-19, but a new Pioneer Institute study finds that even as we continue to wrestle with the pandemic, another threat looms that scientists have long known about but the nation has thus far failed to address: the growth of antibiotic-resistant infections. “Market dysfunction and perverse Medicare reimbursement rates have led to a growth in infections that resist antibiotics,” said Gunnar Esiason, author of “Antimicrobial Resistance: Learning from the current global health crisis to prevent another one.”  If we don’t solve this problem, the human and economic costs are likely to be astronomical.”

Study: Growing Drug Rebates Hurt Both Consumers and Healthcare System

Ever-larger rebates are distorting the market for branded drugs and producing outcomes that often benefit neither consumers nor the healthcare system, according to a new study published by Pioneer Institute.

Study: Shift from Highest-Priced Healthcare Providers Would Generate Tremendous Savings

Consumers in just one Massachusetts county could have saved nearly $22 million in a single year and $116.6 million adjusted for inflation over four years if they switched from using the most expensive providers for 16 shoppable healthcare services to those whose prices were closer to average, according to a new study published by Pioneer Institute.

Pioneer Urges Future COVID-19 Study and Recommendations Task Force to Consider Impact on Nursing Home Residents

After over 5,000 people have died of COVID-19 in Massachusetts nursing homes, Pioneer Institute is issuing an open letter to the state’s future COVID-19 health equity task force that outlines an extensive list of recommendations on infection control and preparedness in eldercare facilities.

Open Letter: COVID-19 Study and Recommendations Task Force Established Pursuant to Massachusetts Bill H.4672

Pioneer hopes the members of this important task force will be appointed as soon as possible and that they will look into recommendations to address Covid-19 among the aged and in the state’s nursing homes. Read our Open Letter.

Combatting COVID-19: Life in the MGH Emergency Room

/
Join host Joe Selvaggi and Pioneer Senior Fellow Josh Archambault as they talk with Dr. David King about the experience of being in emergent care during a pandemic and lockdown. They explore the challenges of coping with a poorly understood virus during a lockdown, all while continuing to serve the sick.

Study Finds Pandemic Likely to Negatively Impact Biopharmaceutical Sector

Contrary to conventional wisdom that says the coronavirus pandemic will generally benefit biopharmaceutical companies, a new Pioneer Institute study finds many companies will emerge from the pandemic commercially weaker, dealing with delays in new product launches and with fewer resources to invest in research and development.

National Study Finds Most States Lack Healthcare Price Transparency Laws

At a time when the coronavirus pandemic has caused massive shifts in state policies on telehealth and scope of practice in healthcare, a new Pioneer Institute study underscores that most of the 50 states continue to suffer from weak laws regarding price transparency.  The study identified states that have laws that require carriers, providers or both to provide personalized cost information to consumers before obtaining healthcare services.  Fully 33 states placed in the lowest of the three broad analytic tiers on the strength of their state healthcare transparency laws. 

A Tipping Point for Telehealth – Bringing Healthcare into Your Home

/
This week on "Hubwonk," Joe Selvaggi and Josh Archambault talk with Dr. Roy Schoenberg, Chief Executive of Amwell, a global telehealth technology company headquartered in Boston, about the promise of telemedicine and how the COVID-19 pandemic has catalyzed broader adoption.