ICER’s updated process for determining unsupported price increases (UPI)

Last month, ICER updated their protocol for identifying drugs that have unsupported price increases (UPI). Not only is ICER examining rising drug prices, but California and Vermont now have laws tracking substantial drug price increases, requiring drug manufacturers to submit information that might justify increases above a certain threshold.

ICER says that the UPI reports are not intended to determine whether a price increase for a drug is fully justified by new clinical evidence or meets an ICER health-benefit-based price benchmark. Instead, ICER’s aim with these reports is to determine “whether substantial new evidence exists that could justify its price increase.”

How does ICER determine that a drug belongs on it’s UPI list? I review ICER’s approach below.

Drug selection process:

Process to identify top 10 drugs:

Step 1: Identify drugs that meet the following criteria:

Are among the top 250 drugs by US net sales
revenue Have increases in wholesale acquisition cost
(WAC) that exceed the rise in average medical consumer price index (CPI) of by
more than 2 percentage points

Step 2: Among the drugs in Step 1, select the that have the
largest budget impact (i.e., change in net price times number of people prescribed)
a

Net sales revenue come from SSR Health data from
the prior year and estimates of the impact on the change in price (and
potentially change in sales volume) will be considered

Step 3: ICER contacts the drug manufacturers of the top 15
drugs identified in Step 2 to inform them that their drugs will potentially be
reviewed as part of the UPI process.

Step 4: Manufacturers will have three weeks to contact ICER
with any concerns about ICER’s estimates of average price changes or budget
impact and any corrections to the calculations

Step 5: After discussion with manufacturers, any drugs with
net budget impact less than $25 million are removed from the list.

Step 6: After these discussions with manufacturers, final
list of the 10 drugs with the highest net budget impact expected in the
forthcoming year are published publicly.

Process to identify top 3 Medicare Part B drugs
(Additional Therapies)

While the general UPI approach for 2022 generally mirrors that
of previous years, this year ICER added a process for identifying drugs covered
by Medicare Part B where price increases are likely to have a large impact on government
finances.

Step 1: Identify drugs covered by Medicare Part B that meet
the following criteria:

Have more than $50,000 in cost per fee-for-service
patient (note: this cost includes both Medicare and patient out-of-pocket costs)Have increases in wholesale acquisition cost
(WAC) that exceed the rise in average medical consumer price index (CPI) of by
more than 2 percentage points

Step 2: Drugs meeting the criteria in Step 1 are then ranked
based on expected change in budget impact, calculated as: average annual total
spending per patient in the first year of the Medicare Part B Price Increase
Period multiplied by the percentage change in average spending per dosage unit
(from first to last year of the Medicare Part B Price Increase Period)
multiplied by the total number of patients who used the drug in the last year
of the Medicare Part B Price Increase Period.

Step 3: ICER contacts the drug manufacturers of the top 15
drugs identified in Step 2 to inform them that their drugs will potentially be
reviewed as part of the UPI process.

Step 4: Manufacturers will be asked if they had previously
or are currently contested the relevant government dataset results for their
drug.  If so, the drug will be removed
from consideration.

Step 5: The top three drugs will be reviewed as “Additional
Drugs” as part of the 2022 UPI report

Final list:

For the 2022 report, ICER decided will not publicly the list
of 10 UPI drugs or 3 Additional therapies while the UPI review is taking place.  The reason for this is that ICER heard
concerns that being on such a list was stigmatizing even when a determination
has not yet.

What evidence can drug manufacturers provide

ICER allows manufacturers to provide the following evidence
which could potentially support price increases:

New clinical/economic evidence: New
evidence or analyses published or presented over the two-year Evidence Review
Periods that demonstrate improved clinical or economic outcomes compared with
what was previously believed New indication: Older evidence
that led to a new approved indication for the drug within the two-year Evidence
Review Periods New evidence relative to comparator:
New evidence or analyses published or presented over the two-year Evidence
Review Periods relating to comparator therapies that the manufacturer believes
indicate clinical advantages of their drug Change in cost: A large increase
in costs of production Cost offsets: Large price savings
attributable to the drug in other parts of the health care systemOther: All other reasons deemed
relevant by the manufacturers.

Key changes in methods from previous years.

Key methodological changes from previous years include

Removal of drugs from UPI list if net budget
impact increases by less than $25 million. Inclusion of the “Additional Drugs” process for
Medicare B covered drugsFor therapies being evaluated in sequential
reports, only considering evidence that became available since the prior review