BOSTON, July 2, 2020 – The Institute for Clinical and Economic Review (ICER) today published a white paper to inform public and policy maker discussion of “Alternative Policies for Pricing Novel Vaccines and Drug Therapies for COVID-19.” To complement the white paper, ICER will host a three-part online colloquium series featuring leading health policy and industry experts from around the country who will debate the advantages and disadvantages of many different potential approaches to developing and pricing medicines during a pandemic.
“Leaders in government, business, and society all seek to adopt policies that will spur the development of treatments and preventive therapies for COVID-19 that can be delivered as rapidly as possible in an affordable and equitable manner,” said Steven D. Pearson, MD, MSc, ICER’s President. “One critical issue will be how new treatments will be priced to ensure that this goal can be met. In the exceptional circumstances of the coronavirus pandemic the early decisions made regarding pricing policy will guide further decisions in the coming months that will have enormous consequences for the United States and the rest of the world.”
WHITE PAPER: “Alternative Policies for Pricing Novel Vaccines and Drug Therapies for COVID-19”
Released today, ICER’s new white paper provides a brief overview of approaches to manage the pricing of novel vaccines and treatments in times of public health emergencies. After summarizing the experiences and lessons learned from previous epidemics and the annual flu vaccine, the paper analyzes the potential advantages and disadvantages of six alternative approaches to pricing that policymakers from around the world must now confront:
- Status quo: unrestricted pricing. Private companies develop vaccines and treatments, are rewarded with patent rights, and are allowed to decide how much to charge for the resulting products within a monopoly pricing paradigm.
- Cost-recovery pricing. Private companies develop vaccines and treatments, are rewarded with patent rights, but government and/or private insurers use an analysis of the cost of development and production to set a ceiling price.
- Value-based pricing. Private companies develop vaccines and treatments and are rewarded with patent rights, but government and/or private insurers use some form of cost-benefit analysis to set a ceiling price based on the degree of added benefit for patients and society.
- Monetary prizes. Government establishes a specific prize amount to incentivize discovery, with the first private company to discover a successful vaccine being awarded the prize. The government keeps the intellectual property and contracts separately with entities to manufacture and distribute the vaccine at cost.
- Compulsory licensing. In exchange for royalties paid to the innovator, government permits others to make, use, sell, or import patented pharmaceuticals without the patent-holder’s permission. This approach includes the possibility of exercising “march-in” rights to mandate licensing of the product directly to the federal government.
- Advanced market commitments and subscription models. Advanced market commitments (AMCs) are designed to incentivize the development of novel treatments and vaccines by subsidizing the research and development costs through a commitment by the funder or a pool of funders to a future purchase price, if the development is successful. Subscription models can work somewhat similarly, with funders and innovators agreeing on a price for a treatment in a way to provide a guaranteed minimum return on investment and a cap on total costs no matter how many patients need treatment.
COLLOQUIUM SERIES: “Pricing in a Pandemic: Options, Debate, a Path Forward”
ICER will also host a three-part colloquium series of 90-minute webinars with policy makers and experts from diverse perspectives to debate alternative pricing policy approaches for current and future treatments for COVID-19:
- Session One: Cost-Recovery Pricing (July 24, 2020, 12:00 – 1:30 PM ET). Confirmed speakers include: Afton Cissell, JD, Senior Counsel to Congressman Lloyd Doggett (D-Tex); Ronny Gal, Analyst, Sanford C. Bernstein; David Mitchell, Founder, Patients For Affordable Drugs; Aaron Kesselheim, MD, JD, MPH, Professor of Medicine, Brigham and Women’s Hospital/Harvard Medical School; and Randy Burkholder, Vice President, Policy and Research at PhRMA. Register to virtually attend Session One.
- Session Two: Cost-Effectiveness and Value-Based Pricing (July 31, 2020, 12:00 – 1:30 PM ET). Confirmed speakers include: Jon Campbell, PhD, Associate Professor, Pharmaceutical Outcomes Research, University of Colorado; Bobby Dubois, MD, PhD, Chief Science Officer and Executive Vice President, National Pharmaceutical Council; Craig Garthwaite, PhD, Associate Professor of Strategy, Kellogg School of Management, Northwestern University; Steve Miller, MD, Chief Clinical Officer, Cigna; and Eleanor Perfetto, PhD, Executive Vice President of Strategic Initiatives, National Health Council. Register to virtually attend Session Two.
- Session Three: Monetary Prizes, Compulsory Licensing, Advanced Market Commitments (August 7, 2020, 12:00 -1:30 PM ET). Confirmed speakers include: Peter Bach, MD, Director, Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center; James Love, MPA, Director, Knowledge Ecology International; Nicole Lurie, MD, MSPH, Strategic Advisor to the CEO, Coalition for Epidemic Preparedness Innovations, and Former Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services during the Obama Administration; and Carl Schmid, Executive Director, HIV + Hepatitis Policy Institute; Adrian Towse, Emeritus Director & Senior Research Fellow, OHE, and Visiting Professor, London School of Economics. Register to virtually attend Session Three.
Additional speakers for all sessions have been invited, and their names will be made public upon their confirmation. If you would like to nominate a specific expert to be considered, please submit your nomination to email@example.com.
The ICER-COVID Models
To further inform public debate around fair pricing for remdesivir (Gilead Sciences) and other future treatments of COVID-19, ICER has also developed its ICER-COVID economic models, which comprise both cost-recovery and cost-effectiveness paradigms. Intended to be updated frequently as new data emerge, the ICER-COVID models were first published on May 1 and most recently updated on June 24.
The Institute for Clinical and Economic Review (ICER) is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. ICER’s reports include evidence-based calculations of prices for new drugs that accurately reflect the degree of improvement expected in long-term patient outcomes, while also highlighting price levels that might contribute to unaffordable short-term cost growth for the overall health care system.
ICER’s reports incorporate extensive input from all stakeholders and are the subject of public hearings through three core programs: the California Technology Assessment Forum (CTAF), the Midwest Comparative Effectiveness Public Advisory Council (Midwest CEPAC), and the New England Comparative Effectiveness Public Advisory Council (New England CEPAC). These independent panels review ICER’s reports at public meetings to deliberate on the evidence and develop recommendations for how patients, clinicians, insurers, and policymakers can improve the quality and value of health care. For more information about ICER, please visit ICER’s website.