ICER Addresses Misrepresentation of its Methods

Leading cost-effectiveness research experts, Peter Neumann and Josh Cohen, were invited to write a critique of ICER’s value assessment methodology which published this week in the journal PharmacoEconomics.

As an organization rooted in academic principles of rigorous, scientific debate, ICER welcomes critique, comment, and feedback on its methods. However, underpinning fair and constructive feedback is a commitment to basing any critique on facts. Neumann and Cohen have seemingly missed the opportunity to fairly criticize ICER’s framework by perpetuating two falsehoods about our value-based price benchmark that we have been publicly combating for almost two years.

First is their characterization of ICER’s potential budget impact threshold as a “budget cap.” Their article states:

“An essential flaw remains, namely ICER’s development of a budget cap (US$915 million), and its imposition of this cap on new drugs.”

In many public documents and presentations we have explained that we had never proposed that our potential budget impact threshold serve as an implied “budget cap.” To the contrary, we have stressed it should not serve that function, and no payer or policymaker has ever suggested that they have viewed it as such. As one of our presentation slides on the value framework summarized:


The second  error in Neumann and Cohen’s article is their failure to acknowledge that for more than a year ICER has made explicit in multiple documents and presentations that it no longer links the results of the budget impact analysis with the ICER value-based price benchmark.

The article states:

“…this constraint means that spending on any new drug should not exceed US$915 million per year, and, if it does, its ‘short-term affordability’ price should be adjusted downward to compensate.”

ICER’s original value framework did have the possibility of two different prices: one reflecting long-term cost-effectiveness, and one reflecting the price at which the new drug would reach the potential budget impact threshold under certain uptake assumptions. But in early 2016 ICER moved away from this approach given misunderstandings among the media and others of the meaning of the two different price points. This change in methods was communicated publicly, and included in all the documents related to the formal value framework update for 2017.

Unfortunately, Neumann and Cohen take no note of this earlier shift, and state that under the value framework update ICER price benchmarks will be adjusted to account for short-term budget impact. We have been clear that the value-based price benchmarks we produce for our reports are related solely to the long-term cost-effectiveness results and are not in any way adjusted down if the potential budget impact of a drug exceeds our budget impact threshold. As stated on page 16 of the ICER value framework update summary:

“… ICER has decided to adopt the following for its methods over the next report cycle:
1. Maintain the $100,000-$150,000 range for the ICER value-based price benchmark.”

Moreover, among ICER’s reports over the past year, a report on Dupixent for atopic dermatitis is the only one in which a drug was found to have a potential budget impact that could be expected to exceed the ICER budget impact threshold. The ICER value-based price benchmark for Dupixent was based solely on its long-term cost-effectiveness, and no price was calculated at which the drug would not have exceeded the potential budget impact threshold. Thus, for quite some time, in word and deed, ICER has explicitly de-coupled its value-based price benchmark from analyses of potential budget impact. External commentators, including the National Pharmaceutical Council, issued statements noting this change early this year.

In summary, we believe that any fair critique of our value assessment framework should reflect a good-faith effort to review the documents that explain our changes. Several documents, public presentations, and even a recent final evidence report, explicitly discuss these issues and have emphasized over and over again that our potential budget impact threshold should not be interpreted as a budget cap, nor is it tied to the value-based price benchmark. It is healthy and welcome to have honest, even contentious disagreements about ICER’s efforts and methods, but we believe it is important to highlight the distinction between differences of opinion and mis-statements of fact.