Promising new Alzheimer’s treatments are poised to turn the tide for patients in 2023. One of them, which slowed cognitive decline in early-stage patients by 27% over 18 months, could be approved as soon as January. This sets up a battle in Washington over pricing and payment, as senior demand for the new treatments will have big implications for Medicare.
One organization, the Institute for Clinical & Economic Review (ICER), has outsized influence in these dynamics. Writing in RealClearHealth, Wayne Winegarden, senior fellow in Business & Economics at the Pacific Research Institute and director of its Center for Medical Economics and Innovation, explains why ICER’s propensity for undervaluing medicines spells trouble for Alzheimer’s patients.
Three days before Christmas, ICER is scheduled to publish a draft assessment of two promising treatments for Alzheimer’s disease. Unfortunately for the millions of Americans living with this fatal illness, it is likely that ICER will be giving lumps of coal, not gifts, this holiday season…Since 2017, ICER has declared three out of every four drugs overpriced based on data from the ICER Analytics platform.
A Joint Economic Committee of Congress report documented that the annual economic costs for Alzheimer’s is nearly $600 billion once the value of the unpaid care for the people living with the disease are considered.
Citing these and other factors, a recent study co-authored by ICER President Steve Pearson acknowledged that when both healthcare and non-healthcare factors (such as caregiver quality-of-life, non-healthcare costs and productivity loss) were considered, the cost-effectiveness of disease-modifying treatments for Alzheimer’s disease were substantially improved.
But ICER rarely accurately acknowledges burdens such as the unpaid care provided by caregivers or patients’ reduced ability to earn a living when valuing medicines. Without a full consideration of all the costs, ICER’s recommended prices will undervalue the benefits from potential therapies.
Organizations like ICER always present drug prices in a vacuum. Simply cut the price, they recommend, and voila – patients pay less and we all benefit. But that is simply never true. Innovative medicines are the product of billions of dollars of R&D investment over many years. Most drug candidates fail, and the industry funnels profits from the few that reach market to finance the search for new drugs.
Undervaluing medicines and imposing government price controls impacts future research. That’s not something to take lightly when it comes to Alzheimer’s, as the new treatments in question are not a cure, but a steppingstone to better therapies in the future. As Winegarden explains:
Innovation is a long, risky, and expensive process that builds on itself over time – which is what we have seen with cancer medicines. This will not happen if innovators expect that they will be unable to cover the massive costs of capital necessary to advance research.
Patients do not need to speculate on the adverse consequences that result when price controls undervalue the benefits from novel therapies. Many other countries have been implementing the ICER playbook for years with adverse outcomes for patients’ healthcare quality. For example, after Germany implemented a version of the value assessments ICER conducts in 2011, only 63% of new medicines launched over the next seven years were accessible to German patients, compared with 88% in the U.S.
If we follow Germany’s lead, our health plans are headed in the same direction. A recent Xcenda survey indicates that nearly 60% of U.S. health plans who use ICER reports end up restricting rather than expanding access to treatment.
The evidence is clear: we must not let ICER’s biased and incomplete reports discriminate against Alzheimer’s patients. Market forces are a tried and tested method of encouraging new breakthroughs, such as the forthcoming new Alzheimer’s treatments, while also expanding access to more people. Consequently, policies should focus on improving the market process by improving price transparency and reforming the health insurance markets.
You can read the full article here.