It’s time to push back on drug price legislation

Major League Baseball set a record this year for home runs in a season.

Not to be outdone, Democratic presidential candidates are shooting for a record of their own – dumbest healthcare “fixes” in a single campaign. Senators Warren and Sanders have eclipsed even Nancy Pelosi, who is sticking with long-discredited idea of letting Medicare negotiate prices with manufacturers. That’s far too tame for Elizabeth and Bernie, who want to replace the entire healthcare structure with Medicare for All. Not to mention cancelling everyone’s medical debt and abandoning private insurance.

In the past, we’ve been able to sidestep or deflect election-year drug price brainstorms, but 2020 might be different. Given a plethora of crazy ideas, it’s not inconceivable that Congress may adopt a “moderate” approach and modify the ACA to allow Medicare price negotiations.

So, here’s an idea. Instead of doggedly defending our right to price our brands, what if we take an end run around our critics and adopt some of their tools? One of our industry’s most vocal critics is an organization known as the Institute for Clinical and Economic Review, or ICER, for short. ICER is an independently funded group created in 2015 with the objective of evaluating the cost-effectiveness of prescription drugs.

Not surprisingly, they’re often at odds with Pharma manufacturers. Of the 79 drugs ICER has reviewed, less than a third were judged to be fairly priced. In the past, our trade organization, PhRMA, has taken them to task, calling them “biased” and “simplistic.” But is an attack the best approach?

Let’s consider the drugs ICER has reviewed favorably. Surprisingly, ICER stood up for the price of Sovaldi for hepatitis C, even as most critics were lambasting it as “the $1000 pill.” ICER read the data, did the math, and concluded that a cure for hepatic C easily out-weighed Sovaldi’s treatment costs. Payers fell in line, and as a result, thousands of patients were able to put hepatitis C behind them. In another, even more remarkable example, ICER agreed, after some initial balking, that the $2.125 million price for a single injection (!) of Zolgensma was justified by its efficacy in treating spinal muscular atrophy. No complaints about a “million dollar shot.”

The opportunity to gain support from a respected third party was not missed by decision makers at Sanofi and Rogeneron, who had been wondering how to price their new eczema drug, Dupixent. As detailed by Eric Sagnowsky (Fierce Pharma, September 10, 2019), these companies approached ICER well before the Dupixent launch. After sharking the drug’s clinical profile, they debated pricing options. According to Sagnowsky, the final agreed-upon price of $37,000 per year after rebates was less than what the companies were hoping for, but the rapid acceptance of Dupixent following launch quickly led to its current blockbuster status.

ICER probably saw the Sanofi/Rogeneron overture as a mixed blessing. On one hand, ICER could boast of fulfilling its mission of encouraging cost-effective drug prices. On the other hand, ICER would inevitably be seen as endorsing Dupixent’s cost. It’s not hard to see that if Medicare officials are allowed to negotiate prices, they will have scant leverage following a favorable review by an independent and trusted organization such as ICER.

Is proactively seeking upstream price validation a complete solution to the threat of government usurpation of our business model? Not necessarily. If you’ve been burned in the past by an ICER review, you’re thinking I’m nuts. But if you’ve got good data and a compelling story, why not give it a try?