Institute for Clinical & Economic Review Issues Report Entitled 'Unsupported Price Increase'

WASHINGTON, May 3 -- The Institute for Clinical and Economic Review issued a 132-page report on Jan. 12, 2021, entitled "Unsupported Price Increase".

The report was co-authored by Steven D. Pearson, president; David M. Rind, chief medical officer; Foluso Agboola, director for evidence synthesis; Avery McKenna, research assistant; Richard Chapman, director of health economics; and Eric Borrelli, evidence synthesis intern.

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Table of Contents

Executive Summary...ES1

1. Introduction ... 1

2. Selection of Drugs to Review ... 3

3. Assessments... 8

3.1 Enbrel (Etanercept, Amgen)... 8

3.2 Invega Sustenna/Trinza (Paliperidone Palmitate, Janssen)...11

3.3 Xifaxan (Rifaximin, Bausch Health) ...13

3.4 Orencia (Abatacept, Bristol Myers Squibb)...14

3.5 Tecfidera (Dimethyl Fumarate, Biogen)...17

3.6 Humira (Adalimumab, AbbVie)...19

3.7 Entresto (Sacubitril/Valsartan, Novartis)...21

3.8 Vimpat (Lacosamide, UCB)...23

3.9 Entyvio (Vedolizumab, Takeda) ... 25

3.10 Xtandi (Enzalutamide, Astellas Pharma)...27

4. Insulin...31

References ...34

Appendix A. Enbrel...38

Appendix B. Invega Sustenna/Trinza ...40

Appendix C. Xifaxan ...42

Appendix D. Orencia ...44

Appendix E. Tecfidera ...51

Appendix F. Humira...55

Appendix G. Entresto...60

Appendix H. Vimpat...62

Appendix I. Entyvio ...64

Appendix J. Xtandi...65

Appendix K. ICER Responses to Manufacturer Comments...66

Appendix L. Manufacturer Comments... 76

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Executive Summary

The price of many existing drugs, both brand and generic, can increase substantially over time, and questions are frequently raised regarding whether these price increases are justified. State policymakers have been particularly active in seeking measures to address this issue./1,/2,/3

Despite these initiatives, there had been no systematic approach at a state or national level to determine whether certain price increases are justified by new clinical evidence or other factors. In 2017, the Institute for Clinical and Economic Review (ICER) sought and received funding from Arnold Ventures to develop ICER Unsupported Price Increase (UPI) Reports to determine whether new clinical evidence or other information has appeared that could support the price increases of those drugs with recent, substantial price increases that have had the largest impact on national drug spending. This is the second of these reports.

Following the methods from our prior report, we first obtained a list of the 100 drugs with the largest sales revenue in the previous calendar year (2019) in the United States (US); this information came from SSR Health, LLC, the health care division of SSR, LLC, an independent investment research firm. We then excluded from this list 67 drugs whose increase in wholesale acquisition cost (WAC) was not larger than twice the increase in the medical consumer price index (CPI). A detailed description of the entire UPI Protocol is available separately.

For each of the remaining 33 drugs, we estimated, where possible, the increase in spending in the US during 2018-2019 that was due to increases in net price as opposed to increases in volume. The intent was to select the top 10 drugs for further assessment; manufacturers of the identified top 10 drugs were asked for early input as to whether our figures on change in net price, sales volume, and overall net revenue were correct. After the cutoff date for informing ICER of corrections to net price had passed, the manufacturer of secukinumab (Cosentyx(R), Novartis) provided information showing that it did not have an increase in net price. The 2020 UPI Protocol did not anticipate this situation, but based on the 2019 UPI Protocol, secukinumab was removed from the review. Also after the cutoff date, the manufacturer of enzalutamide (Xtandi(R), Astellas) provided information showing that this drug would likely have been in position 11 on the list. Based on the 2019 UPI Protocol, enzalutamide was kept in the review. In addition, we received public input recommending we evaluate price increases for etanercept (Enbrel(R), Amgen). Following our protocol, which allows for inclusion of up to three drugs that do not make the initial list, we added etanercept to the remaining nine drugs, creating the final list of 10 drugs for assessment. Once included, etanercept's increase in budget impact at the national level placed it in the top position on the list.

Assessments were then performed on these 10 drugs to determine whether there was new clinical evidence in the prior two years (2018 through 2019) that demonstrated "moderate/high quality new evidence of a substantial improvement in net health benefit compared with what was previously believed." Drugs judged to have evidence that meets this standard are reported as having price increases "with new clinical evidence." To arrive at this judgment, ICER accepted and reviewed submissions from manufacturers and/or performed an independent systematic review of publicly available results from randomized controlled trials (RCTs). For drugs with multiple indications, evidence was sought for indications responsible for at least 10% of a drug's utilization. ICER reviewed the quality of the new evidence using the widely-accepted evidence grading system called GRADE./4

For evidence that was felt to be high or moderate quality, ICER then assessed the magnitude of the additional net clinical benefit compared with what was previously believed.

Table ES1 on the following page shows the results of the evidence assessments for these 10 drugs. Seven were judged to have price increases unsupported by new clinical evidence and three were found to have price increases with new clinical evidence. The total increase in spending in the US over one year due to price increases for the seven drugs found to have unsupported price increases amounted to $1.2 billion. Etanercept was determined to be one of the drugs whose price increase was unsupported by new clinical evidence, and its cumulative price increases were estimated to have had the single largest impact on national drug spending among all drugs evaluated in this report. Our judgment for etanercept of whether there was new evidence of "substantial" improved comparative clinical effectiveness was challenging given varying interpretations among clinical experts in the US and internationally of the relevance of the findings of one new randomized trial. Further details are provided later in the report.

ICER does not currently have the capacity to perform full economic analyses in conjunction with the evaluation of clinical evidence for the drugs in its UPI Reports. Therefore, even though three drugs did have new clinical evidence, this UPI Report does not attempt to determine whether the price increases were fully justified by meeting a health-benefit price benchmark that might be determined by a formal cost-effectiveness analysis. Instead, our assessment focused on whether new evidence existed that could justify a price increase. By identifying whether there is, or is not, new evidence of improved safety or effectiveness for drugs with substantial price increases, we hope we have taken an important first step in providing the public and policymakers with information they can use to advance the public debate on drug price increases.

ICER received public comments from state policymakers suggesting that insulin be evaluated in the current UPI Report, and we include a section on these drugs. Of note, however, the UPI methodology is not well suited for medications like insulin that have not experienced recent major increases in net prices. In addition, with multiple insulin analogues on the market, the budget impact at the national level due to price increases for any single drug would be relatively small compared to drugs in other treatment areas.

We found that in 2019, seven of the top 10 insulin products had sales of over $500 million, and all 10 had sales of over $200 million. From 2018 to 2019, the list price (WAC) increased for five of these products, four had level pricing, and one had a decline in list price. Among the five products with increases in WAC, four experienced increases at more than medical CPI for the same period. However, net price appears to have declined for nine of these products. Thus, the actual price paid by the health system for these products was generally lower in 2019 than in 2018.

While higher net prices are the most potent force in driving up insurance premiums, and are thus important to plan sponsors, payers, and all members of a health system, list prices have important implications for patients. For uninsured patients who may experience the full cost of list pricing, insulin may be unaffordable. And high list prices can lead many insured patients to experience financial toxicity as well because health benefits often require payment of deductibles or coinsurance linked to the list price instead of the net price.

Thus, overall, it appears that net prices for insulin generally declined between 2018 and 2019, while WAC largely stayed level or increased. The size of the WAC increases, when they occurred, were mostly substantially greater than medical inflation overall and creates risk for greater financial toxicity for patients despite lower prices for payers.

Link to table below.

Link to figure below.

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References:

1/ Horvath J. Update: What's New in State Drug Pricing Legislation? https://nashp.org/updatewhats-new-in-state-drug-pricing-legislation/. Published 2018. Accessed 10/04/19, 2019.

2/ An act relating to prescription drugs [press release]. 2016.

3/ Health care: prescription drug costs. In: Hernandez, ed. Health and Safety Code, Insurance Code. Vol 2017-2018.

4/ Guyatt GH, Oxman AD, Vist GE, et al. GRADE: an emerging consensus on rating quality of evidence and strength of recommendations. BMJ (Clinical research ed). 2008;336(7650):924926.

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The full report, including tables and figures, can be viewed at: https://34eyj51jerf417itp82ufdoe-wpengine.netdna-ssl.com/wp-content/uploads/2020/11/ICER_UPI_2020_Report_011221.pdf

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